Dropping prices in sensors, microprocessors, and other IoT components are making our physical environment more data-driven. This megatrend is impacting many industries and will continue to drive greater efficiencies and better outcomes. In CoWorkr’s recent white paper, entitled “How Embedded Sensors will Transform Workplace Performance, Employee Engagement, and Facility Management“, we summarize the opportunities that indoor sensors present to real estate professionals and workers.
Improvements in sensors make the internet of things (IoT) solutions a realistic option for many commercial buildings. Even a few years ago, the hardware and implementation costs involved in such an effort would limit deployments to only the largest, most expensive buildings. Our white paper highlights the reasons that it’s now easier to deploy sensors. In particular, hardware cost reductions and ease of implementation are two of the most significant drivers.
As we discuss in our recent white paper, costs for IoT sensors is dropping. Data from GE shows that sensor costs have dropped from $1.30 in 2004 to $0.60 in 2014 and are expected to drop to $0.38 by 2020. Additionally, it is getting easier to use. An interview with James Bailey of Accenture notes: “Our perspective is that cost of both the sensors and devices is approaching free and the size is approaching invisible. Our perspective is literally everything will have IoT technology at some point.“
It also is getting easier to deploy sensors. In addition to smaller form factors, better performance and lower energy demands, sensor architecture have finally gone beyond WiFi to offer fully autonomous connectivity so IoT solutions do not require integration with an organization’s internal networks. Once the data has been sent to the cloud, most modern software vendors provide APIs that enable the data streams to be integrated with existing software products that the organization already uses.
McKinsey has chimed in on this issue and recently published a report on how the internet of things (IoT) will impact a variety of key industrial sectors. In addition to estimating market sizes and value created, McKinsey includes a summary of the enablers and barriers for IoT proliferation. They too estimate a dramatic reduction in hardware costs. Using mobile phone micro-electromechanical systems (MEMS) sensors as an analog, the report highlights a 30–70 percent price drop in the past 5 years. They also highlight the interoperability challenge, claiming that 40 percent of the benefits of IoT has not been realized due to connectivity between systems. As IoT hardware improves and more products are offered, this number will go down. With it, the business case for IoT solutions will become more compelling.
The reduced costs for hardware and easier-to-use integrate nature of the products have positively impacted other familiar industries. Energy management in offices and other buildings is one such example. Energy remains a top-of-mind concern for real estate professionals, but only in the past few years have software-driven solutions, enabled by hardware, addressed these challenges.
Historically, energy management was solved with consultants, who labored to collect various data streams and recommended action every few months to reduce costs. These consultants typically used utility bills because it was too expensive to deploy submeters and collect more granular data. Most of the bills were paper, so digitizing the data was a significant cost. But it had to be done to analyze the data in a scalable way. Once all of this data was digitized and organized, it wasn’t easy to load it into other facility-oriented systems, and even when it was, these solutions didn’t have capabilities that made it useful. Energy management was siloed.
Now the process is more efficient. Interval submeters can be purchased for less than $1,000. Many connect to ethernet or wi-fi (or even a mobile phone network). Moving forward, there will be significant developments in the IoT solutions that can be delivered over 3G and 4G networks. All the major telecommunications companies are investing heavily and starting to promote their IoT capabilities.
The hardware devices themselves are advancing. Some can be installed without an electrician. Moreover, installations can be done without significant disruption to tenants — no power outages and no loud, disruptive noises. Once deployed, the hardware can be integrated with a variety of software solutions that provide a range of capabilities, from simple data dashboards for occupants to analytics-driven solutions that forecast energy and compare to actuals for anomaly detection. Most of the data collected are accessible and can be integrated with other facility systems.
Hardware improvements have driven software innovation in the energy management space. Given that the opportunity to save on workplace, staffing and facility management costs are greater than energy savings, the hardware innovation in indoor sensing will drive a similar revolution.
— Keenan May, Product @ CoWorkr