Internet of Things: Everything is Connected... Or Soon Will Be

White Papers | September, 2015

By David Madden
And Diane Coletti

In the past 20 years, the Internet of Things (IoT)—essentially, smart devices’ ability to intelligently connect to the Internet via embedded sensors—has radically changed the way many organizations do business.

Machines, ranging from automobiles to heart monitoring implants and home thermostats, can now easily deliver information about a user’s intent, habits and behavior to manufacturers, medical personnel, retailers and a variety of other end users.

The impact on both business-to-business (B2B) and business-to-consumer (B2C) companies has already been significant—and will become even more substantial in the next five years as IoT helps highlight additional purchasing, health and lifestyle patterns.

The Internet of Things’ impact on the talent market is already being shaped and will be no less profound. As new, IoT-related positions emerge, employers trying to fully utilize the developing technology will need to answer several pressing questions.

Companies will need to determine how to develop leaders’ and professionals’ skills in this developing capability, as well as what new leadership and professional roles will be required to leverage IoT into customer, employee and supplier-enabled applications and insights. Emerging IoT-associated technical and strategic issues are already impacting what organizations must do in order to:

  • Add to a growing list of skills to their business needs

  • Develop candidates with relevant experience

  • Attract candidates in a competitive talent environment

  • Retain high performers with the appropriate skills in a competitive talent environment

This white paper will discuss the key factors that inspired IoT’s growth; identify specific skills that IoT professionals need to possess to succeed; pinpoint ways employers can access IoT talent in the current job market; and clarify how IoT stands to affect both the technological world and industry employment for decades to come.

From Cosmetics to Connectivity

British brand manager Kevin Ashton first referred to sensor connectivity capabilities as the Internet of Things, effectively coining the term, in the late 1990s.1

He came up with the idea of adding a microchip—commonly used at the time in loyalty cards, a tool now referred to as radio frequency identification (RFID)—to lipstick packaging to wirelessly transmit each item’s location2.

Ashton felt identifying where a certain shade was selling well might help stores determine if a particular product needed to be restocked. He was correct; and the practice caught on. After the newly formed Auto-ID Center conducted significant research and Ashton completed a series of corporate presentations, by 2010, an increasing number of companies, according to Newsweek, had begun to use smart packaging to track items using RFID technology.

Companies soon learned that the Internet of Things ideal could do more than just keep products on shelves. Items embedded with sensors that allow their movement to be tracked can, for example, also provide beneficial building-related interactive data, helping officials measure environmental and other conditions as they occur.

Organizations now use transmitted data to help manage traffic and improve baseball players’ performance. Firefighters use the technology in search-and-rescue operations. And Kevin Ashton is the reason you can check to see if jeans are available in your size at your local Gap store, or confirm the nearest Best Buy has the tablet you want to buy later today in stock.

Benefitfocus is a premier provider of hosted and cloud-based employer and insurer benefits portals, web applications and services—and is thethird-party technology and service provider to these employers and insurers. Users and “customers’” are directed to their employer or insurer portal or application, branded as the employer or insurer, and developed/operated by Benefitfocus. As such, they are on the cutting edge of both technology and revenue generation with the Internet of Things—it is their business model and value proposition.

From the perspective of Benefitfocus’ Chief Architect, Fred Robinson: “IoT is about collecting more data than ever before.”  “Now this data can bring so much more intelligence to a business about customer behaviors across so many industries. It’s not just what [item] you are buying, but why you are making the choices you’re making.”

Benefitfocus’ success in capturing the value of IoT culminated with its IPO in fall 2014 and is as much about talent to execute as technology to enable.

In assessing Benefitfocus’ perspective and similar value creation stories, it is clear that a few key factors have helped fuel IoT’s growth.

  • The cost of equipment and hardware has dramatically declined.

  • The advent of cloud computing and increase in connectivity speed has made applications available and serviceable on a range of platforms, including phones and touchpad devices.

  • The innovation in mobile platforms and capacity to serve has been revolutionary, not evolutionary.

  • The ability to activate and monitor sensor and data technologies in sophisticated medical and advanced manufacturing technologies to gather, assess and act on data has improved exponentially.

John O’Connell, board director and advisor to Open Sky Corporation and TUV Rheinland, states that the IoT evolution, particularly in regard to the development of  mobile devices, is now one of the four major tech pinnacles—along with social media, analytics and cloud storage—that have helped support IoT’s growth. “All those things coming together that didn’t exist before … [have provided] all kinds of opportunities to connect things today and make data more available,” O’Connell says.

