Internet of Things (IoT) Key Messages- Part 2: IDC DIrections 2014 + Market Survey Abstracts

Introduction:

I attended three of four IoT sessions at IDC Directions 2014 plus sat in on a lunchtime roundtable discussion of IoT devices and semiconductors led by Mario Morales.  All of the above were excellent.  This article provides highlights of two presentations and abstracts of various IoT market studies.

On the Cusp of a Demand-Driven Internet of Things (IoT) Market, by Carrie MacGillivray

IDC defines the Internet of Things (IoT) as a network connecting – either wired or wireless – devices, or ‘things’, that is characterized by autonomous provisioning, management, and monitoring. The IoT is innately analytical and integrated.  While wireless connectivity was initially used, wireless is more prevalent today (e.g.  cellular, Bluetooth, WiFi, ZigBee)

  • 30B Connected Things Predicted by 2020!
  • 2012 -2020 CAGR = 6% from 19B connected devices in 2012
  • IoT Revenue Almost 2x by 2020 to $8.9T from $4.8T in 2012
  • IoT has been a supply driven market with vendors looking for new opportunities and revenue sources.  
  • IoT has potential to complement product and service portfoliosOngoing development of connected Smart Cities/Cars/Houses/Things Regulatory environment 
  • Age of “Big Data” will be used to analyze information collected from Internet connected devices
  • Connected Culture -High affinity for full-time connectivity

Survey Says… Only 27% of respondents have already deployed IoT; while 53% of respondents have plans to launch 
• Opportunity exists for vendors to help service providers and system integrators to accelerate deployments
• Positive news is that less than 20% are not planning or haven’t thought about how IoT can affect their business 
Source: IDC’s Internet of Things Survey, January 2014
• IoT vertical markets include: Healthcare, Banking, Utilities, Government, Transportation, Insurance, Retail
• Early Deployments in Metering & Payments also remote monitoring, digital signage, fleet tracking, security systems, asset tracking & others

Key Challenges to IoT Adoption:
-Lack of standards 
-Nascent ecosystem for app development
-Global scalability
-Other IT/mobility priorities
-Lack of customer awareness

What Will Hinder the deployment of IoT?
Security and/or privacy concerns, upfront costs for deployment, ongoing costs (connectiity charges, storage, etc), managment buy-in to the ultimate value or purpose of the solution
IDC’s Denise Lund:  Lack of Standardization and Privacy Regulations Could Strain IoT Growth


Frenemies & Coopetition Characterize the IoT Market in 2014 & Beyond
-Database Vendors & Systems Integrators
-Mobile Operators 
-Embedded device and systems manufacturers 
–>At the intersection of these three are:  Intelligence, Connectivity, Analytics, Services

Survey Says… Leaders in the IoT will be – Anyone’s Game? 
-Device & semiconductor manufacturers
-Mobile operators
-Network equipment vendors
-Software vendors
-Systems integrators

Where Will IoT Growth Come From? 
-B2B market 50%
-Consumer market  46%
-Government 4%

IoT will require new business models and will provide diversification of revenue stream for many players.
A business model of including (wireless) connectivity charges in the service, as Amazon did with its Kindle, may be also applicable to low duty cycle Internet access from connected devices.

Closing Thoughts:
 • Survey was a level set of expectations 
• 63% say IoT is “strategic” to their business 
• To date, IoT has been supply driven, but enterprise awareness and willingness to invest is becoming reality 
• Opportunity is ripe for many vendors to play and win share

Internet of Things (IoT): Realizing Value Through Intelligent Business Transformation, by Mario Morales
Key takeaways:
• Market transformation means change from top to bottom at your organization 
• Markets are being redefined 
• The next big markets are all ready here 
• Intelligent systems unlock opportunity 
• Appetite for data drives sustainable growth 
• From the cloud to client 
• Technology alone does not guarantee success 
• Moving away from shipping hardware to system level value and solutions 
• Focus must be on execution and solutions that address a diverging set of customers and vertical markets 
• Ecosystem is fragmented, vertical market focused


Key technologies enabling IoT business transformation:
• Heterogeneous SoCs 
• Low power connectivity and SoCs, energy harvesting/reduction
• Security in silicon 
• Large solid state capacity to support appetite for data and eventually analytics 
• Natural User Interfaces (NUIs)
• Intelligent sensor fusion 
• Audio and visual search, real time system learning

Sensors are part of IoT Revolution

Proliferation of sensors are tied to their User Interface (UI):
• Providing systems with contextual awareness 
• Connecting with our environment 
• 40 year effort to replicate human senses 
• Market still looking for viable usage scenarios, applications, and business models


IoT Transformation Drives the Monetization of Data 
Today: Function & data, Connected, Limited Security 
Tomorrow:  Data drives function, Interoperable, Scalable, Security is fundamental to IoT solution


IoT Markets with potential:  
Retail/connected store, smart cities, intelligent vehicles (connected car, autonomous operation)

Comment and Analysis:
We think that several different types of standards will be necessary for the overall IoT market to gain traction.  And even then, security and privacy concerns will need to be addressed for each vertical market.  The types of standards deal with Internet or local area connectivity (BlueTooth, low power WiFi, Zigbee, etc), Telco provisioning and management of millions of new device types, QoS for low latency or high throughput data transfers, and (vertical) industry specific specifications for data particular to the industry, e.g. health care, financial/banking, insurance, real estate, surveillance, etc.
  

