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Internet of Things (IoT) will Dwarf Big Data

By Andrew White | May 21, 2015 | 3 Comments

Internet of ThingsHype CycleData and Analytics Strategies

This “ah ha”, that IoT will dwarf big data, is slowly forming in my mind.  You might think that I am comparing apples to trees, but I am comparing them as innovations.  Right now we are running full steam ahead with our 2015 Hype Cycle’s so I thought it apropos I explore the idea.

Two weeks ago I was sitting at a keynote at a vendor conference.  The speaker, from one of the larger Systems Integrator’s (SI) said something I thought was interesting.  He said (and I paraphrase), “If every big data initiative worked as  currently planned, each of us would receive 2,356 promotions.”  I thought his point was really insightful.  His point was that so much of big data’s opportunity seems to be focused on discovering insights about customers (mostly consumers, at that) with a view to increasing some sales or revenue oriented angle.  So if all the big data efforts dig up some additional consumer  insights, we would get a whole lot more promotions (even if we don’t have a whole lot more money to spend).

This was an anecdote to me however.  The main reason I feel that IOT is going to dwarf big data goes back to an idea I had over a year ago.  Earlier in 2014 I was doing the same work I am doing now but in relation to the 2014 hype cycle’s.  I was working in various teams trying to agree where and how far developed market hype was for a number of technologies and topics.  At the same time I was refreshing my understanding for how innovation permeates an industry.  I re-read, again, all my notes from Utterbeck (Mastering the Dynamics of Innovation, 1996).  And as I did this an idea came into my head: not all innovations are equal.  I don’t suppose this is too thought provoking, at least how I wrote it.  What I thought however was that how we, Gartner, were reporting innovations wasn’t describing what really was happening in the market place.  I formulated my idea and shared with some analyst big-wigs.  They showed mild to low interest in the idea so I figured they were not interested in developing it.  However it is back in my head again.

The basic idea is this:  some innovations are discrete, even silod, in that they stand on their own.  They “come and go” according to the Gartner Hype Cycle; they may follow the pattern normally; they may re-form midway through, and reappear as a new ‘thing’.  This is how the majority of innovations evolve.

But there are other types of innovation that appear to behave in much the same way, but for one major difference: They act as a platform.  Such an innovation may move along the hype cycle, perhaps more slowly than other technologies or ideas (memes).  But as platforms, they spin off all manner of other, dependent innovations that could only have emerged from thee preceding platform innovation at a point of maturity.

This has led to an idea that every innovation has an “innovation platform coefficient”, or IPC.  Some technologies have a low IPC, and some have a high IPC. Those with low IPC’s operate as discrete, one-off ideas.  Those with a high IPC suggest possibly different behavior with a high propensity to create new, dependent innovations as spin-off’s, over many years.  I don’t think the idea is perfect: I am sure there are examples that imply everything is dependent on everything else.  But examples like the solid-state electronics, ERP, Business Intelligence, and Big Data stand out.  IoT is just another example.   So what about “technology’s” role in growth and productivity?  Is “technology” just one thing or does hardware and software differ in its impact?  How does software really evolve and support innovation?

There is much published on the finding that US productivity improvements peaked some years ago and has started to stagnate or fall.  Only a couple of years ago there were alarming reports in the US and UK about how productivity seems to be flat or falling.  This is a major issue for us all since it is only through productivity improvements that our collective standard of living will improve.  The introduction of computers to the workplace helped; ERP helped a lot; the Internet helped a lot.  But what now?  Has IT spent its lot – and are we now in a phase of only incremental improvement at best?  I have been trying to find the answers in the data.

The problem is that the data collected and produced by the US Department of Labor and Statistics is not that helpful.  And they recently re-classified some of their understanding of software and hardware that makes looking for what I am looking for even harder to find.  I think they did what they did due to the fact that they do not fully understand IT and specifically how software-based innovation permeates an industry.  Software is very different to hardware.  Some innovations act as platforms that do not offer up improvements in the data until much later.  My concern is that I am looking for the next big thing — the next big platform that could, in a few years, push the US (and other) economies into high gear through significantly improved information and technology based productivity.

So here we are in 2015 and here I am looking at big data and IOT.  Big data seems too narrowly focused, and though its technology is spinning off new tools and solutions, how they are being used is just too focused.  Then we have IOT.  IOT represents both the idea that more than customers leave behind digital footprints (devices, wherever they are, do) and we need the same, if not more, analysis capability.  And IOT also couples together the idea that by instrumenting everything, the very process themselves may change – completely reinventing what it was that was being instrumented in the first place.

So in my mind (and using the language of my idea) big data has a low to medium innovation platform coefficient and IOT has a very large innovation platform coefficient.  I believe that big data will continue to burn bright for a little while longer, and create a few, new spin-off ideas and tools.  Big data will help with some information and technology based productivity improvement, mostly customer facing.  But it will be IOT that will dwarf and consume big data and then burn long into our collective future.  IOT will be a major platform for all – more than ERP, more then Business Intelligence, more than big data, more than CRM.  IOT could be the one (think Neo) as in the primary IT innovation that creates the next big step change in productivity that we so urgently need.


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  • Richard Benjamins says:

    I agree IoT is transformative, but big data is much more than CRM and better offerings. You can optimise any process in a company; sales, finance, operations, field services, procurement, channels, innovation, digital services, IoT.

  • Danny Brewer says:

    I think you are on to something. For example: the privacy and security structure around IoT could become an entire industry.

  • Ken Morris says:

    You make a number of key points Andrew. IoT by its very nature is functions as a platform. Danny Brewer is correct in that privacy and security within IoT are likely to become dependent yet entire industries unto themselves.