Wearable devices, in particular, have taken off in recent years—and are expected to experience the biggest amount of short-term growth in the near future. Thirteen percent of consumers said they planned to purchase wearable fitness devices within 12 months, and 33 percent planned to do so within the next five years.3

Smart watches are the second most popular wearable device; 5 percent of consumers plan to purchase one in the next year, and 23 percent expect to buy one in the next five years.

Joint project work has also helped IoT use become more widespread. Companies have frequently sought out partnerships and/or acquisitions to find new ways to implement the technology, collectively creating application program interfaces, new platforms and other items.

Partnerships tend to be the more popular choice: Approximately 60 percent of organizations are using them to develop IoT solutions.4 Acquisitions, on the other hand, comprised just 10 percent of company strategies.

In general, IoT use varies by industry. Industrial manufacturing and medical device companies take the lead, according to Capgemini Consulting. Energy and mining organizations are also investing heavily in IoT. Thirty-three percent use sensor technology to improve workplace safety.5

Currently, 25 percent of companies in the industrial sector have invested in monitoring and optimizing tasks across control points, and 17 percent of IT firms have invested in innovations to measure performance and control maintenance.

Location also appears to play a part. Companies in Asia, for example, are more likely to have invested in sensors, followed closely by Latin America.

Trent Johnson, CEO of Hookflash, a leading technology enablement platform developer, has created real-time voice over Internet (VoIP) and video-over-Internet solutions, partnered with large established players such as Microsoft.

“Today, there remains a high percentage of people in Corporate America who have no sense of IoT,” Johnsen says. “There is a digital divide between generations. As the technology progresses and IoT is more engrained, technology is compressing business cycles, and things are getting done more rapidly—[but a] high percentage of North American leadership doesn’t have knowledge or an understanding of its impact.

IoT Advantages

IoT’s increased popularity has undoubtedly been influenced by the fact the technology presents a number of profit growth opportunities.

Tracking real-time data from multiple sources can help companies better understand customer use patterns to improve service levels and strengthen their supply chain. Gaining insight into product and customer lifecycles can also help organizations enter new markets and create more targeted products.

IoT value-enhancing strategies can include:

  • Cost control—Organizations can develop cost-reduction and risk management strategies that are based on a comprehensive understanding of customer and business partner interaction data. “Business gains value in the operations spend side of the equation—i.e. sensors and data—to understand processes better and streamline processes,” O’Connell says. “[They can] anticipate problems before they happen.”

  • Faster reactions to market conditions—Enhanced product knowledge can help companies immediately respond to regional customer needs by shifting merchandise according to local buying patterns, which helps manufacturers and retailers manage inventory more efficiently. IoT has also fueled innovation and growth. Social media, smart mobile devices and other tech products that premiered in the past decade have also helped many organizations boost revenue, according to O’Connell, through gains that include “new products … new capabilities of products … [and a] new kind of value.”

  • Personalized promotional opportunities—Organizations can predict (and potentially influence) customer behavior by cross-referencing data from different sources, using interactive visualization and other tools to customize available offers.

  • Safer data use and storage—IoT technology can help companies provide increased security that’s both preventive and responsive, strengthening data systems and providing an increased comfort level for consumers, clients and business partners. Due to HIPPA and other often industry-specific regulations, security isn’t just a best practice—it can be a legal necessity. “The data is key,” O’Connell says. “In highly regulated sectors, such as financial services [and] healthcare, [there is a lot] of consumer information and data; for companies in these areas, security needs to be [a] top priority.”

A number of organizations have already launched inventive initiatives to utilize IoT capabilities. Technology and service provider Bosch, for example, founded the Bosch Internet of Things and Services Lab in 2012 in collaboration with the University of St. Gallen.

Global professional services Towers Watson and mobile communications company Vodafone partnered with insurance company AIG Europe Limited to run a pilot6 for a usage-based insurance in-vehicle telematics device, designed to help insurers gather detailed per-second data on driving performance.

GE Digital, headquartered in San Ramon, California, offers services ranging from product strategy, pricing advisories and marketing to user research, architecture design and business modeling. GE Digital relies on its extensive experience in sensors and controllers, modeling analytics and software development to deliver on its vision for the industrial Internet.

GE7 views the IoT market as having three distinct segments: the consumer segment, driven primarily by value propositions focused on the connected lifestyle; the commercial segment, driven primarily by value propositions around customer interaction or employee efficiency; and the industrial segment, driven primarily by value propositions around optimizing assets and operations.