During his closing keynote, UT Professor of Innovation (and Ethernet inventor) Bob Metcalfe, PhD, said that “software defined networking (SDN) hasn’t really found it’s niche yet.  Perhaps, it will in managing the Internet of Things.”  Even though SDN was never intended to be used to provision, control and manage the IoTs/connected devices, we suggest that it could do so along with managing internal network equipment from source to destination route.

IDC’s Worldwide Internet of Things Spending by Vertical Market 2014–2017 Forecast – Feb 2014

This IDC study analyzes the worldwide vertical market opportunity for the burgeoning Internet of Things (IoT) market. It provides a market outlook for 2012–2017 and sets the forecast within the context of the IoT ecosystem, including intelligent systems, connectivity services, platforms, analytics, and vertical applications in addition to security and professional services required to build out a complete picture. This study discusses the key vertical market trends contributing to the growth of the IoT on a worldwide basis. A worldwide vertical market revenue forecast is included.

“The Internet of Things market must be understood in terms of vertical markets because the value of IoT is based on individual use cases across all markets,” said Scott Tiazkun, senior research analyst, IDC’s Global Technology and Industry Research Organization. “Successful sales and marketing efforts by vendors will be based on understanding the most lucrative verticals that offer current growth and future potential and then creating solutions for specific use cases that address industry-specific business processes.”

https://www.idc.com/getdoc.jsp?containerId=246384


Addendum:  IoT Market Research Studies

Mckinsey Global Institute’s Disruptive Technologies report calls out the Internet of Things (IoT) as a top disruptive technology trend that will have an impact of as much as $6 Trillion on the world economy by 2025 with 50 billion connected devices. The Internet of Things is the next huge wave of growth of the Internet.  Big growth numbers and expectations are dramatically expanding for the Internet of Things in Silicon Valley and globally. Valuations for IoT startups have also increased dramatically and caught Wall Street and the venture capital community by storm, including Google’s acquisition of Nest for $3.2 billion dollars and Jawbone’s pre-IPO valuation at $1.5 billion.


Gartner Group: IoT to transform data center market

The Internet of Things (IoT) has a potential transformational effect on the data center market, its customers, technology providers, technologies, and sales and marketing models, according to Gartner, The IoT is expected to reach 26 billion units installed by 2020, and by that time, IoT product and service suppliers will generate incremental revenue exceeding USD 300 billion, mostly in services.

The report has also identified potential challenges, covering security, enterprise, consumer privacy, data, storage management, server technologies, and data centre network.

The increasing digitization and automation of the multitudes of devices deployed across different areas of modern urban environments are expected to create new security challenges to many industries. Significant security challenges will remain as the big data created as a result of the deployment of myriad devices will drastically increase security complexity. This, in turn, will have an impact on availability requirements, which are also expected to increase, putting real-time business processes and, potentially, personal safety at risk.

As is already the case with smart metering equipment and increasingly digitized automobiles, there will be a large amount of data providing information on users’ personal use of devices that, if not secured, can give rise to breaches of privacy. This is particularly challenging as the information generated by IoT is a key to bringing better services and the management of such devices.

The impact of the IoT on storage is two-pronged in types of data to be stored: personal data (consumer-driven) and big data (enterprise-driven). As consumers utilize apps and devices continue to learn about the user, significant data will be generated.

The impact of the IoT on storage infrastructure is another factor contributing to the increasing demand for more storage capacity, and one that will have to be addressed as this data becomes more prevalent. The focus today must be on storage capacity, as well as whether or not the business can harvest and use IoT data in a cost-effective manner. The impact of IoT on the server market is forecast to be largely focused on increased investment in key vertical industries and organizations related to those industries where IoT can be profitable or add significant value. Existing data center WAN links are sized for the moderate-bandwidth requirements generated by human interactions with applications. IoT is expected to dramatically change these patterns by transferring massive amounts of small message sensor data to the data center for processing, dramatically increasing inbound data center bandwidth requirements.

