YOU ARE AT:Opinion2016 Predictions: IoT’s next phase

2016 Predictions: IoT’s next phase

Particle sees the IoT market entering its next phase in 2016

Editor’s Note: With 2016 now upon us, RCR Wireless News has gathered predictions from leading industry analysts and executives on what they expect to see in the new year.

Businesses around the world are starting to invest in the “Internet of Things,” and these companies are starting to understand how investments in connecting the physical world to the internet will positively affect their bottom line. Tata Consultancy Services released a global research study earlier this year, which surveyed 800 executives from multinational corporates throughout the world, and found these business leaders see their IoT investments directly contributing to revenue gain, citing increases ranging between 15% and 64%.

It seems the promise of IoT was enough for many corporations to invest in 2015, with 7% planning to make major investments of $500 million or more and another 12% planning for $100 million this past year, according to the same study.

Recent research and analyst reports suggest that this trend will continue. A recent report by International Data Corporation says IoT spending is expected to grow from $699 billion in 2015 to nearly $1.3 trillion in 2019, which indicates we should expect big things from vendors, regulators and buyers as the market matures over the next few years.

Looking ahead for the coming year, here’s what we might expect from IoT in 2016:

2016 isn’t quite the ‘year of IoT,’ it will be the year of experimentation
Media have declared year after year “this will be the year of IoT,” but at the end of every year it feels like we’re not quite there yet. This is because we’re confusing experiments with results. The reality of today’s IoT is there are a growing number of companies doing very real and interesting experiments in IoT. But it’s also true these experiments aren’t fully ready for wide-scale deployment or for the industry to realize the true value of the technology.

Building a connected physical product for the first time is a slow process, but during that process we learn valuable lessons about what technology is necessary, about the timelines and resources required to make the product successful and about the organization’s internal ability to handle this new wave of innovation.

In 2016, we’ll see a major uptick in experiments in general – and many of those experiments will be successful, identifying financially and logistically sound IoT investments for the company. Expect to see businesses and consumers adopting more IoT products and making more investments to roll up their sleeves and try out the technology.

C-suite and developer teams will square up
Slow IoT adoption isn’t just due to technical challenges. I predict that in 2016, development teams and the C-level will (finally) get on the same page in terms of the tools, approach and requirements needed for deployment.

Developing IoT products requires collaboration and communication across groups that haven’t had much reason to interact in the past. At a traditional OEM, IoT might be the first time the hardware engineering team and the IT organization have had to collaborate. IoT often involves a wide range of teams to work together – from research and development and product teams to data science organizations and C-level decision makers. IoT investments and line items are catching the attention of the C-suite, and as more experiments and products become “real,” we should expect to see more shared ownership among these groups and cross-functional teams. 2016 will be a big year for the cultural changes needed to make IoT successful.

There will be greater industry understanding of IoT risk
So far a major hurdle to IoT adoption has been the perception of risk. Businesses have been fearful to make an investment that may not be compliant with future standards, that may not integrate with current or future technology investments or don’t yet have clear use cases to demonstrate expected return on investment.

Companies are now starting to recognize there are ways to mitigate these risks other than waiting on the sidelines. We see companies investing in multiple technologies at the same time to hedge their risk and finding ways to “start small,” targeting early adopters and risk-seeking customers who are more comfortable with new, uncertain technologies.

As decision makers witness more progress and case studies, they’ll better understand how to make informed and “safe” investments to set themselves up for growth as the market matures.

Innovation will forge ahead amidst (or despite) emerging standards and protocols
Attempts to standardize the industry, like LoRa and Thread, will likely gain some traction in 2016, but players looking to shake up the IoT market won’t wait around.

Ambitious IoT practitioners will forge ahead in 2016 regardless of how the standards and protocols discussions evolve for fear of losing momentum and stifling innovation. Rather than wait for the verdict on standards to play out, they’ll turn to whichever set they believe is best fit to get their projects to market fastest.

We’ll reach a turning point in the cost of connecting
Connectivity, up to this point, has been fairly expensive, which is why those that are in place and performing today are mainly tied to extremely valuable assets – like those connected devices found in a manufacturing facility that would cause major financial blows if they were to fail.

In 2016, we’re reaching a turning point in that affordability. In 2014, a certified BLE module may have cost $7 or $8; today they cost $3 or $4. A certified Wi-Fi module may have cost $12 in 2014, but now costs $6 or $7. As Moore’s Law would suggest, we’re seeing the cost of connectivity drop in half every 18 months.

Thanks to increasingly pervasive technology and networks, the everyday person will be able to connect their “things” at home or at work to make their lives easier at a reasonable cost, and businesses will have the ability to put connectivity in places that weren’t economically viable in the past to drive better business results and ROI.

Zach Supalla is the founder and CEO of Particle, an IoT startup that’s making it easier to build, connect and manage Internet-connected hardware products deployed at massive scale. Supalla earned an MBA from the Kellogg School of Management and an MEM (masters in engineering management) from the McCormick School of Engineering at Northwestern. Before Particle, Supalla worked as a management consultant with McKinsey & Company, advising Fortune 500 companies on strategy, operations, and product development. He is a graduate of HAX, the world’s first and most prolific hardware accelerator.

ABOUT AUTHOR

Reality Check
Reality Checkhttps://www.rcrwireless.com
Subject to editorial review and copy edit, RCR Wireless News accepts bylined thought leadership articles, up to 1000 words, from industry executives. Submitted articles become property of RCR Wireless News. Submit articles to [email protected] with "Reality Check" in subject line.