The global corporation sees the cornerstone of the IoT market as software-defined machines—which can be easily and securely connected to the Internet; embed apps and analytics into machines and the cloud; and change and update machine and device capabilities without changing hardware. Software-defined machines can also deliver intelligence to users, providing continuously better outcomes.

Like several other organizations, GE has also launched an IoT-related initiative. The corporation forged an IoT alliance with Cisco and Intel in 2014 that involves its Predix platform, software designed to add intelligence to various IoT end points. The agreements will allow Cisco and Intel to create Predix-ready devices that provide embedded intelligence resources and enhanced asset performance and operational data collection and analysis.

An Ever-Expanding Market

Although the Internet of Things has opened up a vast number of opportunities for retailers, analysts and innumerable organizations, the concept is, in many ways, still novel.

Consumers’ general lack of awareness and value perception has been IoT’s primary challenge; most consumers—87 percent, according to Accenture Interactive’s digital agency Acquity Group—haven’t ever heard of the term. Forty percent say they haven’t bought wearable tech devices because they didn’t know the items existed.

As McKinsey & Company8 notes, widespread acceptance will take time. IoT’s popularity, though, is growing.

Tech research provider Gartner9 predicts IoT product and service needs will produce more than $300 billion in incremental revenue by 2020; Internet-connected devices will generate more than $8 trillion in annual sales, according to the International Data Corporation10.

Other industry members’ estimates—including former Cisco CEO John Chambers’—are equally positive. Chambers told 2014 International Consumer Electronics Show attendees that the Internet of Things stands to be worth $19 trillion, according to Bloomberg11 —with 50 billion objects connected to the Internet by 2020.

“Some industries are behind,” O’Connell says. “They need to get moving.”

Medical devices, for example, could be connected to doctor’s offices, he says; products like toasters, light switches, and appliances could also utilize IoT sensor-based technology.

“The rule of thumb [I] have heard said: ‘If you have [a] product [that] costs $50 or more, you should be thinking of some kind of sensor on that device,” O’Connell says. “There’s an opportunity to gather data and create value; that is the core of what IoT gives a business.”

The Connectivity Talent Conundrum

As IoT practices continue to grow, corporations will undoubtedly face a number of related challenges—many of which center on a shortage of experienced talent.

Currently, many traditional, product-centric organizations may not be able to fully develop, market and manage IoT services, due in part to a lack of executive-level members who possess significant expertise across all functions.

IoT-related hiring challenges include:

  • An overall lack of candidates: The corporate world has a general deficiency of chief data officers, chief platform architects, chief security architects, data scientists, software architects and related positions. As a result, experienced professionals with a deep understanding of enterprise software—specifically SaaS implementation—are in high demand, making it potentially more difficult to recruit professionals for IoT positions.  “By its nature, IoT is cross-connecting companies and technologies,” Johnsen says. “The people who will be making this happen are software developers—[the] talent demand [is escalating] across all industries for [them].” Professionals who possess strong data interpretation skills will also be in high demand, according to Fred Robinson. “From a technology standpoint, [candidates] need to have talents in how [to] collect data, mine data [and] build tools to help [users] make decisions,” he says.

  • Candidates are looking for innovative, unique employment opportunities: Different industries are truly competing for IoT candidates in today’s job marketplace. Candidates, in many cases, tend to gravitate toward “sexier” industries—such as technology, versus industrial technology, which can provide more urban locations; mentors with name recognition and the chance to work on flashy, cutting-edge projects. Other organizations also are often able to offer more lucrative compensation packages, making it harder for industrial technology companies to compete for new hires.

  • Difficulty finding professionals who can take a big-picture approach: In addition to tech knowledge and skills, to succeed, IoT candidates should also be able to provide a forward-thinking outlook, which can be a crucial part of anticipating, preparing for and fully utilizing future IoT applications. The IoT talent pool, according to O’Connell, needs to include “people who can assess where the trends are … and [who are] familiar with trend modeling.” CISOs, in particular, need to be able to know where threats exist, according to O’Connell. “[They need to] look at products, process and where the risks are,” he says. “[There are] not enough of those people.”

  • IoT can often be a new concept for customers—and sales teams: To sell IoT services and solutions, sales representatives and managers need to be able to articulate the value that the new, potentially unfamiliar IoT technology offers.12 Sales representatives need to be able to explain sometimes complex product and service benefits to convince customers, who may be largely unfamiliar with the IoT world, that what they’re selling will provide a significant productivity and efficiency pay-off.

