Enterprise take-up of the Internet of Things (IoT) has not lived up to its early hype. The practical realities of connecting up devices and then making sense of all the harvested data proved too much of an obstacle to rapid progress. A more mature approach needs to focus on enabling business outcomes — which means plugging the IoT piece into other enterprise systems, whether in the cloud or installed on-premise, says Bernd Gross, CTO of digital connections vendor Software AG:
A connected world requires integration, fundamentally — integration between the physical world, which is the IoT part, and integration between the cloud services and on-prem.
Even the simple use case of hotels using digital keys, so that guests no longer have to physically check in at reception when they first arrive, requires integration behind the scenes to CRM, loyalty, reservations and facilities systems, he points out.
It's just a very simple example, but the reality is, to offer this type of service requires a lot of back-end integration to make that a frictionless experience.
That's easier said than done. For many of the enterprises Software AG works with, bringing this frictionless customer experience to life requires a massive effort.
The reality is, we have clients who have 60 different ERP systems. So it's not an easy task to do unique capabilities in order to enable this environment...
We're helping our clients to transform their business from an offline world to an online world with a truly connected customer experience. Meaning — for an enterprise customer — connected business processes, connected employees, connected machines, connected factories, whatever you have in mind there.
So it's a massive change. We are at a tipping point in that revolution. It has been anticipated — we called it IoT in the past — I'm nowadays calling it the truly connected world, with truly connected enterprises as key stakeholders in that environment.
IT and OT in the fractured enterprise
Production environments on the factory floor bring other examples of IoT in action, where the business goals might be customer-facing or focused on internal operations. Another disconnect comes into play here, between the operational technology (OT) teams who run the production line and the information technology (IT) teams who run the back-office business systems. Gross explains:
The IT team, they are thinking what type of servers do they need to run your software, what's your security concept? They're more on on the cost side, on the running IT side.
The OT people are more on the business side, either of selling new services to their customers or improving their own efficiencies ...
They quite interestingly have different aims, different targets, different timelines, they're speaking different languages. So it's a challenging environment.
Taken together, the human and the technology disconnects add up to what Software AG calls a "fractured" enterprise landscape that gets in the way of progress, he explains.
We do believe you have to overcome this fracture in order to truly successfully try and drive transformation projects.
That fractured enterprise is an enterprise which uses the IT in a discrete in a different way than the OT. And they haven't converged. They're running in two different directions, and sometimes doing projects which are overlapping. So it is not co-ordinated. That's why we are using the term fractured.
Cumulocity and the IoT landscape
It was the recognition of these disconnects that brought Gross into Software AG in 2017 as part of the acquisition of Cumulocity, an IoT venture that had previously spun out of telecoms infrastructure builder Nokia Siemens Networks in 2012. Cumulocity was created as a vendor-neutral, cloud-native platform that would work with any communications networks or hardware devices, providing a toolkit and templates for quickly building IoT solutions. But it soon became evident that integration to the existing IT infrastructure was going to be a core requirement.
The original idea was — and is actually — to move out of the traditional IT space and not target developers only and people in IT organizations, but to really target line-of-businesses with their needs, and the way they can utilize the tool. It's really the whole stack from integrating devices or machines or things, towards integrating to ERP systems ...
Half of an IoT project is integration. Because you have already existing business processes, you have existing IT systems, either on-prem or on the cloud. It's naturally the requirement from clients to want to do maybe standalone projects with, let's say, condition monitoring, and to learn the technology and get along. At some point in time, they will want to improve the existing processes or offer new services to their clients, and then you need to embed yourself into the legacy IT infrastructure. For that, you need to have integration capabilities. That's why we are in a happy marriage with Software AG.
In the Internet of Things, there's also a fractured landscape of devices, and connecting across this landscape was a specialty of Cumulocity from the start. While other IoT pioneers saw their role in terms of data analysis, Gross and his colleagues developed a technology called Cloud Fieldbus, which provides a codeless environment for connecting and managing devices from the cloud platform. Gross explains:
It differentiated us. A lot of our competitors focused on analytics. They assumed they'd somehow get the data somewhere and track to a database, but it wasn't correct. You have to work hard in order to collect the data you want to enrich or want to drive new processes.
Overcoming IoT obstacles
Making it easier to build and manage IoT solutions remains the goal today, despite the real-world complexities most enterprises encounter, says Gross.
Our ambition was from the beginning, we want to do IoT in a plug-and-play way without software coding ...
I'm not sure if we will ever reach that goal, but it's good to have that ambition because it will give us the right mindset what we want to achieve with the product. We want to really achieve a configurable, intuitive user interface, which helps business owners to solve their business problems.
Delivering this capability from the cloud often met with pushback in the early days, but attitudes have been changing — and acceptance of the cloud-native approach has advanced even further this year, he says.
I think COVID did accelerate that. People have become more and more confident that, for example, a cloud-based data management is at least as secure as an on-prem. That's very important, because in the old days, maybe two, three years ago, I can tell you stories, that people told me, 'No, no, I don't want to get the data out. They need to be here on my server under my table.' When you were looking in the office, there was no security!
The Internet of Things is one of those technology concepts that's been very prone to vendor hype. While practical use cases exist, they are much less prevalent than the hype would have you believe. That doesn't mean the concept has no relevance, but it has to acknowledge real-world constraints and goals.
Software AG's concept of fractured enterprise describes the constraints well. It's the opposite extreme to diginomica's concept of frictionless enterprise, and the journey from the former to the latter is a complex one for most established enterprises. Building connections is the key to enabling that journey, with particular emphasis on supporting engagement with customer outcomes. As for goals, IoT provides the technology for connecting products and machinery, but it's only when those connections can be seen in the context of the whole relationship between the enterprise and its customer that they can deliver useful outcomes.