IoT: Applications, Investment, and challenges for Startups

“We expect the technology to disappear”. IoT is one such example, that auto-organizes, shares information, data, and resources, react and act in face of situations, changes in the environment seamlessly and weaves itself into the fabric of everyday life until it is indistinguishable. Have you observed, that many of the objects that surround us are on the network in some form or another, without us even realizing it?

IoT has stepped out of its infancy and is way beyond traditional mobile computing scenarios that utilize smartphones, and portables and evolve into connecting everyday existing objects and embedding intelligence into our environment. It uses existing Internet standards to provide services for information transfer, analytics, applications, & communications. The technology has transformed the static internet into a fully integrated internet system and is playing a pivotal role in what they call "an intelligent digital mesh"

IoT Ecosystem

The IoT Startup Landscape

As per IoT Startup Report and Database 2021, more than 1,200 companies make up the landscape of upcoming, innovative companies competing for market share in the connected IoT world of the future and many of them has reached the status of a scale-up, laying the foundation for a potential IPO in the coming years.

Growth Drivers of IoT

• New Business Models
• Low Technology & Network Connectivity Costs
• Penetration of Mobiles
• Big Data
• Cloud Computing
• Regulation & Legislation

IoT Applications

IoT enables machine to machine, human to machine, and human to human interactions in a highly reliable and robust way. The technology is built to monitor the environment, discover the problems, communicate, and potentially resolve problems without the need for human intervention. IoT applications in business range into three categories:

1.????Monitoring & Control

The most common IoT application is collecting data on performance and usage. The monitoring and control technologies like smart grid and metering are known to reveal the operational patterns, identify areas of potential improvement, predict future outcomes and optimize the operations using IoT. For example, a leading manufacturer/repairer of casting molds utilizes IoT sensors that work effortlessly at high temperatures, dust, magnetic forces, and other high-risk conditions to monitor & control the temperature inside the furnace accurately and reduce wastage.

2.????Data Analytics

IoT devices embedded with sensors and actuators generate a huge amount of data that can be utilized to make insightful decisions in business. Be it changes in customer behavior or identifying opportunities to provide value-added services to the customers, IoT devices are a resource to drive growth in the business. For example, wearable health monitoring sensors can report changes in the patient's normal patterns, trigger interventions, and prevent adverse events from escalating. Similarly, in retail, it can help track changes in customer behaviors and market conditions to increase customer satisfaction.

3.????Information Sharing & Collaboration

As specified earlier, information sharing and collaboration can occur between people, between people and machines, and between machines in IoT. Sensing a predefined event can help businesses save millions of dollars. IoT with the help of sensors, beacons, BLE, and actuators can enhance situational awareness, facilitate information exchange in real-time, and avoid delay and distortion. The most celebrated example of this particular IoT application is beacon technology which provides app users with personalized department-level deals, discounts, recommendations, and rewards as shoppers move in-store.

IoT Investment Opportunities

IoT penetration in retail, healthcare, manufacturing, insurance, home appliances, airlines, heavy equipment, and logistics is well tapped and many startups are taking advantage of the wave of IoT innovations in the coming time. Based on the maturity level of IoT technologies, startups are slowly increasing their investments. With so much potential from IoT, startups are required to carefully measure the risks and rewards from their IoT investments. The most common measure the companies use to value the IoT project is NPV; however, it ignores the flexibility and undervalues the project’s worth, which is why the real options valuation method seems to be most appropriate that values IoT project without overlooking the critical qualitative factors. Here’s what a McKinsey survey reveals:

Source: McKinsey & Co.

IoT Deployment Challenges

IoT is a disruptive innovation and its increased push for adoption presents multiple challenges for startups. Given below are the areas where the startups face challenges:

1.????Data Management

The massive amount of data generated by IoT sensors and devices is difficult to process and store. Startups need to design a robust data center architecture to deal with heterogeneous data. Alternatively, startups can invest in data storage and ensure the data center is more distributed to meet the high processing and response time needs.

2.????Data Mining

The streaming data that invokes strategic moves of the company and impacts its short-term and long-term business activities need to be tamed & understood accurately. A shortage of skilled data analysts and advanced data mining tools can lead to poor business decisions. Startups can partner with competent & seasoned data analytics companies to get the most out of their data without having to shift their focus on the core business.

3.????Security & Privacy

The data derived from IoT sensors and devices can spark significant privacy & security concerns and is often counter-productive to service providers. To increase the acceptance and confidence of users, it is of utmost essential to address the privacy and security concerns of IoT. These challenges can be resolved by relying on developers that can incorporate robust & end-to-end security solutions into products.

4.????Complex Communication

Fragmented standards, poorly developed & tested devices, lack of skilled workforce, etc can turn lives into chaos. In an unconnected system, errors do not bring the system down; however, in an IoT system, incorrect data can cause significant losses. Startups need to make every effort to reduce the inconsistencies in the system and guarantee safety and privacy to users.

Regardless of the size, any business can harness the power of IoT and deliver unparalleled experiences to its stakeholders. Startups primarily focus on providing a solution to a problem, IoT can significantly help them achieve this goal by delivering high-quality solutions, reducing costs, facilitating better decision making, improving customer satisfaction, and creating an ecosystem that is smart, agile, and efficient to meet changing business demands.

To look at the bigger picture and uncover the infinite possibilities enabled by IoT, it is crucial to partner with a leading IoT development company like Fusion Informatics. Our experts are seasoned to understand the specific business challenges and navigate them using cutting-edge technologies.