  • An IoT focus often extends beyond the IT and sales departments: Because organizations need to distinguish themselves in the IoT market13, IoT-specific promotional efforts will help ensure product and services’ success. A company’s marketing department may need to either add IoT-specific positions or incorporate IoT product and service promotion into current marketing roles. Similarly, O’Connell says, it can help to have companies perform security assessments at the board level. “It’s so important to IoT [to have a] commitment from the top level down,” he says. “And [to] make sure [you have the] resources to do it [is] critical.”  

  •  IoT Professionals need to be able to address safety issues: Senior management’s concerns about a data breach at U.S. companies rose dramatically in the past year; more than half now rank their concern level as extremely high.14 Professionals need to understand the technology behind IoT products and services and be able to accurately describe how they work to assure customers data will remain private. “Security assessments are a big part of IoT,” O’Connell says. “There is security and infrastructure … design and architecture built in the front end of the design … and processes built into the security. There’s a lot of security need in the marketplace.”

Until IoT roles become more prevalent for positions that involve a well-defined career path, companies may need to take a creative approach to finding talent.

They may need, for example, to consider tapping talent from government agencies, educational institutions and foundations who were early supporters of IoT technology.

Employees in those industries may possess IT development and implementation skills, security knowledge and an ability to clearly convey how systems and solutions work. (U.S. military planners, for example, have expressed support for IoT use in uniforms, national security efforts, weapons systems and other areas.15, according to global investment bank Woodside Capital Partners’ 2015 report on the Internet of Things.)

Because their employees often possess a thorough knowledge of innovative technology and implementation, large technology vendors may be another relevant recruitment source.

The IoT talent market is still emerging, and IoT investment and development is more prevalent in certain regions, such as Asia and Latin America; as a result, global recruitment and relocation may also be necessary—or, at the very least, a helpful tool in the IoT recruitment process.

“More and more companies will need to hire virtually,” Johnsen says. “Hire from where they come from, not [who is close] to your office.”

To retain valued IoT hires, companies will need to provide compelling work assignments to keep software developers engaged, according to Johnsen.

“Their motivation is not the same as senior people in traditional industries,” he says. “I would list major motivators as: who they are working with—is it someone recognized as a credible manager or developer? [Are they] working on cool stuff? Are they [doing] new, innovative, important work?”


IoT is still essentially in its earliest stages. Devices with embedded, communicative sensors—ranging from medically related micro cameras to instruments that tally how long you pause in front of a store display to items that haven’t been introduced yet—and the valuable data they produce stand to make even more revolutionary changes in the way businesses, consumers, employees, suppliers and other entities interact.

As IoT technology matures and becomes increasingly mainstream, a corresponding growth in talent needs will likely follow suit. The IoT talent pool—which can include a number of positions, including database programmers, embedded systems engineers, product leaders, and IoT strategic business development managers—will likely change to incorporate new skills and roles as IoT practices develop.

Today, however, many companies are facing a large technology talent supply gap. It’s an issue they need to address.

“Companies can’t wait,” O’Connell from Open Sky says. “They need to put actions in place to support IoT of their particular industry [now].”

The organizations that amass talent now in preparation for future IoT needs will be positioned at the forefront of the dramatically evolving business landscape.

Proactively establishing an IoT team—even if a company is just beginning to fully acknowledge Internet of Things effect—can help ensure the organization’s future success. Implementing a strong IoT presence within a company can have a number of positive effects—including increased market presence; improved productivity and, potentially, the ability to grow profits to new, previously unrecognized levels.

“IoT is an application of technology wave; it is not a business or a ‘market sector,’ from Trent Johnsen’s perspective. “IoT [is] now connecting all these people and computers and software, and [the question is] how can we build businesses with that; improve our lives [and] beat our competitors.”

BenefitFocus, an innovator in benefit management for employees and insurers, has changed its entire product to focus on the new, more shopper-focused sales environment.

Chief Architect Fred Robinson describes the legacy process as “ payers would meet with employers once a year to present insurance program options for their employees—after the payer had assessed the data about employees’ insurance needs and usage. 

Thanks to customer behavior-related data collection, made possible by IoT technology, employers can now gather information about their employees’ preferences on a regular basis—and use it to provide better service.”

“Employers now have access to data and can go directly to employees,” Robinson says. “IoT is all about data and information; consumers [are] in control of this—[and] they want their experience to be easier.”

The implications on serving the market, understanding customer behavior, and how to reach and serve the customer with IoT are coming into focus across markets from technology to healthcare to advanced manufacturing to energy applications to industrial products.

We believe that winners in IoT value creation will understand how to identify, capture, and retain talent in the IoT value chain and upskill existing leaders and team members in the IoT capabilities required for success in an ever changing landscape that is applicable to their unique business and markets.