Image by Joel Freecheck used under Creative Commons license http://bit.ly/1oEbsS5
Verizon has proclaimed 2015 as the year that IoT went mainstream, and received heaps of publicity for doing so. That proclamation is based on the findings of Verizon’s State of the Market: Internet of Things 2016 report and the changes Verizon found from when it prepared the earlier State of the Market: The Internet of Things 2015 report, but the evidence in support of that claim is a bit weak.
In the 2016 report Verizon cites as the source of its conclusions: Verizon usage data, including new IoT connections; Verizon-commissioned research by Oxford Economics; interviews with Verizon customers: insights gleaned from customers working on real IoT projects in the private and public sectors; interviews with Verizon subject matter experts; Research from Gartner, IDC, PwC and other authorities.
It says: “In our view, 2015 was the year IoT gained legitimacy. Businesses budged off a ‘start small think big’ mindset. Today, they’re building IoT into future strategies and business models. Companies across all industries now have IoT squarely on their radar.” In support of this it cites IDC forecasts. Nothing new there.
One justification for Verizon’s conclusions is the percentage growth in IoT connections to its own network from 2014 to 2015: Healthcare/pharma, up 26 percent; home monitoring, up 50 percent; energy/utilities, up 58 percent; smart cities, up 43 percent, agriculture, up 33 percent; transportation/distribution, up 49 percent.
Where are manufacturing and media?
Impressive figures indeed, but in stark contrast to those revealed in the 2015 report. Then, Verizon spoke not of IoT connections, but of M2M connections. Here are the figures: manufacturing 204 percent; finance & insurance 128 percent; media & entertainment 120 percent; home monitoring 89 percent; retail & hospitality 88 percent; transportation & distribution 83 percent; energy & utilities 49 percent; public sector/smart cities 46 percent; healthcare & pharma 40 percent.
So the top three growth categories for 2015 didn’t even make the list for 2016. Is this because they’re reaching saturation point? I doubt it. My point is if you are going to make bold claims about IoT going mainstream in 12 months, you really should be doing some comparison with your findings from a year ago. There is not one mention of manufacturing, finance, media or entertainment in the 2016 report.
Verizon says: “Throughout 2016 and beyond, we’ll continue to see IoT deployed as a mainstream path to generating higher revenue, thanks largely to the rise of four key trends which have come to an inflection point in the past year; data monetisation, core IoT networks and low power devices, platforms as a service, and investment in IoT startups.”
It cites data from the research commissioned by Oxford Economics. “Our Oxford Economics study found that today only eight of businesses are actually using more than 25 percent of their IoT data. Nearly 50 percent of businesses already on the IoT journey estimate that in two to three years they will be using more than 25 percent of their data as companies realise the value in monetising new products and services, driven by insights from data to drive down costs or increase revenues.”
Does that mean its mainstream? It seems to suggest that watershed is still some two years away.
IoT platforms have matured
Platform as a service is of particular interest to Verizon. Its Thingspace platform is one a number competing in that space. And it says: “We see complexity, a fragmented ecosystem and concerns about security and privacy as the key factors that are driving the proliferation of IoT platforms. … Today’s IoT platforms address head on the problems of complexity and fragmentation that up until now have been two of the biggest barriers to IoT innovation. … The availability of mature platforms not only simplifies the development process, it allows enterprise users to drive the creation of new product and service categories as a foundation for future contextual experiences for consumers, businesses and citizens.”
The available platforms might be mature, but it’s their uptake that determines how ‘mainstream’ IoT has become, and there’s no information on that.
All that said, it’s a useful report. I think it’s just unfortunate the main takeaway seems to be “IoT has gone mainstream” for which there does not seem to be particularly strong evidence, when there are other aspects that could usefully have been explored.
In particular there’s a good section on IoT in agriculture, with a number of useful statistics and case studies. The report opens by saying: “Industry experts have quipped that the agriculture industry is proof that soon, every company will be an IoT business. Why? Because the benefits that growers are reaping by deploying IoT technologies to their fields—namely bigger crop yields, overall operational efficiencies and reduced costs—are too valuable to ignore.”
That’s a message the Australian government needs to hear loud and clear. As I pointed out last year, the Government’s July 2015 white paper Towards Smart Farming managed to almost completely ignore the agricultural potential of IoT.
