Flourishing in the IoT era
The emergence of the Internet of Things (IoT) promises enormous digital disruption across industries. The IoT has driven incumbent industry players and startups alike, to explore new and innovative solutions and business models. In recent years, we have seen significant traction in the areas of edge devices (sensors, devices, and equipment), connectivity gateways (short haul and long haul), cloud platforms (to acquire and aggregate data globally), analytical models (to uncover actionable insights), and sophisticated dashboards (for informed decision-making). This has compelled organizations to develop strong ecosystems where multiple players collaborate to develop end-to-end solutions aimed at delivering the maximum value to the consumer.
The explosion of connected products and devices is opening up new opportunities, redefining competition, and spurring economic growth. McKinsey estimates that by 2025, the potential economic impact of IoT applications is likely to be between $3.9 and $11.1 trillion per year.
In manufacturing, connected systems are poised to significantly improve productivity and supply chain efficiencies. The IoT is set to fuel the fourth industrial revolution – Industry 4.0. Several industry players are already leveraging this to optimize their operations including:
- Horizontal integration (throughout the supply chain – from raw material procurement to production, to product use in the field)
- Vertical integration (IT-OT integration to enable real-time updates from the sales function to the shop floor)
- Mass customization (modular manufacturing to produce for segment of one)
- Manufacturing intelligence (data gathered from integrated ecosystems is analyzed to optimize production and reduce unplanned down-time through predictive maintenance)
Automation is improving operational efficiency and reducing process errors at smart factories. Recently, Foxconn deployed robots in its factories to replace 60,000 workers employed in mundane, repetitive tasks at its Kunshan plant in China.
Healthcare is another sector that is going through unprecedented changes. Connected solutions such as mobile health, telemedicine, and wearables are becoming increasingly popular, and being adopted across consumer segments. Wearable devices allow users to continuously monitor their sleeping habits, heart rates, fitness activities, and so on and relay the information to hospitals in real time. For instance, these devices can monitor blood glucose on a continuous basis, and measure blood alcohol level. At the same time, products like EEG biofeedback are revolutionizing patient care. This pain management product uses digital technology to monitor and control brain waves, distract patient attention, and restore brain's pain sensitivity to normal levels.
Aside of these industries, the network of intelligent and connected technologies has a notable impact on several other sectors. We see a range of smart products transforming the business efficiency and customer experience across industries such as retail and CPG, high tech, telecom, energy and resources, aerospace, and automotive. As the proliferation continues, there is a rapid increase in technology startups and entrepreneurs, along with growing investor interest.
The rapid emergence of IoT-based tech startups in India
Nasscom predicts that by 2020 India will have approximately 11500 technology startups employing around 250,000 people. However, the market is currently diversified and fragmented. This limits the ability of businesses to maximize the IoT potential. As the IoT market matures, we will need robust ecosystems where multiple players including corporates, startups, venture capitalists, and research institutes can collaborate. Such broad-based collaboration will fuel rapid innovation, maximizing IoT potential and fostering new growth opportunities.
Collaborative innovation will encourage corporates to go beyond their organizational boundaries and make a foray into unconventional business areas in partnership with startups, venture capitalists, academia, and so on. This will in turn help bring superior solutions to the market, addressing unmet needs or addressing the needs in more intuitive ways.
As a startup, it is important to look at the big picture in order to differentiate and take your company to the next level. Leveraging the existing client base of corporate partners for go-to-market opportunities, and addressing any technological gaps guided by the expertise that corporates bring to the table, will enable startups to effectively tap into various growth opportunities. We believe that such alliances are a sure shot recipe to drive innovative business models and deliver incremental value to end customers.
The TCS Co-Innovation Network (COINTM) is an example of a mature collaboration strategy that most corporates have laid out. Startups such as Crank Wheel, Ubiqu, and Revibe Energy were Slush 2015 winners selected and sponsored by the TCS COINTM.