2018 will be a very peculiar year for the Internet of Things. In fact, the public and the experts still cannot find a common language to define this phenomenon, and for this reason, there are different opinions, from marketers on one side, and psychologists and sociologists on the other.
For experts and marketers,IoT is obviously a great opportunity to finally create a functional networking between industries and final customersWith an approximate forecast of c.a. 30.7 billion connected devices by 2020, according to IHS, and a market which will grow its investments, reaching $6 trillion, the Internet of Things is destined to become one of the most attractive markets in the upcoming decades. This not only applies to industries which offer services in this field, but also to markets which are not properly “digitalized”, and are finally starting to notice the benefits of investing in the development of an IoT device.
On the other hand, recent events and content we are exposed to on a daily basis make the totally opposite predictions. From the dystopian society depicted in the award-winning series Black Mirror where, due to the massive use of Big Data, the Internet of things becomes the Internet of People, to the recent case of Cambridge Analytica and Alibaba’s Sesame Credit; the IoT phenomenon seems very far reaching and more pervasive than ever.
In this article, we’ll discuss the highlights of these recent events, which are literally making the history of the Digital Transformation Era. We’ll highlight what exactly happened, why there is so much fuss around them, and mostly, what tech startups can learn from these cases, as well as why now is the best moment to invest in building IoT devices, because of these recent events.
The most recent event, in terms of data spreading and influencing the decision processes, is surely Cambridge Analytica; a British data analytics companyfirm which is in the eye of the storm, due to it misusing the personal data of more than 50 million Facebook users.
Now, you’re surely wondering what the connection between this case and the IoT phenomenon is. Let’s take a glance at what actually happened and find out why Cambridge Analytica completely changed the market of the Internet of Things.
It all started with a mobile application, “thisisyourdigitalife”, developed by Aleksandr Kogen, a Cambridge University researcher, whose first and main purpose was the research and psychological analysis of users. How? Collecting data based on users’ behavior and opinions about everyday life, demographic information, such as age and nationality. Like many apps, “thisisyourdigitalife” spread all over Facebook, meeting the excitement of oblivious and non-suspecting users. Actually, according to Facebook’s privacy and policy agreement at the time, there wasn’t any kind of misuse of this data. Until one day, Mr. Kogen decided to sell all the acquired information to the now well-known Cambridge Analytica, which used it for political purposes. We are talking about the personal information and profiles of more than 50 million people. A company whose motto is, “Data drives all we do. Cambridge Analytica uses data to change audience behavior.“, used that information to influence the decision-making process of thousands of voters, during the 2016 US presidential elections. How? By producing and spreading information, which actually affected the sensibility of a big part of that audience, influencing their vote during the elections.
It wasn’t even a one-off. The British based company has an extended portfolio of data-driven political outcomes and is not afraid to brag about it.
The point is that, as we’ve seen on different occasions, the main benefit of the interconnection provided by the Iot-strategy is the enormous amount of data that might be collected.
But after the Cambridge Analytica case, a lot has changed in the IoT scenario, especially for industries and startups which operate in the field or are interested in being part of it. So, if you are interested in building your first IoT prototype device, you should consider these highlights:
Alibaba and its Sesame Credit is another very particular case which is under criticism in China. Alibaba is a private company, founded in 1999 by Jack Ma, whose main aim is to connect foreign buyers to the Chinese market, through e-commerce, Artificial technology, and Tech solutions. It is considered one of the largest internet companies, operating globally. In 2011, Alibaba was classified by Forbes as among the 2000 most influential companies in the word.
One of the affiliates of the Alibaba group, Ant Financial Services group, launched a software called Sesame Credit. It’s basically a scoring system, through which customers are given a score based on their social media preferences and behavior, along with past purchases on Alibaba’s e-commerce portal. Basically, if you have a good score, you can receive benefits such as discounts and credit to use on Alibaba’s affiliated groups. If your score is not so good, because you purchase stuff which is “not properly valuable” for the system, you are “penalized” by not receiving any bonuses.
Now, remember when we talked about the dystopian future depicted by the series Black Mirror? In one of the episodes, people can evaluate each other, based on their appearance in terms of trustworthiness and likeness, and on the basis of that score, the “system” will decide if they can be qualified to obtain a loan or buy a car, for example.
So the Sesame software experiment may seem unappealing to Chinese consumers, but in different terms, it might be extremely useful for tech startups which are considering to invest in IoT devices, and here’s why:
What’s the easiest way to achieve all three of them? By investing in an IoT prototype, which will help you track the behavior of your customers! In that way, you can make personalized offers and a customized experience for your clients.
We’ve already had a glance at the expected trends in the IoT industry, and one in particular, was the spreading of the Internet of Things within manufacturing and logistics.
In fact, according to IDC data, the manufacturing industry was the industry with highest proportion of spending on IoT solutions in 2016. Almost $102 billion US, from the total spending of $178 billion in IoT, followed by the other most profitable, vertical market in IoT, which is transportation.
The benefits for these two markets are huge, such as:
And these are only a few. According to the Verizon’s report:
On the other side, according to this report, the forecasts about the IoT spread in logistics are:
These predictions explain the huge demand for IoT devices and solutions in these two markets, which are pictured to be the most profitable ones in the IoT industry.
Therefore, whether you have a tech startup or you collaborate with the manufacturing industry or logistics, now is the best moment to invest in IoT devices, not only to increase your profits, but to also be part of the Digital Transformation a.k.a. Industry 4.0.
Start with having a look at our free checklist and discover what you need to know before developing your first IoT device.