We call Supply Chain Matters reader attention to a new report released today by the Boston Consulting Group (BCG) titled: The Incumbent’s Advantage in Internet of Things. 

This report is the second in a series directed on how companies and services entities can capture the value of the data and information generated by Internet of Things (IoT) enabled processes.

Among other observations, the report estimates that the installed base of IoT connected devices will grow from about 11 billion today to 125 billion over a ten-year period. Obviously, that is a significant number. Yet, later in the report, a statement is made that adoption is still in its infancy, but competitive dynamics for monetizing IoT data are still taking shape. Internet of Things Technology

For us, the report triggered some parallels to the original introductions of both item-level bar coding and RFID technology, and the notions of those who owned and monetized the data would prove to be winners. That wasn’t necessarily the case.

The authors address four significant questions related to IoT business models:

  • Where is there sufficient potential for IoT solutions and services to create value for customers? Under what conditions could rapid adoption of such solutions and services occur?
  • What structural factors determine an individual company’s right to win as a provider of IoT solutions, services, or platforms?
  • How can companies monetize their IoT investments and data?
  • How can IoT platform and ecosystem providers attract customers and ecosystem participants?

This report further concludes that a handful of structural factors will determine a potential IoT solution provider’s right to win along with the various likely paths to the monetizing IoT.

Finally, what we found to be most interesting, was the addressing of opportunities that BCG believes provides the largest addressable market as well as opportunities. General and capital equipment manufacturers, along with their contracted systems integrators will likely take keen interest in this section.

There are warning signs noted by the report authors, specifically that in one of the most addressable markets, there are already more than 400 IoT platform providers in operation and that: “some form of shakeout is inevitable.”

This report can be downloaded at this BCG web link.


Bob Ferrari

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