Smarter Ways to Use the Internet of Things

The Internet of Things (IoT) is transforming the way businesses operate, differentiate themselves, and increase profits. With enhanced situational awareness—the ability to perceive and respond to the surrounding environment—IoT adds valuable intelligence for complex decision making in a broad range of industries, including energy, automotive, healthcare, and more.

With billions of units generating more than $1 trillion in revenue today, the IoT market is already big—and it’s growing fast. Predictions include a double-digit compound annual growth rate (CAGR), and IDC forecasts that revenues will double by 2015. The challenge is to translate the intelligence in connected embedded devices into new products and services that solve customer problems, drive customer engagement and loyalty, and deliver even higher value to the economy.

Macroeconomic trends, as well as trends that impact specific industries or groups of adopters, drive IoT momentum. Key factors include the following:

  • High labor costs: It typically costs at least three times more for a human to perform a task than a machine. Intelligent systems can now perform many tasks that require intelligence and situational awareness.
  • Huge real-time demand for Big Data: Data has become the new currency of business, and intelligent systems can supply both the raw material and sophisticated, real-time analytics that shape and guide more intelligent business decisions.
  • Cloud: Through IoT, businesses can develop new services and offer them through software-as-a-service (SaaS) models, creating new efficiencies and economies.
  • Ecological considerations: Machines can perform power management tasks with finer precision and faster response times than manual, human-dependent systems.
  • “Instant gratification” culture: Customers want everything now—whether it’s just-in-time servicing, real-time order fulfillment, or immediate answers to complex questions.

Companies with a stake in IoT have to address a series of questions. What is the best way to allow the wealth of new applications, systems, and devices to connect to complex, often fragile networks? How can Big Data inform and guide the design of systems and devices for better connectivity? How can data be exchanged among siloed vertical markets, systems, and applications? How can the operational efficiencies of IoT-enabled systems be scaled to create higher profit potential? And how can successes be leveraged more broadly across multiple vertical markets?

Operators and device manufacturers have very different perspectives on the opportunities, but all are looking to develop solutions that will scale efficiently, increase revenue, and create competitive differentiation, while responding to the needs of specific vertical industries. And both are trying to respond to the same challenges.

In dealing with these challenges, operators and device manufacturers sometimes take a do-it-yourself (DIY) approach, building internal competence rather than outsourcing key aspects of new device and service creation for the IoT market. All too often, that investment strategy doesn’t match their value equation. Customers perceive the highest value in the application and the device-specific middleware. In many cases research and development (R&D) investments are being made lower down in their run-time or embedded stack, where customers perceive little to no value.

The net result, in many cases, is an excessive investment in R&D that detracts from the creation of the differentiating applications and services valued by customers, along with delays due to complexity and lack of experience. Businesses end up driving operating expenditures (OPEX) higher, missing market windows, and failing to exploit opportunities.

For most operators and device manufacturers, it makes sense to invest at the application level and let a qualified partner focus on the non-differentiating, foundational “application-ready” technology rather than technical competence with little competitive advantage. The move to a service-centric model is an evolutionary process. Many operators have already taken the first step by offering connectivity services for IoT applications.

As a global leader in embedded solutions, Wind River® is working with industry partners and customers to address challenges, eliminate barriers, and bring IoT concepts to life. With deep experience in a broad range of sectors and mission critical applications, we understand end-user requirements and help design intelligent components from the ground up to be reliable, manageable, and secure. We are perfectly positioned to help companies in any industry leverage IoT to improve performance, launch new services, and generate new revenue streams.

Contact Information

Wind River World Headquarters

500 Wind River Way
Alameda, CA, 94501

tele: 510.748.4100
toll-free: 800.545.9463
fax: 510.749.2010

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