The integration of Internet of Things (IoT) with the Software as a Service (SaaS) model is revolutionizing the way technology companies deliver value to their clients. SaaS companies are adding IoT devices to their product portfolios to offer smarter, more precise, and more personalized solutions across different sectors of the economy. Becoming one of the main technologies of the 21st century related to digital transformation, it is already present in the daily life of companies in different sectors of the economy, revolutionizing the way companies deliver value to their clients. This article explores how IoT devices can boost SaaS platforms, increasing the product’s added value, and what the challenges are for its large-scale implementation.
The Synergy between SaaS and IoT
Internet of Things (IoT) are physical devices connected to the internet that can send/receive commands or act as sensors, collecting and sending data to other places. The most practical examples include sensors for industrial equipment, sensors for spaces, and implantable medical devices.
Software as a Service (SaaS) is a software distribution model in which applications are hosted in the cloud and made available to clients via the web. This model eliminates the need for local system maintenance and makes the product scalable.
The combination of both technologies in a single platform creates a new level of automation for companies. By completely eliminating human action from data collection, it is possible to offer precision, speed, and consistency in the process, and automatically send this data to the software, which performs the necessary analyses in real time. This provides valuable insights, enabling automatic actions at a lower cost and in a much more precise and secure way, preventing failures, reducing costs, and improving the customer experience.
The IoT Landscape in Brazil
Brazil is one of the world leaders in the adoption of IoT technologies, with constant private investment in the market and even government incentives.
The National Internet of Things Plan established in 2019 by the Federal Government was one of the main drivers of the technology’s growth in the country. It instituted free competition, free flow of data, and established the security and privacy guidelines for IoT in the national market, fostering investment in strategic sectors such as healthcare, agriculture, industries, and smart cities. IoT implementation is expected to grow almost 20% per year in Brazil, going from 300 million connected devices in 2022 to more than 700 million in 2027 (Frost & Sullivan).
In a survey conducted by IoT Analytics, in May 2023 there were more than 16.7 billion connected IoT devices, with an expectation of reaching more than 29.7 billion by 2027.
One of the main drivers of this growth is the advance of investments in information and operational technology that are driving the next industrial revolution. The reduction in the cost of data processing, storage, and hardware resulting from the proliferation of these technologies in the market makes data collection possible for more players and consequently increases these companies’ investment capacity in digital transformation.
Furthermore, the creation of new automation software for new industries brings the internet closer to segments that were previously thought could not be automated with hardware, opening doors for automation via IoT.
The role of IoT in the transformation of SaaS companies
With the expansion of SaaS and the reduction in processing costs (resulting from cloud computing) in the Brazilian market, a large part of the data management and analysis tasks have been automated; however, there is still a challenge in collecting and ensuring the accuracy of this information.
We live in a country where 84.3% of the population has internet access (Data Reportal 2023) and where external activities still represent a relevant part of GDP, such as services, agriculture, industry, and mining. In this context, IoT becomes an essential piece of companies’ digital transformation by automating the collection of this information and bringing more accurate data for more agile and intelligent decision-making, whether in the countryside or in the city.
The integration of SaaS platforms with IoT devices offers significant benefits compared to the isolated use of each technology:
· Using only a SaaS solution: the analysis information is inserted manually by human operators, which can generate errors, inaccuracies, delays, and may not even be collected due to difficulties (lack of tools or mobility);
· Using only IoT devices: the volume of information can be so large that it makes manual analysis very difficult or costly, and the interpretation of this data may require several cross-references for it to become relevant.
Digital transformation cannot be carried out with software alone; hardware is also a very important piece because it automates the operations that algorithms cannot, outside the lines of code. With data collected in a precise and constant way, sent in an organized manner for analysis and processing in software, companies can reduce operational costs, absorb a larger amount of data, and gain advantages by having valuable insights that were previously not perceived without the joint action of software and hardware. Furthermore, with the advance of AI (Artificial Intelligence) solutions, the analysis and decision-making itself can be carried out, thus completing the cycle of complete digital transformation.
IoT Applications by SaaS Companies
In almost all industries in the market there is room for IoT applications, and some companies are already adopting the hybrid model to differentiate themselves from their competitors and increase the value they offer to their clients:
Remote Monitoring and Predictive Maintenance
Industry 4.0: SaaS companies are offering platforms that use IoT sensors to monitor the performance of industrial machines and equipment in real time, which allows predictive maintenance and the identification of problems before they cause operational failures. This reduces risks, maintenance costs, and downtime.
Example: Tractian, a startup valued at R$ 1 billion, has an IoT sensor for real-time vibration and temperature monitoring for more than 30 categories of light and heavy machinery. The solution has native integration with the company’s software, which creates accurate dashboards and reports of its clients’ machines, creating a truly precise prediction solution.
Connected Healthcare
Patient and Environment Monitoring: SaaS companies are developing platforms that connect to IoT devices, such as wearables and sensors, to monitor patients’ health in real time and check the temperature of machines and medications inside hospitals. This allows healthcare professionals to treat their patients more quickly and helps hospitals reduce losses of supplies caused by operational failures in machines and environments.