The magnitude of network connections and data associated with the IoT are expected to accelerate a distributed data center management approach that calls for providers to offer efficient system management platforms. This new architecture will present operations staffs with significant challenges, as they will need to manage the entire environment as a homogeneous entity while being able to monitor and control individual locations. Furthermore, backing up this volume of data will present potentially insoluble governance issues, such as network bandwidth and remote storage bandwidth, and capacity to back up all raw data is likely to be unaffordable. Consequently, organizations will have to automate selective backup of the data that they believe will be valuable/required. This sifting and sorting will generate additional big data processing loads that will consume additional processing, storage and network resources that will have to be managed.

http://www.telecompaper.com/news/iot-to-transform-data-center-market-stu…


Semiconductor Wireless Sensor Networks IoT Market to Hit $12 bil by 2020 Forecasts a Research Report

Worldwide markets are poised to achieve significant growth as the Semiconductor Wireless Sensor Network is used to implement the Internet of things and to monitor pipelines, oil wells, and health care patients to illustrate the variety of projects supported by these networks.

Semiconductor wireless sensor networks (http://www.reportsnreports.com/reports/275026-semiconductor-wireless-sensor-internet-of-things-iot-market-shares-strategies-and-forecasts-worldwide-2014-to-2020.html) are used for bridge monitoring, implementing the smart grid, implementing the Internet of things, and monitoring for security implementation. The systems are used to implement energy savings in homes and commercial buildings, almost anything can be monitored with sensors and tracked on a smart phone. Projects are ongoing.

With 9 billion devices connected to the Internet in 2014, phenomenal growth is likely to occur when that number rises to 100 billion by 2020. Businesses control devices with sensors and wireless sensor networks (WSNs).

The sensors connected to the Internet promise to bring a big data explosion. Much of the data will be discarded, as users get simply overwhelmed by vast volumes. Analytics will become popular inside the wireless sensor networks so that alerts are generated at the point of collection of data.

The issue is how to embed analytics into the wireless sensor network control units so that only the alert data needed is transmitted. Users of information need to be able to find, control, manage, and secure the information coming from sensors onto the network. Users need to analyze and exploit the information coming from sensors.

Advanced technologies for wireless sensor networks are associated with emerging ways of interconnecting devices that have never been connected before. Networking is based on leveraging the feasibility of making sensors work independently in groups to accomplish insight not otherwise available. Advanced storage devices are emerging simultaneously with the energy harvesting devices that are economical, making sensor networks feasible. Storage devices can leverage the power captured by energy harvesting when sensors and devices are interconnected as a network.

Data storage technologies connected to the sensors are permitting far better control of the world around us, implementing vastly improved energy efficiency as lights and hearting are turned on and off just as needed. Wireless sensor networks implement cost-effective systems.

Wireless sensor networks are developing a market presence. They are set to power wireless sensor network proliferation. Independent sensor devices located almost anywhere have attained workable levels of efficiency.

The proliferation of apps on smart phones will drive growth of semiconductor wireless sensor networks markets because the sensors work directly as they are installed without excess labor and wiring that has been necessary previously, making the systems more convenient to install and run.

Healthy lifestyle choices can increase the length of DNA sequences found at the end of a person’s chromosomes and reverse aging. This discovery is likely to increase interest in monitoring and testing DNA sequences and looking at the ends of the chromosomes. This discovery is likely to increase a shift toward wellness initiatives. It has stimulated the need for better communication between clinicians and patients. New sensor technology creates the opportunity for monitoring and testing. Wireless sensor network devices can be used to send alerts to at risk people who are exercising.

Wireless sensor networking is set to grow as sensors are freed from the grid and networks implement connectivity that is mesh architecture based. Converting ambient energy to useable electrical energy harvesting (EH) systems creates the opportunity to implement wireless sensor networks. These networks interconnect an inexpensive and compact group of devices and sensors. The networks use wireless capability to power portable electrical devices.

According to the semiconductor wireless sensor network market research study, “Semiconductor wireless sensor network markets are evolving as smart phone devices and technology find more uses throughout the landscape of the Internet of Things. Sensors can provide monitoring that has not previously been available. Differential diagnostic tools support provide differential information that helps manage our daily lives from traffic patterns to crime detections, to medical treatment.”

“The decision process take into account clinical findings from the home monitoring devices and from symptoms verbally communicated in a clinical services setting. Improved economics of healthcare delivery implementation is facilitated by wireless sensor networks. This is true across the spectrum of things that can be monitored by sensors”

Semiconductor Wireless Sensor Networks Markets at $2.7 billion in 2013 are forecast to reach $12 billion Worldwide by 2020. Wild growth, frequently measured as penetration rates is a result of the change out of wired sensor networks for wireless ones. In addition, the wireless networks have a broader reach than the wired ones did, spurring market extensions in a variety of applications, some not even thought of so far.

Market growth is dependent on emerging technology. As the wireless technology, the solid state battery, the sensor technology, smart phone technology and the energy harvesting technology all become commercialized, these devices will be used to implement wireless sensor networks. The semiconductor wireless sensor networks markets will be driven by the adoption of 9 billion smart phones by 2020, creating demand for apps that depend on sensor networks.

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