Skip to content
Microsoft Industry Blogs

samsungIn my last blog, I talked about how our hyper-connected world has changed how manufacturing employees need and expect to work. Now I want to focus on the consumer side of the Internet of Things (IoT) and the Smart Home, and what that means for manufacturers.

For Consumer IoT, we are at an inflection point with fundamentals falling into place for growth. Key among these are pervasive connectivity, drop in component prices, and consumer adoption of IoT devices. Acquity Group’s 2014 Internet of Things Study reports that consumer adoption of network connected technology is on the rise, with 69 percent of consumers planning to buy an in-home device in the next five years. By 2016, wearable device adoption rates are expected to reach 28%. According to IDC, by 2020, every person in the world will have an average of 6.58 connected devices.

The IoT Evolution

While many talk about IoT as a revolution, it is more like an evolution. Converging at the home gateway, smart products are being connected to generate new insights, efficiencies delivering customer value, and in turn, generating significant business opportunities.

IoT_art The projected economic benefits of this evolution are enormous. Gartner predicts by 2020, more than 80% of the IoT supplier revenue will be derived from services. That would also include higher tiers of umbrella services and analytics with multiple products (one-to-many), leading to significant economic value-add.

Transformation Opportunities

Connected Consumer Devices are identified by three core elements:

• A physical device with smart components that amplify the value of the product itself.
• Connectivity extending the capability and value of the smart device enabling it to exist outside the device itself.
• Cloud platform for managing the device and delivering value to the consumer.

The evolution of a Connected Consumer Device also means that products will offer exponentially expanding opportunities for new functionality, reliability, and greater product utilization beyond traditional product boundaries. For manufacturers, this means transforming their business to create and deliver new consumer experiences in order to remain relevant and competitive in the market. Beyond designing and manufacturing new Connected Consumer Devices, we see this transformation evolving in few key areas:

• Developing new business models in delivering integrated products, services, and support as a differentiator.
• Creating new revenue streams by utilizing data and analytics to create new umbrella services
• Building business agility with a scalable secure infrastructure spanning global reach for modern business.
• Utilizing a closed-loop collaborative platform for customer, partner, and supplier engagement; management; and digital marketing.

One great example of Connected Consumer Devices is Samsung Electronics and their use of Microsoft Azure to provide Smart TV services to 120 countries, reducing hardware and maintenance cost by 80% and increasing reliability.

samsungAn example of IoT innovation in the wearables space is Microsoft’s recently released Band and Microsoft Health platform. Microsoft Health brings devices and services together to allow consumers to combine the information they collect and use the power of the cloud to turn that data in to something more valuable.




health-intelligence-engine-640x480-e1414697716367 Microsoft also contributes to AllJoyn, the world’s largest open source project for IoT. The AllJoyn framework defines a common way for devices and apps to communicate with one another, ushering a new wave of interoperable devices to make IoT a reality.

The wave of Connected Consumer Devices is already changing how value is created for consumers and how companies are transforming their competitive landscape, as well as driving impact on the economy itself. Ultimately, it is all about providing a consumer experience that delivers significant benefit – and the opportunities for manufacturers to deliver on this are endless. We are just beginning the journey.