What did we learn from Verizon’s IoT report?
Verizon has recently released its State of the Market: Internet of Things 2016 report, which outlined the growth and potential for the IoT industry. The report features a number of use cases and information detailing the technology’s rise to fame, but also barriers for enterprise organizations over the coming months.
Here, we’ve detailed a few of the lessons learnt from the report:
IoT is no longer a nice idea, it’s becoming mainstream
If 2015 was the year IoT gained credibility in the business world, 2016 is the year IoT gains commercial feasibility.
While the concept of IoT has been around for some time, the idea of the technology having a B2B commercial backbone, capable of delivering on commercial objectives is now a reality. The potential of IoT has been well discussed but now we are seeing companies delivering on the promise. IBM is one which has particularly active in this segment, driving the Watson use case through the press repeatedly this year.
Wearables had a head start on B2B applications, though could be to thank for the relative ease of acceptance within the industry (both for enterprise and consumers). The marketing campaigns surrounding the earliest fitness wearables or smart watches normalized IoT, allowing for what could be perceived as a simple transition into the B2B sphere. But thanks to these (comparative) simple applications, the integration of IoT into the manufacturing process, healthcare, transportation, utilities, smart cities and any other context you could think of, has been a seemingly simple transition.
According to Verizon’s research, IoT networks connections have been growing healthily, the number of connections in the utilities industry has grown 58% between 2014 and 2015, and this is also backed up by forecasts by IDC research. The IDC’s findings estimate the IoT market spend will increase from $591.7 billion in 2014 to $1.3 trillion in 2019.
IoT might be entering mainstream, but data could hold it back
Data acquisition, analysis and action might be becoming one of the most repetitive conversations in the industry, but that is for good reason.
Verizon recently commissioned a report by Oxford Economics highlighted only 8% of businesses are using more than 25% of the IoT data which they have collected. In fact, only 50% of the businesses involved in the study said they would be using more than 25% of the collected IoT data in three years’ time.
On the surface, this shouldn’t seem as an issue that would cause too many problems, until you take into account the long-term deliverables of IoT. The promise of IoT is the collection of vast quantities of data to allow advanced analytics tools to make accurate predictions and customizations. If only a partial amount of the data is being analysed, only a partial amount of the promise can be realized.
IoT has hit the mainstream market, however it will never reach the promised deliverables if companies are not analysing more of the data collected. What is the point is spending millions on sensors, connections, storage and data scientists, if the full potential of the technology cannot be achieved. Can the long term financial security of the IoT industry be guaranteed if the promise is never fully realized?
There could be a number of reasons for the backlog of data, though industry insiders have told BCN the interface required to translate different data sets into a common language for analysis could be one of the reasons for the holdup. It would appear not all of the IoT value chain has evolved at the same pace.
Regulators will have to play a more significant role in the future
Regulation does and will play a major role in the delivery and adoption of IoT. Back in 2007 the Energy Act in the US accelerated the role of IoT in the monitoring of energy consumption, and while this could be considered the initial catalyst, growth has increased year on year ever since.
While this is an instance of regulation giving the IoT industry freedom to grow, it should not be seen as a surprise if regulators put in place rulings which could limit what the industry can and cannot do. Whether it is the ethical use of data, volumes of data which can be collected on a single person or the means in which and where the data is stored, regulation is likely to play a more significant role in coming years.
The report discusses the security of IoT which is a constant barrier for businesses and individuals alike. New regulations are likely to severely punish instances of data loss, and when you consider the sheer volume of data should IoT reach its potential, future instances of data loss could be disastrous.
Currently regulation within the IoT market is relatively low-key, encouraging growth of the technology as opposed to monitoring it, however there are a number of areas which need consideration in the short- to mid-term future. Lack of control and information asymmetry, low-quality consent, intrusive identification of behaviour patterns and user profiling and limitations on the possibility of remaining anonymous whilst using services are all areas which should be taken into consideration.