IoT Platforms Do Not Steal Customer Data
There’s a recurring assumption in discussions about internet of things (IoT) platforms: The platform providers make their money by mining insights from data loaded into their platform. They sell those insights back to the customer who put the data there in the first place and will also sell them to anyone else who can pay.
We hear this assumed, or “known about,” notion again and again. But it’s not really true.
Every vendor responding to Forrester’s Q2 2018 Global Data Ownership In Industrial IoT Platforms Online Survey was clear that the customer owned their own data, even when stored in the vendor’s platform.
More interestingly, most (11 of the 17 vendors responding to that specific question) cannot even use anonymized customer data, and almost all (16 of the 17) cannot make money from letting third parties download customer data.
I discussed these — and other — results in a recent webinar, and Forrester has just published a report exploring the topic in more detail: “Industrial IoT Platform Vendors Aren’t Stealing Their Customers’ Data.”
It’s important, of course, to recognize the nuance and complexity behind these simple statements. The report describes three broad scenarios in which data might be used and explores issues to consider in each case. These scenarios are:
- Machine makers, collecting performance data to improve their machines. By 2020, every machine that Robert Bosch makes will be able to gather data about its performance and transmit that back to a secure Bosch data center. Competitors are making progress toward their own similar targets. This will give industrial firms such as ABB, Bosch, GE, Rockwell Automation, and Siemens invaluable insight into how their machines really perform outside the lab. These and other vendors normally consider this data to be commercially sensitive, and, at least initially, it will only be used by engineers working to improve future releases of a product.
- Platform customers, aggregating machine, system, and process data. ENGIE operates in 70 countries and gathers data on energy production, transmission, and consumption to balance supply and demand and to optimize asset utilization and maintenance. Data from smart meters, pumps, turbines, and other machines made by a range of vendors is encoded in a plethora of data formats and transmitted using a variety of communications protocols. Much of the data is commercially sensitive and would be of great interest to competitors. ENGIE’s chosen IoT software platform is responsible for aggregating all this data, harmonizing it, storing it securely, and making it available for ENGIE’s use.
- Service providers, offering new business models powered by IoT. Kaeser Compressors shifted from selling compressed air machines to renting compressed air — and the associated machines, parts, and support — by the liter. These service-based business models are becoming increasingly interesting, and all of them require access to data. To deliver and install consumables before they run out, a service provider needs visibility of supply levels and anticipated demand. To optimize routing at a logistics company, a service provider needs visibility of available trucks, drivers, and packages. For these and similar business models to work, the service provider and recipient must be willing and able to share data.