IoT: Device manufacturers over time

14.12.2018 – Benedikt Ostermaier


Article for Computerworld from December 14, 2018

Digitization is putting pressure on established device manufacturers in many industries. A paradigm shift is needed: from static products to dynamic, networked system solutions.

Established device manufacturers are currently facing major challenges. On the one hand, customers expect increasingly networked products that can be controlled by the manufacturer's own smartphone app and easily integrated with solutions from other manufacturers. Providing new functions through device software updates is just as much a part of the expected repertoire as remote maintenance and control via the cloud. And, of course, this all needs to work smoothly and reliably. Ideally, the product is still "smart" and, through its "smart" behaviour, provides relevant added value compared to traditional products. For example, when a home is unoccupied, smart lighting can automatically simulate a presence via a self-learned process.

On the other hand, the necessary expertise often exceeds that of the traditional device manufacturers. They are accustomed to thinking in terms of products and have little experience in developing networked system solutions that go beyond their own devices. Scalable cloud solutions, smartphone apps or modern web front-ends are outside the core area of device manufacturers, but are becoming necessary for the product solution. In addition: The IoT environment is still very dynamic. There are so many platforms, standards and technologies that even experts find it difficult to give an overview. Consolidation is inevitable but will take a while to come. Furthermore, the expected product lifetimes of devices (between 10 and 20 years, depending on the industry) conflict with the rather transient innovation cycles of the software and electronics industries.

Connectivity as a game changer

Depending on the industry, manufacturers often do not know where and how their device is ultimately used, as it finds its way to the end customer via several intermediate steps. In the future, manufacturers will be able to gain transparency across their entire lifecycle by networking devices with their IoT cloud platform: From digital birth certificates during production to commissioning, operation and possible disposal, all essential data can be continuously collected and evaluated. In addition to improving and further developing the product range, this also enables new approaches such as optimising maintenance intervals.

If a device is continuously online, its functionality can be flexibly supplemented with services from the cloud. There are significantly more resources there than on the device and a completely different quality of use cases can be achieved. In addition, cloud services are not as easy to copy as a device's firmware, which can make piracy more difficult. Third-party systems can also be flexibly connected via the IoT cloud platform as interoperability is a key aspect of the Internet of Things. Lastly, the device's Internet connection allows it to update its firmware from the cloud.

Digital device care

On the manufacturer side, the core area of device development is subject to major changes. Up to now, the software embedded in the devices is only updated purchase in exceptional cases, such as when there is a quality problem. Due to the networking of the devices, it is absolutely necessary on security grounds that updates can be installed in the field and, if required, also automatically. New features can also be added using the same mechanism. This enables products to be continuously improved, even after delivery. US electric car pioneer Tesla has been successfully using this for many years to keep its customers onboard and the depreciation of its vehicles as low as possible. This even includes features such as faster acceleration, which was provided as an over-the-air update. When consistently executed, this results in software-defined products, meaning that the majority of the device functionality is achieved with software and can be adapted flexibly throughout the entire lifetime.

Smartphones as digital Swiss army knives

In the future, smartphones will also establish themselves in device manufacturers' service areas. Up to now, proprietary service devices that communicate with the device via a local interface are often used to commission the devices or service them. Replacing these service devices with a smartphone app offers many advantages. The service engineer always has his smartphone with him, the service app can provide much better usability than a dedicated service device, and additional functionality is just an app update away. Cost savings can also be made by eliminating the dedicated hardware. Since the smartphone is online anyway, devices that are not online can be temporarily connected to the Internet. The smartphone acts as a mediator between the device and the manufacturer's IoT platform.

IoT platform in the cloud

Typically, a manufacturer uses an IoT platform to connect to all its devices. This provides a digital twin for each physical device that can monitor and control its counterpart. Furthermore, device management including rolling out firmware updates and archiving data sent by the devices also forms part of the typical scope of use. The IoT platform is the linchpin for any interaction with the manufacturer's devices. Instead of developing and running this platform itself, it makes sense to leverage an existing IoT platform in the cloud – allowing the manufacturer to focus on its core business.

IoT ecosystems – greater than the sum of the parts

In order to create sustainable added value, manufacturers should not focus too much on networking individual product solutions. Otherwise, there is a danger of creating products that, although linked, cannot benefit from synergies, and thus are only expensive and time-consuming to integrate within the product portfolio. In the worst case, a company would have made a large investment, but also accumulated a lot of technical debt.

Instead, you need to keep an eye on the big picture: As far as reasonable, all of a manufacturer's devices, apps and cloud services should seamlessly intermesh with and complement each other. Together with other areas, e.g. device production, this is the way a manufacturer develops an IoT ecosystem whose added value arises as a result of the interaction of all components. Therefore, there are strong synergy effects to be gained at a technological and organisational level.