In 2016, we saw IoT (Internet of Things) technology being implemented into almost every technology sector, and with that came significant changes in how enterprises and consumers interact with machines. We believe 2017 will be the year that we begin to see more refined IoT solutions, as well as reap the benefits of these more sophisticated solutions. In this article, we’ll look at some more specific trends that are expected to emerge in the industry this year.
- Enterprise IoT solutions will be more impactful than consumer IoT solutions: While CES brought some pretty interesting consumer IoT applications to our attention in January, this year we will see the monetization and implementation of real, large-scale IoT solutions for business take off. Most enterprise IoT solutions to date have been isolated and monitor operations, like those in farming or solar, preventatively rather than connecting the machines together to optimize the utilization of each asset. Larger, more integrated solutions are where real value is for enterprise. Agriculture is one industry already making positive ROI (return-on-investment) by implementing IoT. Companies have optimized how they use resources like water by monitoring crop yields, soil moisture, and more. IoT enables a flexible and more importantly cost-effective platform that can handle many data streams from sensors in the soil, silos and warehouses, farm machinery, weather feeds, pricing signals, supply chain details, and more. As more information is brought together, a system like this becomes more valuable and a farm can make better decisions. Expect a breakout like this in other industries due to both technology advances and market readiness.
- Security will continue to be a high-profile issue: Threats to IoT security proliferated throughout the past year and it’ll without a doubt continue to be a concern for both consumers and enterprises alike in 2017. DDoS attacks, which used unsecured smart home devices to infect networks with malicious code, seemed to be the straw that broke the camel’s back to push governments, manufacturers, and consumers around the world to be more cognizant of security. Governments should finally hold manufacturers and developers responsible for their products’ impact on the Internet by implementing light regulations and best practices, such as requiring security rating labeling on consumer products or developing a common security framework and approach to assess cybersecurity in IoT systems. Despite small improvements in security practices, however, there’s still too much vulnerability out there. We should all anticipate more high-profile attacks in 2017 whether they be more DDoS or privacy attacks.
- Corporate battles over IoT will increase in size and scope: As the IoT industry begins to consolidate, 2017 will bring even more mergers, acquisitions, and partnerships. Metcalfe’s Law tells us that value is proportional to the square of the number of connected users, making IoT networks very, very valuable and thus worth a fight from big tech players. Tech giants like GE, Apple, IBM, Intel, Amazon, and Verizon are fighting to develop IoT products and gain the marketshare. These corporations are all jumping into the fray with sizable acquisitions, investments, internal innovation groups, and more. With a market expected to be larger than the mobile boom at stake, there’s no wonder why we’ll see so much interest and activity. While to date most innovation in IoT has been fueled by startups, one thing is certain—the big guys won’t be left out of this one.
- Open and interoperable solutions will start to edge out closed ones: The McKinsey Global Institute cited interoperability as the difference between the IoT being a $7 trillion market and $11.1 trillion market by 2025—that’s a $4 trillion difference interoperability makes! Consumers and enterprises are starting to understand that value of interoperability—the more devices we are able to connect, the more powerful our data and insights will be. Value of IoT devices is largely based on how the system can work with anything in the future. Locking yourself into one ecosystem creates fragmentation, limits flexibility, and likely costs more because users must buy from within that ecosystem. While there’s a fairly even split right now between open and closed ecosystems, the trend is moving toward more openness. Most IoT value will be delivered by many systems interoperating to meet the needs of diverse stakeholders, as opposed to one killer app or platform that’s locked and closed.
- Individual vertical markets will move closer toward their own standards for IoT technology: Speaking of standards… each industry with a stake in IoT has different technological needs and will benefit from a different architecture based on what they’re looking to do with IoT. For example, the agriculture industry values long-distance connectivity and more edge operation while a smart home works with shorter distances to transmit heavier data like video and can rely on the cloud more. Each unique industry will start to mature and settle on protocols, hardware, and more to define their specific standard and put innovation on the fast track.
- IoT platforms will become commonplace in business software landscapes: As mentioned above, more industry verticals are looking to IoT-based solutions to improve operational efficiencies, and this year there will be an increasing demand for IoT platforms that can be readily adapted to industry-specific problems. Companies have industry-specific expertise, but are rarely equipped to navigate IoT connectivity, security, and hardware considerations. A competent IoT platform partner can significantly reduce cost and risk. Research firm IoT Analytics expects IoT platforms to grow at a 33% CAGR (compound annual growth rate) through 2021 as indicated in its recent platform report.
- Provisioning will get serious attention: A lesser discussed part of implementing an IoT solution is how the devices get connected. In some enterprise systems, there are hundreds or thousands or millions of devices that need to be connected. Batch and mass provisioning that is secure and can be done at scale is a requirement for realistically deploying these systems. Rather than plugging each sensor into a computer to authenticate and provision it manually, new processes that allow specific devices to be ready straight from the factory will become more common in 2017.
Thus, 2017 will be a defining year as the IoT industry continues to grow into its own. There is no doubt that new surprises will emerge this year and long-term trends will continue to allow IoT to succeed on a larger scale moving forward.
About the Author: Arup Barat is the chief commercial officer at infiswift