Cos See IoT As A Key Product Innovation Tool

by CXOtoday News Desk    Jun 01, 2015

digital india

The Internet of Things (IoT) is seen as a key tool for driving product innovation, which continues to be a high business priority among manufacturing enterprises, according to market research firm IDC.

“As innovators actively seek new product functionalities and business models in today’s competitive world, IoT is emerging as one of the key tools in this journey. IoT extends the sphere of innovation beyond designing better performing or cost effective products to ‘connected assets’ that enable new value propositions throughout the useful life of a product from its manufacturing to shipment to the customer’s location to its intended performance in the field,” IDC said.

IoT is the most adopted among what IDC calls the “Innovation Accelerators” in India followed by Security, the other technologies being robotics, 3D Printing, natural interfaces and cognitive systems. It is also a technology expected to see significant growth in the next 2 years, with major companies already tapping into this opportunity.

For example, Cisco has announced an engagement with Electronics City Industries Association (ELCIA) to develop Asia’s first end-to-end IoT Innovation Hub in Bangalore. The company believes India’s fast growing Internet penetration will drive this collaboration and help Electronic System Design & Manufacturing (ESDM) companies and others of electronic city engaged in IoT product development.

According to a Task Force report commissioned by the Department of Electronics and Information Technology (DeitY), the demand for electronics hardware in the country is projected to increase to $400 billion by 2020 and this initiative will help address domestic demand, allowing local manufacturers to capture this growing market opportunity and save precious foreign exchange for India.

“With the advent of digital enterprises, there has been a constant and continuous emergence of powerful business and technology forces. These forces such as big data analytics, cloud computing, mobility, cross enterprise processes and digital consumers, are all driving huge market opportunities. The requirement of innovation driven technology and a cost effective ecosystem for enterprises to survive is the need of the hour,” says Ganesh Ayyar, CEO, Mphasis. The mid-sized IT firm Mphasis has launched ‘Mphasis Next Labs,’ a strategic initiative to research and innovate on emergent and future paradigms. .

According to IDC’s forecast, revenue from IoT technology and services for discrete and process manufacturing in India will grow from $1.3 billion in 2014 to $3.9 billion in 2020 at a CAGR of 20.1 percent.

“IoT is becoming a vital technology in this spectrum of innovation and has seen a fast pace of adoption from multiple manufacturing organisations and service providers in India compared to other 3rd Platform technologies.

Companies that make IoT collaborative in nature cutting across departments and embedded as part of the product strategy and not just an individual technology implemented on its own will realize the value it offers better and faster,” said S Ramachandran, Principal Research Manager, IDC Manufacturing Insights.

Gartner has also has a very optimistic outlook on IoT innovation. The research firm had said in a report last year that it is not large enterprises, but startup and niche companies will drive growth in the IoT space through the creation of innovative applications. It predicted that by 2017, 50 percent of IoT solutions will originate from start-ups that are less than three years old. 

Pete Basiliere, research vice president at Gartner, said individuals and small companies are taking advantage of low-cost electronics, traditional manufacturing and 3D printing tools, open and closed-source hardware and software to create IoT devices that improve processes and lives.

“Product development processes within most large enterprises are too ponderous and ROI-driven to produce anything but high-volume, lowest-common-denominator IoT objects,” he said.

However, he pointed start-ups worldwide are charging ahead with identifying numerous, often niche problems and innovating solutions using IoT concepts. They will drive not only consumer and enterprise acceptance of the IoT, but also the creative solutions that enterprises could not possibly discern, resulting in an “Internet of Very Different Things.”