It’s difficult to know where to start when writing about the Enterprise IoT market. While it promises to be huge in volume and dollar terms, it’s a very different beast than previous ones that have driven the IT industry’s phenomenal growth over the past three decades.
In the glory days of the PC, the industry was selling a standardized product that the user then customized to meet their own requirements with the installation of the applications that they needed. Once the system left the warehouse, the manufacturer didn’t need to provide very much additional support apart from occasional driver updates and RMA services if any problems occurred. Servers required higher levels of customization and support, but the juicy margins they commanded more than compensated for the extra work required.
By selling standardized PCs based on a common silicon and operating system platform, the industry was able to achieve extraordinary economies of scale and leverage the same basic IP set. Ultimately, of course, this model proved to be the industry’s Achilles heel because it led to intense commodification and stifled innovation but it was amazingly successful in driving PC adoption on a global scale – not to mention setting the stage for the growth of the Internet.
The Enterprise IoT market, in contrast, is driven by customization rather than standardization. As a result, the industry is having to learn how to provide hardware and software “solutions” that solve real customer problems rather than commoditized boxes designed for generic applications: in other words, sharp and precise Swiss army knives rather than powerful but unwieldy meat cleavers.
This change in dynamic represents a huge challenge for any company operating in the IT industry. Moving from a mass production to a mass customization model is a massive undertaking that requires a transformation not just of a company’s product development, manufacturing, and customer engagement processes, but also of its culture.
More on this subject in future entries.