StartUps Not Enterprise Elephants Lead the Internet of Things

Start-Ups - Not 'Enterprise Elephants' - Lead the Internet of Things

4 minute read
Lori Alcala avatar

The Internet of Things (IoT) was a hot topic at last week's Gartner Symposium/ITxpo 2014 in Orlando, Fla. and the focus of new research released during the event.

Pete Basiliere, research vice president at Gartner, said the organization’s latest Maverick research shows innovators, tinkerers and entrepreneurs — otherwise known as “makers” — will drive the growth, use and acceptance of the Internet of Things, and not “enterprise elephants.”

In fact, Gartner predicts that by 2017, 50 percent of IoT solutions will be created by companies that are less than three years old.

An Internet of Very Different Things

Basiliere encouraged larger companies to “act like makers” to compete in the IoT market. Whereas enterprises tend to go with low-volume, high-revenue items, nimble starters and makers have the capability to develop higher volumes of low-revenue niche applications that apply to smaller groups of people, he explained.

He added that makers tend to be technology focused and have a high potential for growth.

Because makers and startups are not constrained by internal politics, they are able to more quickly develop solutions for niche needs, taking advantage of consumerization trends.

“In a sense, makers and startups are an extension of bring your own device (BYOD), but are definitely taking advantage of low component costs and the ability to have open source development,” he stated.

What you end up with is an “Internet of very different things,” he said.

Act Like a Maker

Referencing “Bimodal IT,” another big idea offered throughout the event, Basiliere reminded attendees that companies must combine rock solid, secure, efficient, effective IT with an IT that is fluid enough to adapt to a changing world to survive in digital business.

He offered the following ideas for how to achieve that fluidity and nurture a maker environment.

1. Establish one or more “makerspaces” within your organization.

Purchase equipment such as a 3-D printer, scanner, hardware and software that you can make available not only to designers and engineers, but to others in the organization, Basiliere suggested.

Learning Opportunities

He also advised allowing makerspaces to be available on weekends and after hours in order to encourage all employees to innovate.

2. Learn from the experience of large, yet nimble enterprises.

Basiliere encouraged taking lessons from those large enterprises that have already developed nimble product development processes.

“It’s part of being fluid,” he said. “What we learn from large enterprises, is it’s all about encouraging people to be outside of their normal workspace and have the opportunity to show that they have ideas that count.”

3. Revise your existing product development and ROI processes.

“Allow people to make and fail, and make and fail until they get an idea that works,” said Basiliere. “Just as makers and starters have a high number of ideas and a low number of success rates, you’re going to find that in your organization, as well."

He added “finance and accounting has to be adapted from the processes you have in place today.”

4. Invest in makers and startups

For enterprises that want to add startup solutions to their product mix, Basiliere advises the following:

  • Identify the makers and startups in your field or an adjacent market in order to explore partnership or acquisition opportunities
  • Monitor what is happening with startups using crowdfunding sites. Donate a few dollars so you can study their progress.
  • Examine startups carefully to ensure they are adhering to industry standards, such as those related to safety or electricity, for example.

Basiliere concluded with this thought around the impact of makers and startups on the Internet of Things:

Your next competitive advantage is going to come from a maker — someone who is not hindered by the way you do business today — someone who is not constrained by return on investment analyses, but sees a problem, sees an opportunity and then seizes that opportunity.”

Title image by Brian Snelson  (Flickr) via a CC BY-NC-SA 2.0 license.