The Internet of Things (IoT) in 2018 and beyond – towards monetization, tangible value and an increasing focus on IoT in a holistic context of transformation, strategy, multiple complementary technologies, and larger deployments.
While for many organizations IoT is still new and most investments happen in IIoT, the narrative changes.
Today it’s increasingly about value instead of potential, about the combination of IoT, AI and other related technologies to derive insights, decisions and revenues from sensor data and about IoT monetization, as scalable, IoT-enabled projects become part of less limited business objectives and digital transformation projects with a focus on services and applications.
Although a majority of organizations overall are only beginning, there is a clear shift from the age-old focus on the number of connected devices towards this broader vision in which business goals, people and value take center stage.
On top of a shift in terms of thinking about and understanding IoT there is a shift in the actual usage and deployment of it among leading organizations.
The essential definition of the Internet of Things still holds: IoT is a network of connected devices with 1) unique identifiers in the form of an IP address which 2) have embedded technologies or are equipped with technologies that enable them to sense, gather data and communicate about the environment in which they reside and/or themselves.
However, in the broader scope and amid the mentioned shifts the definition of IoT doesn’t matter that much if it isn’t put into a larger perspective.
Still, now is not the time for definitions and semantics anymore. Now it’s time for business, value, monetization, evolutions and IoT in action. And if we want definitions, to broaden them in order to finally encompass the why instead of just the essential what of IoT, would make more than sense.
An IoT 2018 business reality check
Although there are more devices active, more large scale IoT projects and a growing de facto usage of IoT, with the mentioned shifts in mind, there is still quite some work for both suppliers and organizations in reality.
- While the narrative finally starts to shift towards value and business, many organizations still don’t know what IoT is or can mean for them. You rarely talk about IoT with a business executive, you talk about it with CIOs and people who already kind of know it, leverage it (which could be the CIO but also many others, depending on project) or are doing their homework. How do you explain IoT to those who take the big business decisions and do they even need to know what it is? Go at a random IoT event, you mainly see people who are involved in the industry or already look at the possibilities and have a decision-making or advisory role but far less people who sign off the project on a management, let alone board level.
- Related with the previous point: IoT decisions are taken on a business level. Yet, they are not IoT decisions, they are business decisions in which IoT has a crucial role. This is a challenge for the market: on one hand you need to explain what IoT is and does but on the other hand it’s key to talk about business whereby the Internet of Things is part of bigger picture of many related technologies (once more, depending on project and scope) and an enabler, not a goal (as no technological reality ever is).
- While IoT is highly transformational in nature (more below), digital transformation is not a matter of IoT or any technology alone. In some industries there isn’t a real case for IoT projects. In others it’s about pure tactical goals. Cost cutting, data (which is acquired and used for some insights or simple goals but often remains underutilized or even unused as has always been the case with data), automation, you name it. It’s time to go beyond selling the benefits of IoT and focus on the industries and use cases where advanced analytics and IoT really make a difference. On the other hand, it’s also important to realize that in some industries there isn’t a case for it yet and that de facto strategic and tactical goals are far higher than transformational ones. Leading project partners know how to help organizations do far more with data.
- A large portion of companies simply isn’t ready for IoT because there are issues that should be long solved. The way in which you get the most out of your data as just mentioned is one example. Although there is IoT network coverage pretty much everywhere, there is a range of platforms offering plenty of ways to get IoT projects rolling and there are ample frameworks such as the Industry 4.0 vision for industrial markets, reality shows ample challenges in a far broader perspective. If you visit an average factory you often see they’re still dealing with paper-based processes, legacy systems and so forth. IoT deployments will continue to happen at different speeds because of the fact that in some use cases and industries there is far more value and readiness than in others.
- Many organizations who want to start with IoT projects don’t know how. It is one of the reasons why system integrators, who know the business of their customers inside out and are their long trusted partners, often take the lead in projects where IoT is involved (as is the fact that, as previously mentioned, some organizations want to leverage the Internet of Things but have to solve other challenges first in order to be ready). The end-to-end vision and full understanding of the markets and technologies, as well as the hurdles, is key. Many companies simply don’t know where to start, where to end and how to get from start to end. Why to start is something else. Given the fact that IoT is increasingly embraced by small and medium enterprises or for very specific use cases there certainly is a market for more vertical and SME-oriented trusted partners as well.
IoT 2018 trends and evolutions
Across this overview we’ve already mentioned (the roots) of many evolutions in IoT for 2018. In fact, all the blue colored boxes contain one each.
As always several of these evolutions are hidden in the evolutions as we see them in the here and now, in real-life projects, in vendor initiatives that respond to a clear and present need, in 2017 research and so forth, yet there are also changes that might be somewhat ‘unexpected’.
As we’ve been emphasizing the importance of business, value, outcomes, real-life challenges and solutions, projects and so forth throughout this article it wouldn’t make much sense to only focus on technology trends for 2018.
Most of them were already in the make:
- yes, blockchain and IoT becomes an important combination on various levels;
- indeed, it’s clear that artificial intelligence will be more important in IoT;
- true, LPWAN will continue to grow given new sensors, technologies and higher reach in combination with the nature of many Internet of Things projects;
- and, for sure, there is a growing evolution towards the edge (with edge computing and fog computing and AI and IoT across other areas as described below),where projects demand it.
As IoT technology moves to the edge, business (re)centralizes
The movement towards to the edge by the way is nothing surprising and, just as the increasing role of blockchain, among others, fits in the overall context of decentralization and movements towards to the edge which we’ve been emphasizing in so many areas, from document capture and security to information management and intelligence in the field since years.
However, make no mistake: we are mainly talking about technologies and applications here. It’s not because technologies, some business processes and applications move towards the edge that all business aspects do. Well on the contrary: we see a trend towards a full centralization of decision power and of previously decentralized ways of working in many organizations, just as several companies start to get some workloads out of the cloud again (also a token of maturity) as organizations look more at what matters in detail.
IoT spending 2018 – approaching the $800 billion mark
According to IDC, total spending on IoT in 2018 will reach $772.5 billion in 2018. It is slightly less than was expected in previous forecasts of the firm but the main trends and evolutions haven’t changed.
There are various possible reasons why these forecasts get revised of course. Moreover, there are some evolutions which here and there could lead to a slower than expected investment. These don’t even have to be related with the usage of IoT as such. The increasing attention for changing data protection and privacy rules, for instance, are on the mind as risks for ample organizations. Moreover, these new personal data and privacy rules require budgets. And these budgets need to come from somewhere.