Aug 12, 2015

Internet of Things: Smart Strategies for B2B High-Tech Marketing

According to Wikipedia, the Internet of Things is defined as, “the network of physical objects or ‘things’ embedded with electronics, software, sensors, and connectivity to enable objects to exchange data with the manufacturer, operator and/or other connected devices based on the infrastructure of the International Telecommunications Union’s Global Standards Initiative.” My simplified description is, “making everything digital and connected.”

I had a friend who, years ago, left Intel to start a company to connect kitchen appliances to the Internet, and I have to admit I was skeptical. The IoT vision is taking that concept so much further with the intent to connect everything from diapers to hydroelectric dams. I guess, if you are able to measure the flow of liquids, it doesn’t matter if it’s a few ounces or a few million cubic feet.

I shouldn’t be surprised having seen first hand the evolution of computing and communications during my 27 years in Intel’s Embedded and Communication Group, which was renamed the Internet of Things Group. The natural next step in this evolution is for all electronic devices to be connected into the mainstream Internet. The vision is for everything to be connected, sensing and collecting data from the specific environment it is in, analyzing and culling that data for useful information, and then communicating this information to decision-makers for the purpose of taking specific actions.

Similar to the Cloud, which was a mystery in the beginning (some would say still is), the Internet of Things — also known as Cisco’s Internet of Everything or GE’s Industrial Internet — was started as a new high-tech marketing vision and needs time to evolve into a well thought out and viable business. The truth is, new markets and initiatives start as a vision by someone and in many cases it comes out of sales or marketing in order to increase revenue.

Years ago, and shortly after the excitement of the cloud hit fever pitch, I remember a conversation with a venture capitalist out of the Bay area. His comment to me was, “if you want to get investment, all you need is to put ‘cloud’ in your name and you will get funded. It doesn’t matter if you are a cloud seeding company, because nobody knows what the cloud really is.” Having been there at the beginning of IoT at Intel, I can relate to the similarity of this view.

In truth, IoT has been around for some time. The first incidence of the term “Internet of Things” was in 1999 by Kevin Ashton, who was co-founder of the Auto-ID Center at MIT. He states, “We need an internet for things, a standardized way for computers to understand the real world.“ I personally saw the term Internet of Things for the first time in 2006 when I read a report from the ITU dated November 2005. It took a few years for marketing to see the opportunity and for companies to start embracing it, but it is certainly getting plenty of air-time now.


If the Internet of Things is just a marketing term at this point, then what is the real opportunity for companies to make money from IoT? You can ask any number of analysts who will give you a different answer, but I will use the research from my time at Intel.

As early as 2010, I spent time researching the opportunity at the very edge of the Internet. I found a number of companies, such as Cisco and IBM, were forecasting as many as one trillion sensors to be deployed somewhere between 2020 and 2025. These sensors will be everywhere, collecting data on just about every aspect of the physical and environmental world. For companies selling sensors, this is a pretty sizeable opportunity and one I think I would salivate at trying to capture. But, this is really only the tip of the iceberg.

The real challenge in having this many sensors collecting petabytes of data is to have the infrastructure in place to be able to find the nuggets of valuable information in a real-time manner and communicate those nuggets in a meaningful way. This requires intelligence at the edge and creates an opportunity to develop and sell edge devices that will sift through the massive amount of data and turn it into useful information. Forecasts of 50 billion such devices by 2020 are widespread.

Why is this so important? For three specific reasons:

  • The need to get the valuable information out of the data and disseminated quickly in order to make meaningful decisions.The example I like to use is the new bridge over Interstate 35 in Minneapolis. After the collapse of the previous bridge it was replaced with a smart bridge that has a number of sensors to measure pressure, cracking, movement, etc. If the bridge is collecting all this data, but it isn’t being filtered for the key piece of information that might predict a cataclysmic event, what is the value?
  • The need to trim down the amount of data communicated across networks. One trillion sensors collecting data 24 hours a day, 7 days a week can create a lot of data. If all this data is pushed into the cloud and back to data centers, the network infrastructure required to support the Internet of Things will be immense. This will make providers of network equipment very happy, but IT managers very frustrated.
  • The final reason for intelligence at the edge is to have one more layer of security to protect against harmful intrusion.

Another opportunity is in developing and selling the gateways to which all these edge devices will connect to the Internet. The value of the gateway is in serving as the hub for a series of edge devices communicating information to the cloud, or wherever the final information may be routed. This serves as the aggregation point and also another point of security.

Finally, even with the intelligence moving to the edge and filtering the massive amount of data into a more manageable amount of information, there will be a need for a more robust networking infrastructure, including increases in the number of servers and data centers. Cisco is certainly betting on it as demonstrated by John Chamber’s projection that the Internet of Everything will equate to a $19 trillion global opportunity over the next decade. IDC estimates IoT solutions will grow from $1.9 trillion in 2013 to $7.1 trillion by 2020. These numbers certainly get the attention of most CEOs and even if IoT is only a marketer’s dream right now, it will soon turn the corner into a tangible revenue-producing opportunity. How many people five years ago would have imagined that almost 1 in 3 people in the world would have a mobile phone? Many estimates suggest two billion mobile phones will be sold in 2015. I was in high tech (including high-tech marketing) for over a quarter of a century and I am still shocked by the growth we have seen in the various technologies introduced throughout the years.


