Keeping Customers at the Heart of The Internet of Things: Impact, Opportunities, RisksThe Internet of Things brings with it great opportunities and great risks. Opportunities for financial gain and greater efficiencies for paying customers, and risks of misuse of data and dangers of turning into another method of unlawful surveillance.

We've all heard the saying, “If you’re not paying for it, you’re not the customer.”

In the era of pervasive mobile Internet, social computing and free social-networking platforms, the individual paying for a service and the user consuming the service are not always the same. So the question is, who is the customer and in whose interest does the technology service provider make its services available?

For social and search platforms -- the customer typically tends to be those individuals and companies who have subscribed to paid solutions like Google AdWords/AdSense, Facebook Advertisements, Twitter Firehose, etc. In effect, the people who are searching, tweeting, posting updates and photos are not the customer, but rather help generate the contextual data and information being consumed by the paying customers.

This situation is amplified in the context of the Internet of Things (IoT), where the data that is generated and acquired is usually from the physical world. Who owns this data, who is utilizing the services analyzed/computed from this data and who is paying for the data sensing, acquisition, analysis and associated services and thereby gaining the economic advantage of the ecosystem?

The customer of a platform or solution can be considered to be those who can affect a change in the platform or solution based on their requirements or changing needs. In that context, most of the people using the Internet-based platforms are not the customers of that platform, but users. In understanding the impact of Internet related technologies (including the Internet of Things) on a customer, this distinction between the users of a platform and the customers of the technology/platform is important.

IoT Device and Data Aggregation – Opportunities and Risks

At the core, the IoT is about sensing data wirelessly from a large geographical area, and then aggregating, analyzing and, if required, taking action based on that data. A large number of IoT Platforms and middlewares are currently available for helping solution developers and customers manage the IoT device and data deluge. While some of these platforms and middlewares are designed to be hosted on-premises (in customer data centers), others are designed to be used in the SaaS and multi-tenancy mode via cloud-enabled web services APIs.

A large commercial project is currently underway which, though not strictly an Internet of Things project, is looking to aggregate retail transaction data using Point of Sale (PoS) devices from over 9.3 million kirana stores in India (kirana is a small retail store that sells groceries and Fast Moving Consumer Goods products). A commercial initiative by SAP, called Project Ganges, is looking to provide highly affordable PoS devices that will scan retail products just when they are about to get sold, and will transmit this information in real time to cloud enabled data storage and analytics servers (as compared with the earlier data updates of retail transactions using batch-mode).

Opportunities arising from IoT for Customers and Users

The opportunities associated with the Internet of Things are immense. Cisco pegged the potential bottom-line value of the Internet of Things to be around $14 trillion in the coming decade (recently upped to $19 trillion). McKinsey Global Institute estimated the potential economic impact of IoT to be between $2.7 trillion to $6 trillion per year by 2025.

When IoT is appropriately implemented, it could provide customers with a real-time stream of data and information from a large, geographically dispersed part of the physical world. Such aggregation and analysis of data would be immensely useful for a wide range of decision makers, especially those who are adept at utilizing data to make decisions. As opposed to tweet-based “trending topics” or online search based “zeitgeist trends,” one of the fundamental strengths of the IoT is that it can provide the pulse of real-world events and activities.