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Industry Insight

Pop-up culture

Micro-industries and pop-up companies: the new IOT-driven economy emerges.

One of the challenges associated with the advancement of the concept of the Internet of things (IOT) – which promises a world in which every electronic device has a SIM card and its own presence on the Internet – is to define its role within SA's multifaceted distribution channel.

The channel, as it's colloquially known, is the network of companies involved in getting a product from the producer (or vendor) to the customer (or end-user) via intermediaries, in line with what has become the traditional sales process. Examples of intermediaries include distributors, dealers, value-added resellers, systems integrators and consultants.

When it comes to the IOT, it appears as if the technology is bypassing the conventional channel, as the manufacturers of myriad IOT-enabled devices – covering a wide range, from wearable activity tracking gadgets to crucial medical sensors, home management and security systems – seek to go it alone and establish direct relationships with end-users.

Old-school systems

This flies in the face of traditional business practices, such as the installation of a new corporate network, for example. Various IT companies (resellers) would be approached with a specification and, once the consultancy process was completed (often in association with a vendor, distributor and dealer), and a quote was accepted, one of the resellers would be given the go-ahead to install the infrastructure on the customer's premises (often using sub-contracted third-party organisations as well). Together, they would provide ongoing guarantees of support and maintenance in terms of carefully crafted service level agreements.

It is now possible to control almost all aspects of a smart home environment from anywhere in the world.

In the new IOT/smart device era, there seems to be waning interest in following these traditional business structures. As much as the advent of the cellphone industry influenced and changed the lives of consumers and many smaller entrepreneurs, so the IOT is heralding change in many industries.

While this may be bad news for the traditionalists, it is indeed good news for a slew of emerging companies that may not necessarily be IT-orientated but are able to apply their skills to address this emerging marketplace and take advantage of the many diverse opportunities it presents.

Take smart home applications, for instance: here, IOT-based devices are multiplying at a steady rate. They now include devices for appliance, energy and climate management, security monitoring and a host of automated control options. With the touch of a button, or a voice command via a mobile phone, it is now possible to control almost all aspects of a smart home environment from anywhere in the world.

As appliances – fridges, washing machines, microwave ovens, TV sets, entertainment systems – get smarter, they are also able to self-monitor their performance levels and highlight potential problems before they arise. The battery backup pack for a home security system – for example – is now able to be monitored; should one battery cell be undercharging, this can be reported and remedial action taken before a catastrophic failure occurs.

In fact, battery performance is dependent on a number of factors. In addition to discharge depth, battery life is influenced by storage conditions, ambient temperature, battery chemistry issues and the number and duration of cycles the battery has completed. All of these can be monitored.

This level of technical ability has opened the door for a new generation of companies to proactively market monitoring services to the consumer. What's more, by introducing simple sensors and modern communication systems to traditional devices in the home, monitoring services can be expanded, removing the inconvenience factor from common failures which could have serious consequences – such as the failure of the electric drive motor on a security gate.

While some in the IT industry might be lamenting the bypassing of the channel, it has opened opportunities for a range of players that will soon form the basis of a new economy within the industry. These companies will be able to leverage new and emerging technologies to create a vast number of revenue streams. Many of them will be linked to annuity-based services.

Device monitoring and management will no longer be the exclusive province of large companies with big budgets. This concept has become readily available to everyone.

Rather than receiving a hugely expensive bill for a burst geyser or suffering the consequences of an electric fence failure, the homeowner will be able to enjoy peace of mind for a nominal monthly fee. The consumer wins and so will a number of pop-up organisations and spin-off micro-industries that will mushroom based on their ability to decipher and use information provided by the IOT.

Going forward, the IOT will soon influence and enhance every aspect of daily life. The possibilities are endless. It's all beginning in the home.


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