Consumer, industrial and commercial IoT? What each means for business
All right, you’re looking at the headline and asking yourself, “What is the difference between consumer, industrial and commercial IoT?” Good question. Here’s the broad answer: Commercial IoT (resisting the temptation to acronymize it into “CIoT”) is a term being applied only to those aspects of the Internet of Things that pertain specifically to enacting business. It’s this aspect of the IoT that is most meaningful for organizations, and it’s important to recognize that the three terms do not all describe this same business impact.
For instance, many devices and applications labeled “consumer IoT” make money for a vendor as a hardware sale, with no ongoing revenue stream, and have no relationship to business enablement or operations. Similarly, there are numerous sensors, micro-controllers, actuator devices and systems implemented throughout factories or on board large mobile machinery and inventory control lines that are being lumped together (frankly, often as opportunistic relabeling) as “industrial IoT” by their manufacturers. These may have some connection to a private IP-based network or the public Internet, but are still functioning as closed environments, not as true business enablers.
How to distinguish commercial IoT
A good methodology can be found in the physical goods world. You can go to a big box store, purchase cases of food and beverages, and pay at the checkout line. But if you’re continually procuring stock for a restaurant, these items are intrinsic components of your business, and most critically, to what you’re delivering to customers. You therefore care fundamentally about availability, product consistency, quantity pricing, payment terms and many other elements that are wholly different to what a consumer tends to look for.
This analogy is pretty apt when applied as a filter to IoT elements, systems and services — your purchase of a fitness tracker, or items used by a company that don’t impact the product or service being vended. By applying this filter, you’ll find that the majority of consumer-focused IoT elements don’t fit within commercial IoT, whereas a majority of industrial IoT elements do.
Why does this distinction matter?
Many, many corporations and governmental entities are looking closely at the IoT, some buying things, some “redesigning for the coming wave” and other initiatives. Applying a “commercial” filter immediately tells you whether you’re doing something with IoT that can directly impact your business, or because it’s the hot trend (tough love but there you go).
If you can look past the hype and directly at the effect an investment in IoT technology will make on your organization, your customers and other key issues (depending upon your industry) such as improved quality, supply chain management or more efficient regulatory compliance, the commercial filter is pretty useful. As the CEO of a new company operating exclusively in the IoT area, I have to run that filter constantly — and there are many items that get bounced as a result.
One example is with automotive telematics. Broadly, telematics refers to the transmission of information pertaining to device or system operations via wireless links to remote recipients. In the automotive world, the term is often applied to use cases such as knowing what music or climate control settings the driver chooses. Nifty and techie-cool, and doubtless providing useful data to marketers, but not affecting the safety, operational efficiency or maintenance of the vehicle.
Now take fleets of cars or trucks used in service businesses. Having data about engine functions, braking, navigation, outside air temperature and other functional elements all beamed to fleet headquarters, or to third party service providers, can be very useful and lead to bottom line improvements. Bonus — you might also know what satellite radio stations your drivers are listening to…
Commercial IoT: the new mother lode?
Just about every major, paradigm-shifting advancement brought about by technology has been led by governments providing funding or businesses buying; sometimes both. Our perception of this has been skewed a lot in recent decades by the advent of devices and online systems that were introduced first as consumer offerings — obvious examples being smartphones and social media.
These in no small way, through their pervasiveness and resulting impact on miniaturization, availability and cost of data communications plus incremental raising of the bar on user experiences, have laid the groundwork for a potentially enormous next wave in the IoT. However when looked at through the lens of likelihood for near term business opportunities, it’s the commercial applications of IoT that are taking off first (check out the huge investment by IBM in this). Consumer devices are popping up everywhere, maybe even on your wrist or nightstand.
But the first big veins of gold are being opened in the commercial space. If you’re thinking of slipping out of that job in a large corporation and doing a startup, or want to make your mark inside of the big company by implementing something powerful and lasting, Go Commercial.