The Economic Value of IoT - Data?

Last year I attended one of these IoT networking events with speakers from a couple of IoT industry players. The discussion suddenly turned tense when one of the speakers categorically stated that the main value of IoT was the data collected. Yes, I participated in that discussion by stating along the lines of my previous blog that there was plenty of product margin to be derived from IoT and that this was just as important as any data derived.

So what is the value of IoT data?

Well, it depends on what the data is, how it is collected and 'what it means'! In a previous consulting engagement I worked with a company that collected a tremendous amount of data on a daily basis. The company was flooded by requests from then 'hot' data analytics companies who wanted to 'partner' and explore the data. The fact that this data belonged to customers did not seem to ever have entered their thoughts nor the fact that this data may simply be useless static data collected on a daily or hourly basis - or random data from an encyclopedia data base for that matter! The problem was mostly the latter as the people who decided what data to collect had mostly opted for 'all'!

Which brings us to the crux of the 'data' matter! What really constitutes 'meaningful' data! In my view it is data associated with 'meaningful' events occurring in or around the IoT product. A couple of examples will illustrate this point:

  • Minute reading of environmental data (temperature, pressure, wind etc.) is only meaningful if it is translated into some type of statistical information over time. Unless the environment is one where sudden transformations suddenly occur.
  • Data monitoring the ongoing performance of a piece of equipment is only meaningful if this information can be translated to actionable events like turning the equipment off when pressure reaches a threshold level.
  • Recordings of financial transactions are always meaningful because they record an event that relates to some type of economic value.
  • Data collected at a pipe-line pump station is meaningful if it signals anomalies from normal levels - these are often called alarms.
IoT is supposed to collect data on a continuous basis. However, most of this data is truly useless as it only represents normal conditions of the IoT product or system! And we already have monitoring systems that record and report alarms.

Which brings us back to the Data value of IoT! IoT Data will only be valuable if it reflects 'events' that are not recorded by daily operational data or alarm systems. These events will have to reflect important operating and use conditions of IoT products and systems not captured by current methods!

IoT data event collection really has to represent something new and different from what we currently see today!

More about this in the next  'The Economic Value of IoT - Data' blog!

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