Example: According to the Financial Oversight and Control Commission, since 2019, more than R$ 2.2 billion in hospital supplies purchased (in the public network alone) have been wasted, going to the trash or being incinerated. To help solve this problem, Nexxto developed a temperature and humidity monitoring sensor for hospital products and environments. The solution allows the standardization of storage processes and real-time incident management, optimizing the entire cold chain of hospitals, which, according to the company, reduces up to 90% of costs for healthcare institutions with waste.
Logistics and Supply Chain
Asset Tracking: SaaS platforms connect to thousands of trackers on trucks and cargo to monitor in real time the location, status, and route of goods. This increases visibility, improves supply chain efficiency, and provides greater security, preventing theft and robbery.
Example: Infleet, a startup that provides technology for fleet management, received a Venture Capital fund investment to develop AI and IoT solutions to improve its monitoring, maintenance, and refueling solutions for transport vehicles and cargo.
Agriculture
Agriculture 4.0: SaaS companies are using IoT sensors to monitor soil conditions, climate, and crop growth, as well as the health and location of their animals. Smart drones are also being used to monitor planting areas and land areas. In external activities with difficult access and lack of signal, IoT devices become essential to provide fast and accurate information to farmers and landowners.
Example: Climate FieldView, a software company created by Bayer to serve agribusiness, uses IoT sensors to collect data from both machines and the field, creating intelligent maps and reports for the rural producer.
IoT Transformation: How Artificial Intelligence and Connectivity Are Transforming the Future of Companies
Artificial Intelligence (AI): from the disruption that AI has brought in recent years, changing the way companies analyze their data, the concept of Artificial Intelligence of Things (AIoT) is born. With data collection already automated, now decision-making and action are also carried out without human assistance, allowing advanced management and exponential learning for corporations.
Connectivity: as new and better telecommunication technologies are made available to the market, the action capacity of an IoT device is also raised. With faster and greater-reach connections, new functionalities are unlocked and allowed to be integrated. With the arrival of 5G, which increases the speed and processing capacity for collected data, more companies will be able to onboard their products through IoT.
Edge Computing: allows the processing of information within the devices themselves, which increases the productivity and security of information sharing. This allows repairs to equipment, when necessary, to be carried out individually, without the need to stop the central server that performs the data processing.
Smart Cities: a concept already widely disseminated in countries like the USA, IoT in city management is a reality that brings convenience to people’s lives and has been used to measure traffic, noise, energy consumption, and even air composition. There is also room for banking and fintech solutions that can benefit from this movement, applying digital payment technologies in public transport, for example, as is already being applied in Europe in countries such as Spain.
Challenges to Overcome
1. Security and Privacy: The deployment of IoT devices increases the risk of cyberattacks, in which each connected device can become a new access door for intruders, enabling data theft. Depending on the function of the device, information considered sensitive and private may be collected. It is essential that the necessary security measures be implemented in each device so that such attacks do not occur, such as robust encryption, multi-factor authentication, and other security protocols to ensure the integrity of the device and the information.
2. Connectivity: Brazil is a country with several infrastructure challenges, especially connectivity. For IoT to be fully utilized, a robust network infrastructure with high speed and reach is necessary so that data is transmitted effectively. The expansion of 5G is a crucial step to ensure the implementation of IoT in areas that are today considered remote, in addition to attracting private investment that can leverage the development of the telecommunications sector, and with it, IoT.
3. Cost of Electronic Components: The vast majority of IoT components used today are imported, meaning that exchange rate variation directly affects the acquisition cost of this equipment and the expansion of the technology in the market. Because we live in a country with constant geopolitical turbulence and a currency that is not very stable against the global economy, we are constantly exposed to price variations of this equipment and even supply shortages.
4. Integration and Maintenance: The integration of IoT devices with software can be costly, given the variety of devices available in the market, requires time, and depends on the availability of development protocols. Furthermore, there is a low supply of qualified professionals to operate and perform maintenance on this equipment, which further increases the cost of using them.
Conclusion
The integration of IoT with SaaS offers transformative benefits for all sectors of the economy, but there are still significant challenges to overcome. Critical issues such as security, connectivity, and cost need to be resolved for the technology to be fully utilized.
Investing in the advancement and development of IoT is crucial to unlocking its potential. Companies that adopt these technologies are positioned to gain operational efficiency and create new business opportunities. However, data security and privacy must be priorities to avoid abuses and ensure user trust.
Bruce Sinclair, IoT expert and author of the book “IoT Inc: How Your Company Can Use the Internet of Things to Win in the Outcome Economy”, emphasizes that “IoT is no longer a new trend or fad. It is a reality that imposes itself and, sooner or later, will reach your business or sector.” He emphasizes the importance of robust regulations and investments in security to protect data and user privacy.
As IoT adoption grows, the present and future of the technology become increasingly interconnected. Companies that adapt to these changes will reap the benefits of innovation and efficiency. However, it is essential that industry and regulators work together to overcome the challenges, ensuring a safe and reliable future for all.
The current moment of IoT is both an opportunity and a challenge. To truly harness its potential, a commitment to security, responsibility, and constant innovation is necessary. The future of the economy and technology will be increasingly shaped by IoT, with new possibilities emerging as solutions become more integrated and intelligent.
💬 Author: Luca Marmo