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The Internet of Things (IoT) — Internet-connected devices that communicate with one another — has been highly discussed in recent years, especially as the capabilities of smart technologies continue to advance. Most tech-savvy consumers are aware of the way that the IoT will impact their home and work life, but what does this upcoming trend mean for the business world?
"The 'connected world' vision is no longer a buzzword — it's already happening," said Waqas Makhdum, vice president of marketing at cloud mobile app development platform Kii. "Over the next few years, we see it becoming an integral part of our lives, whether it is through smart homes, smart cars or smart health care. It's clear that the IoT will disrupt most industries."
Five tech industry experts shared their thoughts on the major changes that will come with the evolution of the IoT, and what businesses of all sizes can do to prepare and adapt.
Focus on services
In years past, technology advancements were focused on hardware: Everyone needed to purchase a certain device or program (and each subsequent version) in order to stay current. But as the IoT advances, Raj Badarinath, senior director of product marketing at commerce solutions provider Avangate. believes that this model is going to change.
"Revenue will not come from the hardware, but instead from services on top," Badarinath said. "In the IoT era, new models such as subscriptions, freemiums and bundles are rapidly becoming the preferred choice over traditional hardware options. Services are easily upgradeable, much more amenable to ecosystems that are constructed around hardware, and provide multiple revenue opportunities rather than a one-time sale."
The problem with this service-centric environment is that small businesses are struggling to find the best strategy to charge customers for value in a transparent, secure and easy manner, Badarinath said. A customer-centric commerce platform can keep track of critical data like purchase history, payment methods and loyalty program information to help companies improve the customer experience and create a solid foundation for monetization.
Harnessing and analyzing data
The premise of the IoT is that, at any given time, devices can transmit data to and from one another and process it to improve decision-making. Businesses have already been tackling the challenge of harnessing Big Data through their own internal analytics platforms. The IoT presents this same challenge on an even larger scale.
"The IoT is not just about connecting cameras, fridges, vehicles, etc.," said Todd Krautkremer, vice president of sales and marketing at cloud-based virtual private network service Pertino . "People want to analyze vast amounts of data and be able to do things with that information that are relevant and impactful. But how do we take this data and make it intelligible, accessible and actionable from a business standpoint?"
Krautkremer emphasized the importance of cloud-based computing to ensure that all connected devices can always be monitored, updated and controlled in real time. He also noted that third-party service providers will be critical to helping smaller businesses keep track of data and capitalize on the IoT. [MORE on Live Science: What Is the Internet of Things ?]
The cloud and the customer experience
It's clear that the IoT will continue to increase the amount
of data businesses need to process. But with such a strong focus on finding the right data solutions. it can be easy to lose sight of your most important business driver: your customers.
"Companies have to keep an eye on their customer experience," said Lynda Smith, CMO of cloud communication solutions provider Twilio. "There's a lot of work going into making sure [the IoT] experience is natural [to human users]."
Smith reminded small companies to take advantage of the cloud to help them develop a great customer experience and compete with larger enterprises. This can range from using cloud solutions to deal with incoming customer data to facilitating customer service interactions in the cloud.
New security challenges
The downside of the IoT is that more data and more connected devices mean more opportunities for hackers and cybercriminals to launch an attack. The security risks associated with the IoT must be taken into consideration by businesses of all sizes.
"If you have devices recording and reporting [data], there's a lot of risk," said Walker White, CTO of clean data solutions provider BDNA. "If a device is connected, it can be hacked. With fully automated security systems, someone could break in, lock all the systems, and even remotely turn the lights on before they get there. These are very real risks."
If you think the answer is to "avoid the IoT," think again. White believes it will be nearly impossible to steer clear of the age of connectedness.
"People say they won't embrace it, but that's like saying you don't embrace the Internet now," White said. "It's coming and you can't fight it. Everyone will benefit [from the IoT], but unlike other technologies, this has a great deal more risk. The broadest storyline here is to proceed with caution."
'IoT-izing' your business
Many businesses, especially smaller ones, are usually late adopters of technology, Makhdum said. But the IoT presents an opportunity for businesses of all sizes to add real value to their bottom lines, customer satisfaction and other significant KPIs.
"It is very important that businesses remain proactive in building a plan framed around what part of their company can practically be 'IoT-ized,'" Makhdum told Business News Daily. "Framing and planning this will be crucial for successful IoT initiatives."
Makhdum recommended investing in the IoT-related technologies such as sensors, data intelligence and infrastructure to support the volume of connectivity and resulting data. Focusing on employee training in both customer-facing and internal processes will also help companies take full advantage of the IoT.
Finally, be sure to connect with others in and out of your industry to stay up to date on the latest changes that may affect your business.
"There will be unpredictable and unexpected challenges that occur in real-time that will be hard to be prepared for," Makhdum said. "Collaborating with industry and cross-industry consortiums help ensure sharing best practices across the board."
Nicole Fallon received her Bachelor's degree in Media, Culture and Communication from New York University. She began freelancing for Business News Daily in 2010 and joined the team as a staff writer three years later. She currently serves as the assistant editor. Reach her by email. or follow her on Twitter .
Category: Personal Finance