The company says it has noticed these trends while working with clients during the past year, and considers IoT to be "perhaps the most transformative and compelling application of innovative technologies for businesses and consumers today." The trends range in scope, from the company and market level up to the actual technologies and data.
At the company level, McKinsey sees three trends emerging:
- IoT is a business opportunity, not just a tech opportunity - In the past, IoT has often been viewed as mostly a technology challenge, with a company’s CIO most frequently seen as the leader of its IoT efforts. But maximizing the economic impact of an IoT effort requires a broad set of changes to business practices as well.
- Disciplined execution across multiple use cases is the path to value - The most IoT value (in terms of improvement to the bottom line) comes from trying multiple use cases, each grounded on a clear business case tied to the strategy, and executing them with discipline, rather than the more common approach where the "sexiest" idea wins.
- IoT is gradually enabling more subscription business models, but consumers are resistant - "Power by the hour" is a concept that has been around in highly complex, expensive machinery such as aircraft engines for decades, but connected assets of lesser complexity and value can now also be sold by the hour or year. Manufacturers are increasingly offering "water pump by the hour" or "compressed air by the hour" services. On the household side, while non-connected lower-value products such as food and toiletries have long been available by subscription, connected higher-value product subscriptions (for example, appliances and computers) have become available but have so far trailed expectations.
McKinsey sees the following trends occurring at the market level:
- Favorable winds are blowing in heavy industrial sectors - The "industrial Internet" is real. The company sees clients gaining meaningful traction in oil and gas, mining,