The first challenge for executive teams is to define a B2B IoT strategy to position them for success. This requires performing due diligence to understand the market and where the real business value lies. It is easy to make a product smart; it is not as easy to determine the problem that smart product is trying to solve.

Gartner released a report in February 2015 that shows “more than 40% of organizations expect the Internet of Things to transform their business or offer significant new revenue or cost-savings opportunities in the short term (over the next three years), rising to 60 percent in the long term (more than five years). However, those surveyed said many of their organizations have not established clear business or technical leadership for their IoT efforts.“ It goes on to say, “The real challenge of the IoT is less in making products ‘smart’ and more in understanding the business opportunities enabled by smart products and new ecosystems.” The strategy will help define clear business and technical leadership goals, and deliverables.

I have one caution from experience for those responsible to deploy their companies Internet of Things strategy. The temptation will be to quickly get on the bandwagon and start promoting their IoT “solutions.” The problem in the beginning of any new market is the myriad of “products” out there, but few real “solutions.”

Jens Wiegand, CTO of global embedded computing technology provider Kontron points out, “IoT and Industry 4.0 concepts like predictive maintenance, big data, and analytics require a holistic approach. Yet, the problem is a lack of cooperation between the members in the market like hardware and software suppliers, service providers and communication infrastructure vendors. The fragmentation of the market and incompatibility of products is a serious hurdle on the road to the IoT.”

To compound this problem, IoT will need to support connectivity for a host of equipment residing in existing infrastructure where connectivity wasn’t considered during build out. It is one thing to design a complete system from the ground up and build in the necessary interoperability, but to retrofit systems that have been in place for years increases the challenges exponentially. This is where gateways will need to have built-in functionality to support multiple protocols and at the same time be able to protect these older systems from the ever-present threat of intrusion. Imagine the chaos if someone could hack into an industrial network and remotely take control of an automotive manufacturing floor. Even microscopic changes to specifications and tolerances of parts would wreak financial havoc.

One answer to this is to develop an industry consortium to align the various components of the complete solution early in any new market segment. This is not the most popular approach due to the heavy lifting required and the competitive nature of business and hesitancy to give away any competitive advantage. Unless you are a Fortune 100 company and have the funds and resources for absolute vertical integration, there needs to be a strong ecosystem to have any chance of delivering a complete solution. In the absence of an industry wide effort, the second best solution is for your company to develop an ecosystem program to align necessary partners. This doesn’t resolve all issues, but can allow you to focus on a few priority partners to work with to deliver a working solution.

Developing a strong ecosystem of compatible elements of a complete solution is difficult and takes time, but in the overall scheme will certainly lessen confusion and absolutely save time.

A second challenge is faced by the marketing department in how to effectively build credibility and win the hearts and minds of potential customers in a fledgling new segment. The easiest answer is: “Don’t overcommit and under deliver.” I know it is tempting to want to throw your hat in the ring as quickly as possible to be recognized as a player. Even big companies like Intel, Cisco, and IBM do this. Companies that come out with big talk and little action are quickly pushed aside when the market discovers they can’t back up their talk. Big companies have many advantages that make it easier for them to play this game. They have millions of dollars to throw at building or buying their way into a market, they have lots of people to throw at solving problems, and they have long term credibility that makes it easier to brush off any short term failures as a result of over commitment. Mid- and small-sized companies usually don’t have these three things to fall back on if they can’t deliver on promises made.

The safer route is to do an in-depth internal audit of what products you have in your portfolio that can truly solve real world problems and package them in a way that maps to the value statements of new initiatives like the Internet of Things. Think of it this way: Would you rather immediately jump into a race across the Pacific Ocean with a boat filled with holes and no supplies, or wait to start when you have a water tight vessel and the provisions to finish the journey? You may get a later start with the second option, but you will have the pleasure of passing your competitors who are foundering, and have run out of fuel, food, and/or water.

The right approach to enter any new segment and in particular the Internet of Things arena is to:

  • Conduct research to understand the prevailing winds of specific industries visions of IoT
  • Analyze your findings and filter through the new high-tech marketing fluff to find the real strategic value
  • Create your own vision and messaging aligning to value propositions in what you bring as real solutions for the problems that drive the need for IoT
  • Stake a claim as an “expert” and drive your own thought leadership campaign to show why the market should come to you for insights and answers
  • Deliver on your promises

All of these elements are critical, but I am of the opinion the last bullet is the key to success. It is important to do the research, analysis and development to have the right solutions, but if you don’t ultimately deliver on your promises you will have the market longevity of the Pet Rock which lasted a total of six months.  Now, I will admit there are managers out there with a short-term vision who would be perfectly content with the $6 million pay-out Gary Dahl made in six months with the Pet Rock, but I would rather create a long-term viable business that solves real-world problems and stays around for years to come.

Will the Internet of Things be the next big thing? Can you afford to miss out if it is? Check out our infographic and witness the revenue potential at play.

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