The adoption of the Internet of Things (IoT) in South Africa is expected to follow the same path as that of cloud computing, with the big time arriving in 2019, writes Pieter Engelbrecht, business unit manager at HPE Aruba.
Cloud was introduced a few years ago to a number of critics and a few early adopters. The latter saw immediate business benefits and became the champions of the technology during the second, or education, phase.
During this phase, more businesses started to investigate how cloud could help them save money, increase performance and improve services, while addressing security, connectivity and access concerns.
Today, cloud computing is ubiquitous across organisations in South Africa, with many opting for managed services rather than deploying and maintaining the infrastructure themselves. Business sees the value, IT sees the value, and they’re all working together to move their businesses along the digitisation journey.
First comes cloud, then comes IoT
The next stop in this journey is the full adoption and integration of the IoT into businesses. But, for now, we’re still in the education phase. While businesses understand the value of the IoT, there is still some resistance from IT, who are again being forced to think outside the box just when they’ve come to terms with the changes brought by cloud computing.
Kevin Ashton coined the term ‘Internet of Things’ back in 1999 but, by his own admission, people don’t yet fully understand what it means. Too many people are more concerned about the ‘things’, or devices, when they should be concerned about the data those devices produce when they’re connected to the Internet – and the business-changing insights they can get when they analyse and apply that data.
As with cloud computing, a handful of industries are emerging as the early adopters. In South Africa, these are the retail and healthcare verticals, with some businesses being more mature in their adoption and use of the IoT than even European markets.
Retailers are advanced in their use of analytics to understand consumer behaviour and drive sales. They’re not only offering free connectivity in their stores (because who doesn’t love free WiFi), but they’ve also figured out how to monetise that connectivity. They do this through location-based services and push-down notifications to offer personalised offers to consumers that convert into sales at the tills.
Now, next time Sarah walks into the store, the retailer can remind her that she last bought cat food three weeks ago with a prompt to download a discount voucher that she can redeem immediately.
This suggests that marketing departments will be the ones identifying and driving IoT opportunities for businesses, as consumers increasingly demand personalised services and instant gratification.
While the healthcare sector is not as advanced as retailers in its use of analytics – although it’s fast catching up – it is leading the way when it comes to connecting and monitoring devices via hospital networks, for example. Through connected medical devices, doctors can remotely monitor a patient’s vitals, allowing them to provide better medical care and an improved hospital experience. Soon, you’ll be able to walk into a hospital, connect to the network, complete your admission on your phone and be guided to your hospital bed, seamlessly and efficiently.
Opportunity versus challenges
These early adopters are already reaping the benefits of increased business efficiency, higher profit and return on investment, and improved customer services and experiences. A recent international study, ‘The Internet of Things, Today and Tomorrow’, found that four-fifths of companies that use IoT technology report seeing an increase in business efficiency, while the average return on investment from an IoT deployment is 34%.
However, businesses are navigating a number of implementation challenges, which is hampering IoT uptake. The biggest of these is the cost of implementation (50%), maintenance (44%), integration with legacy technology (43%) and ensuring network security, with 84% of organisations that have used IoT reporting a security breach.
We see connectivity and application integration as the biggest challenges.
Many organisations offer connectivity to their users. While this is great for their customers, it’s a cost centre for the business as they haven’t yet figured out how to monetise their networks. This is because they probably have a third party managing that network. Without control of the network, businesses cannot monetise it.
But there are solutions available that not only give organisations that control – no matter what legacy technology they are running – but also allow them to set up multiple networks – internal and public-facing – with different access and security controls and built-in analytics to securely analyse data and improve their services.
Connectivity is arguably the biggest cost consideration for the IoT, but once businesses figure out how to monetise their connectivity, they’ll soon see impressive return on investment.
But businesses will never be able to monetise their networks until they build capabilities into their applications to collect, analyse and act on the data received from hundreds of connected devices.
Part of the education phase involves building and implementing infrastructure that is IoT ready. That’s where we’re at in South Africa. Next year, we’ll start to see more integration followed by full adoption from 2019.
As we saw with cloud, those that move quickly will have a competitive edge. They’re the ones who aren’t resistant to change, who understand that it’s not possible to do this alone and who partner with the best vendors who can take care of the backend while they focus on their data to transform their business.
The IoT is coming, and it’s going to impact your business. Make sure it’s a positive impact by moving fast and being among the early adopters.