4
F. Firouzi et al.
1.4 IoT Applications in Vertical Markets ....................................................
26
1.4.1 Smart Agriculture ................................................................
26
1.4.2 Logistics and Transportation ....................................................
26
1.4.3 Smart Grid........................................................................
27
1.4.4 Smart Building ...................................................................
28
1.4.5 Smart Factory ....................................................................
29
1.4.6 Smart City ........................................................................
33
1.5 IoT Business Implications and Opportunities ...........................................
37
1.5.1 Component Supplier: Component Business ....................................
39
1.5.2 Complete Solution and Product Provider: Additional Revenue ...............
40
1.5.3 IoT Customer: Optimization and Cost Reduction ..............................
41
1.5.4 Important Aspects of Implementation ..........................................
42
1.5.5 Data Monetization ...............................................................
42
1.5.6 Business Model ..................................................................
44
1.5.7 Minimum Viable Product (MVP) ...............................................
47
1.6 Summary ..................................................................................
48
References ........................................................................................
49
1.1 What Is IoT
By now, everyone has heard of the Internet of Things (IoT). Internet of Things
has been defined as the next logical stage of the Internet and its extension into the
physical world. It is the broad connection of devices that can interact with each other
and share data to a larger network, where the shared data can be leveraged to extract
value. All devices must have unique identifiers and use embedded technologies to
sense and gather data about themselves and their environment and transfer that data
to other devices or other hosts. Then these data must be correlated and analyzed
to inform more intelligent decisions. The technical challenges are appealing in
themselves, but from an industrial and business perspective, IoT presents a grand
opportunity to leverage previously unknown information and insight to transform
and create industrial processes and business models. This reality is a much greater
opportunity than a simple connection. Several companies have defined the Internet
of Things in their own terms, and it is instructive to examine these terms to see the
similarities and differences.
• IBM defines the Internet of Things as “the concept of connecting any device
(physical object) to the Internet and to other connected devices” [1]. IBM also
writes that IoT refers to “the growing range of Internet-connected devices that
capture or generate an enormous amount of information every day” [1].
• SAP defines the Internet of Things as “the vast network of devices connected
to the Internet, including smartphones, and tablets and almost anything with a
sensor on it – cars, machines in production plants, jet engines, oil drills, wearable
devices, and more. These things collect and exchange data” [2].
• Gartner says “IoT is the network of physical objects that contain embedded
technology to communicate and sense or interact with their internal states or
the external environment” [3].
F. Firouzi et al.
1.4 IoT Applications in Vertical Markets ....................................................
26
1.4.1 Smart Agriculture ................................................................
26
1.4.2 Logistics and Transportation ....................................................
26
1.4.3 Smart Grid........................................................................
27
1.4.4 Smart Building ...................................................................
28
1.4.5 Smart Factory ....................................................................
29
1.4.6 Smart City ........................................................................
33
1.5 IoT Business Implications and Opportunities ...........................................
37
1.5.1 Component Supplier: Component Business ....................................
39
1.5.2 Complete Solution and Product Provider: Additional Revenue ...............
40
1.5.3 IoT Customer: Optimization and Cost Reduction ..............................
41
1.5.4 Important Aspects of Implementation ..........................................
42
1.5.5 Data Monetization ...............................................................
42
1.5.6 Business Model ..................................................................
44
1.5.7 Minimum Viable Product (MVP) ...............................................
47
1.6 Summary ..................................................................................
48
References ........................................................................................
49
1.1 What Is IoT
By now, everyone has heard of the Internet of Things (IoT). Internet of Things
has been defined as the next logical stage of the Internet and its extension into the
physical world. It is the broad connection of devices that can interact with each other
and share data to a larger network, where the shared data can be leveraged to extract
value. All devices must have unique identifiers and use embedded technologies to
sense and gather data about themselves and their environment and transfer that data
to other devices or other hosts. Then these data must be correlated and analyzed
to inform more intelligent decisions. The technical challenges are appealing in
themselves, but from an industrial and business perspective, IoT presents a grand
opportunity to leverage previously unknown information and insight to transform
and create industrial processes and business models. This reality is a much greater
opportunity than a simple connection. Several companies have defined the Internet
of Things in their own terms, and it is instructive to examine these terms to see the
similarities and differences.
• IBM defines the Internet of Things as “the concept of connecting any device
(physical object) to the Internet and to other connected devices” [1]. IBM also
writes that IoT refers to “the growing range of Internet-connected devices that
capture or generate an enormous amount of information every day” [1].
• SAP defines the Internet of Things as “the vast network of devices connected
to the Internet, including smartphones, and tablets and almost anything with a
sensor on it – cars, machines in production plants, jet engines, oil drills, wearable
devices, and more. These things collect and exchange data” [2].
• Gartner says “IoT is the network of physical objects that contain embedded
technology to communicate and sense or interact with their internal states or
the external environment” [3].