Why Cloud Is The Foundation Of The Internet Of Things

Ashok Munirathinam

In the quest to transform business for the digital age, the Internet of Things (IoT) is one of the most important components of your IT infrastructure.

Many experts have labeled IoT as the single biggest technical innovation to hit the world in decades, with the integration of multiple datasets running across the network enabling a huge spectrum of business functionalities. The possibilities are limitless, from helping society revolutionize farming methods to satisfy the demands of rising populations, to increasing energy efficiency to build sustainable environments.

But we need to be honest. IoT deployments are not always simple.

The technology represents completely new ways of working, changing not just what you deliver as a business but how you deliver it. They require financial investment, something not always easy to secure. And IT teams need to learn to implement and configure them.

Considering these challenges, it’s easy to understand why adoption of the technology is still slow. In Southeast Asia, only eight percent of organizations have implemented IoT solutions, while many companies are still trying to understand how it will benefit their business.

There’s no doubt IoT adoption and maturity will accelerate over the next few years – evidenced by the multiple studies highlighting increasing business investment, such as Boston Consulting Group which predicts $267 billion will be spent on IoT technologies by 2020 – meaning the faster you get on the front foot, the sooner you get ahead of the competition.

Creating a single business network

Developing a successful IoT offering means moving core business applications into a single cloud platform. Fundamentally, it’s migrating your business network and applications to a secure online environment.

Hosting multiple critical business applications in a single cloud environment allows your business to effectively share and integrate data captured by individual applications and sensors in real-time. You can easily push upgrades out remotely to all sites, scaling performance to individual needs, automating processes based on insights, and testing new functionalities aimed at improving user experiences.

Essentially, cloud platforms enable the capabilities that sit behind IoT visions. The Chinese City of Nanjing is one example of an organization reaping the rewards of this approach.

To help the city manage traffic flow, it deployed sensors across the transport network that generated continuous data streams about the status of systems. These insights are shared with the central team and combined with other data – such as travel behavior, fare prices, road conditions, and area accessibility – allowing officials to predict and manage changes throughout the transport networks and keep everything running smoothly.

Overcoming uncertainty

When migrating your business applications to the cloud, you need to decide which ones to move, as well as how to integrate them and share insights. You’ll also need to manage the subsequent impact on security. After all, what use is connecting and collecting data if you’re not able to analyze it and generate fresh insights.

Building your IoT technology on a cloud platform addresses these concerns. First and foremost, it offers a secure network delivering the capabilities you need to protect the insights being captured.

The agility and flexibility of cloud also allow you to safely experiment with sharing data between applications. This test-and-learn feature helps identify previously unknown trends capable of transforming traditional business processes.

Removing the barrier of cost

While cost is often cited as a barrier to IoT adoption, it will become less of a factor as sensor prices continue to fall and the market matures. Internet-enabled connectivity is fast becoming a standard feature for consumer purchases, which opens the possibility of connecting almost anything. This consumerization is why all industries will eventually reap the rewards of IoT. We’re already seeing a range of successful projects around the world in various industries.


One of the largest utility firms in the United States is using IoT to better manage and maintain its network assets. The utility specifically wanted to discover the lifespan of certain components used in the platform and how temperature and load affected performance.

The company developed an intelligent network in the cloud able to combine performance data from multiple sensors placed throughout its energy infrastructures with information from applications detailing load measurements. By analyzing the collective insights, the company is able to better predict when equipment needs replacing and take action accordingly to ensure services don’t fail. The approach has also delivered cost savings, helping to identify energy theft, ensuring network capacity satisfies demand, and improving demand response.


A Sydney-based startup can better monitor the health and wellbeing of its livestock thanks to IoT. A smart ear tag is attached to each member of the herd and captures and transmits data regarding the animals’ health back to a central system in real-time. Farmers analyze this data to determine the health of their livestock, helping them take fast and proactive action when needed.

The early detection of illness in livestock is a key strategic advantage for farmers, especially among cattle with a high mortality rate. Furthermore, it equips them with insights that help them farm sustainably while meeting the demands of rising populations.


To sustain its growth and continually deliver improved customer experiences, a US-based bank needed more transparent and collaborative internal planning processes. The bank also required real-time analytics to make better and faster decisions regarding loan applications.

By moving and connecting multiple applications in the cloud, the bank was able to empower decision-makers with the insights they needed to rapidly make smarter business decisions. The company also automated various planning and budgeting processes so it could focus more resources on meeting the needs of its customers.

Having begun to transform its core business processes with IoT, the bank is now analyzing the insights captured by its intelligent network to identify future growth markets.


A bus company in Japan wanted to improve support for its bus drivers and safety for its passengers An IoT solution was implemented in which sensor vests were developed to collect biometric data from its employees.

Biometric information is collected and processed in a nearby smartphone. With this data, it can detect any red flags, predict how drivers will behave, and if anything goes wrong, stop the vehicle safely. IoT has allowed the company to better understand driver wellbeing and customer safety by averting potentially dangerous incidents before they happen.

IoT will change the world

Across all industries, businesses are struggling to keep pace with demand – be it customer expectations or physical products.

Nowhere is this more evident than from the perspective of sustainability. If the world’s population continues to grow as the United Nations predicts, by 2050 we would need the equivalent of three planets to provide the natural resources needed to sustain current lifestyles.

While the ramifications might not be as extreme in other industries, the principles are the same: businesses need to do more with less, and must also be able to deliver services faster.

This trend shows no signs of slowing down, but IoT will play a crucial role in helping business and government rise to the challenge.

The key to unlocking the real value of the IoT is to consider it an integral part of the entire enterprise and not a standalone technology pillar.

Ashok Munirathinam

About Ashok Munirathinam

Ashok leads the SAP Cloud Platform Business Development for Asia Pacific & Japan. He defines target markets, business plans, and Cloud solution roadmaps for key customers & partners in the Region.