16.08.2019 by Florian Marte

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Right off the bat, Jeremy Cowan asks the crucial question: technology or strategy? What is more important for a business when creating value with their IoT? The editor-in-chief of, British magazine, IoT Now asked Rami Avidan, Senior Vice President of IoT at Deutsche Telekom subsidiary T-Systems to do an interview on his popular podcast, Quickfire. 

Avidan’s unequivocal answer is based on the quintessence of hundreds of customer cases over the last 20 years; “Those who have been successful in deploying these projects and creating value have been extremely clear on what they want to achieve strategically.” Unlike the age before the Internet of Things, one doesn’t need to solely concern themselves with technology. Network technologies and IT are sophisticated enough for most IoT use cases. 

FROM LINEAR TO CIRCULAR: THE FUTURE OF PARTNERSHIP BUSINESS MODELS

Companies also need to change their thinking in the way of business models. Ten years ago, everything was linear; for instance, business A produced and sold to business B, who either refined the product or acted as a reseller and sold to the end customer. In the age of the Internet of Things, Avidan puts emphasis on a circular business model. What that means is that former customers can become suppliers, partners, or even competitors. “Every company needs to be extremely clear on who they are in this space. What is it that we are going to do? What is our position?” says Avidan. When this can be clearly defined, one can begin to create an ecosystem of partners. And these partners should be both strategic and technological partners. 

SECURITY IS MANY-FACETED

What about security in the IoT? The SVP of IoT sees the biggest challenge to be the lack of internationally accepted standards that ensure that proprietary solutions safely interact with one another. You can similarly apply the answer to the question regarding the importance of strategy here: questions about technology are not the top priority, rather organizational structure takes precedent. At the end of the day, it is often the case that safety margins can be attributed to organizational deficiencies.  For example, because the employee didn’t know the ramifications of an action, or because employees inadvertently endangered the security of systems and companies. The top preventative medicine is safety and education training. 

DATA: THE "NEXT BIG THING" FOR IOT VALUE CREATION

And what will be the “next big thing” for IoT? Avidan is convinced that, “The long-term value for everyone concerned is in the data.” He is referring here, not only to a company’s own data, but also the data that is created by other sources as an area for value creation. The goal is to find a solution in which companies can simply exchange data in a secure yet flexible manner. “That is exactly the solution we are working on,” say the IoT SVP. 

This extraction could be used to optimize coffee trade for example. An original equipment manufacturer (OEM) could extract information not only on a carrier’s vehicle data, but also on the contents of the carrier. For example, when and how many coffee sacks are being transported by the Brazilian coffee plantation. With this data, one can quickly surmise, for instance, whether the coffee would be harvested sooner than usual in the corresponding year or how profitable the current harvest is. Elementary factors that don’t necessarily mean much from the OEM perspective could have a big impact on the events on the commodities trading market and the behavior of the buyers. “In what may be unimportant information at first glance,” says Avidan, “huge economic potential is slumbering.