IoT-driven insights spur product-asservice innovation

Singapore’s Land Transport Authority (LTA) called a tender mid-August to seek proposals to trial what could eventually make public bus ride-hailing à la Uber a reality. Commuters will use a mobile app to request pick-ups and drop-offs at any bus stop within a defined operating area. The aim is to deliver customized bus services, with possibly shorter wait time and to make the commute seamless and convenient.

LTA also hopes to apply data analytics and mobile application technologies, that have driven the success of ride-hailing, to optimize resources such as buses and drivers as well as operating cost, especially in areas and periods with low ridership, said Yeo Teck Guan, group director of Public Transport at the organization.

In the UK, several technology platforms that use crowdsourced buses and coaches to fill transport gaps and cut the cost of travel have emerged since late 2016 with options that are potentially fast, cheap and sustainable. The idea, reported The Guardian, is to blend tech-driven, personal transport services such as Uber with the UK’s traditional coach and bus network.

In such sharing economy applications, internet-connected devices and sensors, collectively known as the Internet of Things (IoT), are deployed in vehicles to collect and report data that provide insights such as passenger load and demand, traffic conditions, peak ridership hours, vehicles’ condition and much more.

Indeed, IoT is poised to shape the future of businesses and daily living within ongoing smart city initiatives across the region. In Hong Kong, for instance, the authorities have been using IoT sensors at strategic routes to collect real-time traffic data, in manholes of city storm drains to detect water levels, and inside hill slopes to detect impending landslides. IoT applications have also been deployed in luggage handling at the Hong Kong International Airport.

Energy, waste, and water needs can change minute by minute, and automated algorithms can allow for efficient pricing and distribution and for utility companies to be more responsive to changes in demand or system stresses, suggested McKinsey Global Institute (MGI). In Singapore, sensor data have been used to monitor traffic congestion patterns and adjust road tolls to minimize jams. The IoT and automated algorithms also help to reduce waits for public buses, and to inform drivers of parking availability.

Products as a service

The ability to track and control individual physical components and products such as cars, bicycles, umbrellas, lawn mowers and many others via IoT sensors as they are being used facilitate new ‘product-as-a-service’ or ‘platform-as-a-business’ models that transform the way business is done and products are monetized.

Researchers at MGI believe that products that report how they are actually being used can provide much better insight into customer behavior than focus groups, and they can even adapt to their customers’ preferences. “The ability to offer almost anything – from a drill press to a car to an aircraft engine – as a service can transform the very nature of what is bought and sold,” they said.

Physical products that used to be sold in a one-time transaction can now be offered as a shared service or utility the same way IT products are offered as a service in the cloud.

Possession of things

However, these IoT devices must first be connected and interoperable as well as integrated with analytics software to derive insights from real-time sensor data. MGI research estimates that this is required for 40% of potential value associated with IoT. For example, products or platforms deployed with sensors on various components can provide real-time streams of usage, performance and other data that can be combined and analyzed to help companies monitor product performance and inventory, schedule preventive maintenance and reduce unplanned outages or breakdowns as well as inspire new service-based products.

The bad news is that role-based or identity-based authentication and authorization to access devices, data and applications – such as customer behavior and transaction-based data – will become more problematic in the era of IoT and machines.

“Things are registered to an owner, usually via an e-mail address, and subscription services are paid via an associated credit-card,” observed Lori MacVittie, principal technical evangelist at F5 Networks. This follows the one device-one user model where possession is identity, or vice-versa.

But some things – like the air conditioning system or refrigerator or automated home lighting system – are not likely to leave when an owner sells the house, for instance, and moves elsewhere, MacVittie pointed out.

With such scenarios, the possibilities of IoT inspire innovative business ideas, concepts and ecosystems. Perhaps developers or estate management firms may one day embrace the role of a platform owner like today’s utility company or a service provider-cum-broker, offering smart digital homes with as-a-service options like electrical appliances; home improvement and gardening tools; gym equipment; and personal mobility devices, among others. And when the house is ‘sold’, active services can simply be terminated or transferred to the new owner’s name.

This is a QuestexAsia blog post commissioned by F5 Networks Asia Pacific.