The internet of things when applied to enterprises will take a lot of people out of business, will reduce the profitability of a lot of businesses and it will move massive gains to other businesses, according to Charlie Peters, senior executive vice president at Emerson, the process manufacturing firm. Peters came on Gigaom’s Internet of Things podcast this week (his remarks begin at the 26-minute mark) to share his thoughts on what the shift to a constant flow of information from a variety of places will mean for enterprises, and he didn’t mince words.
“It will be extremely disruptive,” he said. However, he saw that many of those massive gains will be made by startups because they will have the ability to move quickly. It’s a disadvantage to be a current participant because it precludes you from taking certain steps and slows you down when it comes to taking advantage of some of the changes that IoT can offer, he said.
He explained that the internet of things will bring three changes to the business: transparency, immediacy and productivity. Transparency lets customers and people inside the company get more information about what’s happening inside the business, be it about pricing or the status of a machine, while immediacy refers to the time element. That sensor data can flow to a plant operator in real time allowing them to take action the moment something slows down or even before it goes wrong. As for productivity, it’s not hard to see where this could increase productivity by helping automate decisions and let people take the information they are getting in real time and make decisions faster.
The challenge for any business in facing these shifts will be recognizing how to ride these changes while understanding how to maintain profitability. It’s easy to see how too much transparency can turn something into a commodity or how pushing productivity eliminates jobs, that in turn may cause social issues. Peters has this to offer business leaders worried about how to find their way to massive gains as opposed to being shut down during this next wave of innovation.
“Trod carefully and slowly because there’s a lot of land mines as you go through these things,” Peters said. “So you can kind of mess up and let your information which is maybe the key to the whole application out for free and kind of destroy the opportunity, so that’s the trod carefully. The trod slowly is there’s a lot of resistance, either from the other companies you have to partner with or for reluctant end users , where there’s a lot of inertia and until you get some pretty high levels of adoption some of these new business models don’t really work. And that’s where you have to expect to go slowly.”
For more of Peters’ thoughts — and he has a lot of good ones — listen to the rest of the podcast.