The Positive effect of Covid on IoT

Since the beginning of  the current pandemic we have seen industry growth  slow down as the full ramifications of the COVID-19 effect. However, as the old racing driver saying goes “you accelerate in the corners not on the straights” and this was certainly true regarding IoT in 2020, as it becomes clear that many of these trends have accelerated due to the pandemic.

The reason to me appears twofold. Firstly, a general business slowdown puts pressure on Enterprises to reduce costs and increase delivered value. IoT helps with both of those things, and so the pressure for adoption is growing. Fortunately this unprecedented and sudden need for new technological approaches has coincided with IoT reaching a level of cost and maturity that allows for mainstream adoption.

Secondly, smaller more nimble companies, such as well-funded IoT start-ups, have always viewed a business downturn as the best time to accelerate their disruptive models. In fact, most of the new tech leaders were founded in downturns. This is helping to drive IoT innovation and forcing the hand of established players who are now playing catch up. 

Real-Time visibility of chains becomes possible

As the cost of IoT falls, supply chains stand to be one of the big beneficiaries in the coming years. Transportation containers use sensors to check transit conditions, but most only update the central system when a container passes a specific point for example a depot. It may be that it meets specific environmental conditions at that point, but at some point since the last check it has become too warm and the content no longer viable. This has been a particular challenge with the advent of vaccines requiring specific storage and handling. For all the sophistication of the analytics, there are still big blind spots in the data flow.

As a result, supply chains are leaky. The Boston Consulting Group estimates that by 2030 2.1  billion tons of food, worth about $1.5 trillion will be lost or go to waste every year. Around half is lost, damaged, stolen or goes off in transit or storage, and much of the rest is due to overproduction. More granular monitoring could provide real-time insight and dramatically reduce both problems. For example, continuous temperature monitoring would quickly show exact points where problems were occurring.

Advances in technology mean we can now print IoT circuits, batteries, and cellular connectivity onto flexible labels, and stick it on a box. This continuous connectivity would allow complete real-time visibility, helping manage production, transport, and storage much more effectively.

To get to this point, the price of creating a simple connected label needs to come down to a few dollars, and we are getting close. Pharma company Bayer recently announced a printable NB-IoT-based tracking label, which costs a couple of euros, and will attach to anything that leaves its warehouses. 

By 2022 you can expect a series of large-scale initiatives of cellular-enabled smart labels. There are barriers. A tracking label that could move through multiple countries, anywhere in the world, will need global coverage and the ability to seamlessly switch between lots of networks: a challenge that has historically hindered global IoT deployments. But this is an area where innovative and disruptive solutions are quickly changing the game.

As reliable connectivity becomes cheap and easy, it can be easily deployed to manage the billions of goods that move around the world every day. This is where we move towards the so-called massive IoT, where we’re not talking about 50bn connected devices, but 500bn

COVID-19 accelerates the digital transformation of the city-centre

Nowhere more than the high street has the COVID-19 aftermath reshaped how we work and shop. Most forecasts predict more home working, and a move away from city centres. Demand will fall for items such as coffee and sandwiches and the big chains catering to these high turnover markets will see a drop in custom. 

High priced city-centre office space may become hard to justify on its current scale. This will accelerate a trend already underway – a shift away from the physical store. Coffee companies can provide the same quality coffee via a machine. But instead of vast rental and staff costs, they sit in one square meter of someone else’s shop, office, or transport hub.

For the price of a retail unit, a coffee vendor could put a machine in every office block within a ten-minute walk, bringing much greater convenience to the user. It is also easier to scale up and down allowing more experimentation. Setting up a store is a big investment involving leases, employment contracts, machinery. Wheeling in a machine and plugging it into an electrical socket is not.

Added to this, connected machines bring new benefits to users. Customers can use apps to order pre-customised drinks, exactly to their liking. The SodaStream app from Pepsico  allows users to choose flavours, carbonation levels and temperatures to create the perfect drink, then pick it up at their connected vending machine. Such detail can be hard to convey as you grab your morning drink on the way to work, but if set up in an app, it allows you to collect exactly what you want. This trend towards mass customisation and mass availability will increase as technology grows more sophisticated.

This move makes economic sense for vendors and provides added convenience to users. Whilst major chains are not going to disappear overnight, there will undoubtably be a noticeable shift in balance away from physical stores and towards connected services in other spaces.

Enterprise adoption of IoT advances

During 2020, IoT in large Enterprises has progressed significantly. The pandemic –and the socially distanced, remote working world it created – accelerated many IoT initiatives that may otherwise have taken another five years. Look at the number of social distancing/contact tracing solutions hitting the market such as the Orbi-Trace hitting the market that just 12 months ago wouldn’t even have been considered. It has created a momentum that you can expect to see accelerate in 2021 and play an important part in the post-COVID recovery.

We see this in all industries, though at varying stages of maturity. Retail is using analytics to understand in-store behavior and manage supply chains, while healthcare is expanding remote care to avoid unnecessary person to person contact. Agriculture is automating laborious processes such as harvesting, manufacturing, chemicals, and research and development facilities are adding thousands of IoT sensors to their operations technology to deliver transformational insights into energy use, production cost, scheduling, and process efficiency.

There’s been big investment in IoT infrastructure and an increase in understanding “of how to do it well at an Enterprise scale - crossing from the experimental phase to mass adoption - and seeing returns as a result. We have seen this trend across all these industries, and expect to see a continuation in 2021 – and probably an acceleration. Successful niche companies in the industry such Guardhat have been able to increase funding based on this start of mass adoption.

This is allowing companies to capture meaningful data, and integrate it into their workflow management systems”

Summary

The COVID-19 pandemic has accelerated IoT trends that were already underway. Both consumer and business customers are moving away from products and towards connected, data-driven digital services and experiences. Delivering these means adding connectivity to devices. 

In 2020 we have seen a noticeable shift in who is doing this, from the innovative early adopters to the mainstream. Large Enterprises have crossed from experimentation, to trying to understand how to deploy IoT across their operations, or integrate them into global product lines, in a way that delivers real value and more importantly, at scale.

Perhaps most significantly, this is going global. The increasing convenience with which IoT solutions can be deployed – thanks to easier network switching solutions that allow a single global connectivity solution – allow big companies to produce a single connected product on a single production line and ship it anywhere in the world. 

In 2021, expect a continuation of this trend, as the global economy recovers, leading to more connected devices and more connected Enterprises. As costs come down and new innovations arise, such as printable IoT, we expect this to spread to new applications such as global supply chains. Thanks partly to the pandemic forcing people to consider new business models, and partly due to improved connectivity options, 2020 was the year many companies worked out how to get IoT right. The use cases are now clear. In 2021 we expect many more companies to follow in their footsteps, and many more new global IoT products and services to appear.  Expect however vendors that don’t understand how to scale up a business properly, or are going for a high risk Blitzscaling approach to fall by the wayside as other vendors start to grow and overtake them.