Welcome to the first of my IoT Nuggets series. In this series of blogs I will discuss IoT from different angles, The Business and Strategy side and also the Technical side. I will discuss IoT from a VMware perspective, focusing on Pulse IoT and VMware partnerships and I will also be discussing other IoT solutions that are interesting. So lets get started with Business Strategic Considerations. A very important factor when getting into IoT is utilizing tools that are available to you. PESTEL is a tool we will discuss to assist with this.

In order to maintain and drive a companies strategic relevance, a PESTEL can be extremely useful. What is PESTEL? The letters stand for Political, Environmental, Social, Technological, Economic and Legal. Basically it helps analyse external factors that could affect your IoT strategy. (This goes for many other types of strategy also) Utilizing the evidence provided from a PESTEL analysis will assist your company to develop correct strategies, hence keeping your company sustainable and competitive.

Lets look at an example of 2 of these factors, Technological and Social external factors.
Table 1 provides a snapshot of what successful companies demand. Research suggests that 50-90% of actions/projects fail to achieve their goals.

1 Sustainability
2 Better return on capital
3 Better quality and productivity
4 Increase market share/new markets
5 Reduced costs
6 Lower lead times
7 Increased Profitability

Table 1: What successful companies demand.

These days business competition feels much like a boxing arena, where punches come from different directions, strategies change blow by blow, and another challenger is always waiting to take you on. Because of this, understanding what you really want from an IoT perspective is imperative.

Take for example a company that want to use automated vehicles, e.g. Articulated self driving trucks. Perhaps they plan to do a lot of their testing between France and the U.K. Their planning may have been going perfectly, Until the B word came up. Yes, Brexit. Now what happens to that companies testing strategy? From a PESTEL analysis the question must be asked, did they consider Political issues, Social, Economic factors? Fuel prices will change, there may be strikes at borders.

Advances in technology are constant and have become part of people’s DNA. In Table 2, I have listed external factors for technologies along with Opportunities and Risks for those technologies. This analysis should help a companies strategy to become more calculated. When discussing technology its important to remember that “If you ignore it or get it wrong, then anything from your job to your entire organization could become vulnerable to rivals who get it right.”


Technological Opportunity Risk
5G IoT, Healthcare, Industrial, Automotive and consumer. Is your company a household name? Competitors such as Tesla, IBM, Amazon are market leaders.
Cyber Security Explosive growth, wide platform. Integration challenges, Staff may move to security companies.
Technology getting cheaper If your company can provide solutions at lower costs, you are at an advantage, but perception is important here. Lower profit margin. Cheaper technology lets start-up companies enter tech markets with ease.
Social Media Twitter, YouTube, Your company can request customers to Beta test via media. Linkedin, Glassdoor, Twitter.
Unknown products Create products customers don’t know they want. Customers may have no interest.

Table 2: Technological factors affecting IT companies

There are 2 schools of thought on 5G. One is that it will make it easier to centrally consolidate and process data. The other is that it could actually have the benefit of leading to more data in more places. From a Healthcare perspective this could be a big win. Also consider improved performance accessing data or using robotics in operating theaters.

Cyber Security
Cyber Security is another emerging opportunity, it poses a massive threat and opportunity to IoT companies and customers. Many companies have integrated cyber security solutions, however, it needs to be tried and tested.

Social factors
Social factors impact macro-environments and have proven to be a key player in companies and industries failures and successes. Evidence is Nokia and Apple. (Nokia thought they knew customer’s needs, but Apple provided what the customer wanted. Nokia failed to monitor the shift in customer’s expectations and market trends) Demographics are extremely important when considering an IoT strategy.
Companies don’t build smart cities in remote third world countries, why? Because smart cities will be designed for countries that can afford these initial investments. Consider your target market a geography.

The key areas of interest from a social perspective are discussed below.

Attitudes towards leisure

Customer expectations have never been higher, An opportunity with IoT is that customer’s want self-driving vehicles, smart homes and more. The risk is that these expectations are continuously growing and sometimes become unrealistic.

In IoT, Companies can focus on more than just home sensors. Focus on Healthcare, Industrial factories, automotive and more. Decide whether you want to specialize in one industry or market segment or keep the scope broad and focus on arenas, not industries. Staff need to be assigned to gather and observe data, then test their theories and business models.

Don’t be afraid to fail, but fail fast, “fall in love with the problem you are trying to solve” rather than with the solution.

Understand rate of change for customers.  Customers may not be able to move at the same rate and embrace your companies IoT strategy, e.g. A train company may be satisfied inspecting trains manually instead of using machine learning to perform external inspection. Companies may want to use machine learning with a database containing thousands of photos of train defects, as a train passes a camera on a track, the cameras will search for those defects on the train in a microsecond and report to command centre if there is an issue. But we must make systems more affordable which will provide incentives to the said train company to use the camera system and machine learning.

Finally, invest in strategy and innovation, and note that just because a strategy was previously successful, doesn’t mean that the same strategy will be successful for new projects, Companies must experiment, learn and test critical assumptions before investing further.

The future is bright