The Internet of Things (IoT) has a huge opportunity in front of it when it comes to sustainability. We recently launched a new Azure IoT for Sustainability page. About a year and a half ago, I started to have a conversation with our partners about how sensors are at the heart of all the solutions that could be labeled “sustainability solutions.” It occurred to me that we, the IoT solution building community, have been talking about sustainability for a long time without knowing it. Every solution I look at has a return on investment (ROI) that is tangible to existing and traditional business goals, and an ROI that is intangible to the immediate solution unless you see it through a lens of sustainability.
It is ironic that I am about to write a blog post about sustainability solutions by talking about oil. Not fossil based fuel type of “oil,” I’m talking about data. To understand our opportunity today for reaching our environmental sustainability goals with data, I need to take you back in time.
History :: The rise of Big Data 2.0
A few years back the quote du jour was “Data is the new oil.” It was circa 2006 where Big Data 1.0 and cloud computing were on the rise when Clive Humby said this. The crush of data came from us, literally. The humans clicking buttons on web pages. When the “rise of the apps” began, data solution architects had a real struggle learning to deal with all that data let alone to gain insights with it and technologies were invented to fix this problem. Examples of those innovations are real time analytics, recommendation engines powered by graph databases, and new NoSQL data platforms to handle that amount of data.
Now we are in a new age of Big Data that is driven by the Internet of Things (IoT): Big Data 2.0. Ten years ago, I don’t think I had anything “smart” in my house telling me when to do things with sounds besides my cat Thomas. Looking around, now I have a fridge, a dishwasher, a laundry room, and several other devices that are constantly talking to the cloud.
The Thought Exercise :: Tangible ROI vs. Intangible ROI
For the sake of this example, imagine a post covid-19 office “smart” building. A room has a sensor that can sense occupancy and turn the lights on and off. Every time the sensor detects movement in the room, it sends a message to the system saying, “activity in room detected”, and at the same time a message is sent to the light being told to turn on.
The “Tangible Return on Investment (ROI)” for a business, in my mind, are those listed under “More common measures of success” in Figure A. The “Intangible ROI” is the ROI that is not measurable by our standard definition of ROI but affects environmental sustainability goals, as seen in Figure A as “less common measure of success.” In the above example, the installation of the smart lights is reducing the electricity bill. Before the new lights, the electricity bill was $X, and after the installation of said smart lights it is now $Y. On our reporting dashboard we will see the $X - $Y month over month savings.
Now, we can get creative and add a new data source, the meeting scheduling engine. We combine the on/off data of the lights and the electricity bill, and then bring in the meeting data. How many meetings do we have scheduled in rooms that the lights never go on? If we can identify these ‘ghost meetings’, can we get more efficient with office space and potentially move to a smaller physical footprint and thereby pay less rent? This is another Tangible ROI to the bottom line by being efficient with our rent in addition to our new lowered electricity bill. These are probably enough ROI for any business owner to say this solution is worth the price to install it. Especially if one had 100 buildings, and we are talking about a savings in the millions.
So, here is the thought exercise: What is the Intangible ROI in this example?
For this exercise, I will use an analogy to Maslow’s hierarchy of needs in that the base ROI is “my bill is lower, and I save money.” That is a basic need of business to raise revenue by keeping costs down. But what has also happened in doing that is the use of energy has gone down. This is now speaking to other goals the business may have or rolls up to sustainability goals for a city or country.
This is ROI that is at the self-actualization level in my analogy. The business is contributing to an ROI they may be tracking for sustainability, but any ROI for sustainability is a global contribution that benefits all of us.
Growth Mindset quickly shows us that Intangible ROI is a misnomer
At this point, I would suspect you may argue that intangible ROI is in fact quite tangible. You would be right. Like I said in the beginning, it has been hiding in plain sight the whole time.
The minute you start to see solutions this way you can’t go back. A retail solution that is saving a business money by using sensors to monitor a restaurant kitchen to reduce ingredient spoilage is reducing food waste. Building an asset tracking solution that is monitoring delivery trucks to save money on gas? That solution is also reducing use of fossil fuels and lowering emissions. Predictive maintenance on pipes to prevent leakage? If we are talking about water pipelines, we are reducing water waste. If we are talking midstream oil pipelines, we are helping to prevent potential damage to ecosystems.
For those of you in the IoT space, I invite you to look at your portfolio of solutions you have worked on and see if you can find the sustainability ROI in them. As you embark on a new project, I invite you to become an advocate for the sustainability ROI bringing this conversation into architectural design sessions and business model workshops.
Sustainability isn’t a vertical or a horizontal. It’s a diagonal. Sustainability touches every aspect of our industries and our lives. It is the one area of innovation that if we don’t start to weave it into all our solutions, it will impact us in ways we are only beginning to understand.
We can change what we can measure. We can measure what we record. We can record what data can capture. IoT is the foundation for data capture that will enable us to achieve our environmental goals.
No matter where you are on your sustainability journey, Microsoft is creating tools and solutions to support you. We are so excited to release the Azure IoT for Sustainability website and invite you to visit to begin your sustainability journey with IoT.