How fast is the internet of things (IoT) growing? A recent report revealed that close to 330 million smart devices come into the IoT fold (i.e., get powered by the internet in some way or other) every month. Going by this trend, the total number of connected devices should comfortably cross the 50 billion mark by the end of this decade. Business spending on IoT apps, tools and other related solutions will jump to ~$270 billion by 2020. The 2015-2020 CAGR of the global IoT industry will hover around 20%, which is mighty impressive indeed.
While things are moving forward at a rapid clip as far as IoT is concerned, experts feel that, to date, most of the work in this field has been generic and often experimental. Tech companies have joined in the flow, and have invested resources to test the waters – before coming out with their new tools. 2018 is likely to be the year when these technologies become truly business standard, with many new trends and stats likely to dominate. We will here highlight some fascinating IoT trends for 2018:
Proliferation of connected devices
Back in 2015, there were less than 5 million connected devices in the world. Cut to 2018, and that number is expected to breach 23 billion mark. The exponential growth rate will be sustained, with an estimated 125 billion IoT devices in active use by the end of 2030. Apart from making life easier for consumers in myriad ways (smart homes, connected cars, sensor services, etc.) – these connected devices will emerge as powerful marketing and branding tools as well. Customer data will be seamlessly shared with vendors and service providers – helping the latter to provide more personalized marketing experiences. The importance of customer data will continue to rise in the domain of marketing, and IoT will help in the optimal utilization of such data.
Note: According to a Gartner report, there will be around 8.4 connected devices by the end of this year.
The face of digital transformation
The IoT Barometer 2017-18 report by Vodafone found that, on average, 3 out of every 4 enterprises that have already adopted IoT feel that the technology will be the integral factor for digital transformations in future. The benefits of switching over to IoT platforms will be multifarious – ranging from better workflow management, deeper data insights and generation of untapped revenue schemes, to efficient risk management, real-time collection of ‘mission critical’ data, reduction in costs and significant boosts in general productivity levels. Becoming one of the early adopters of IoT will give companies a vital competitive advantage over rivals. IoT for enterprises is going to gain momentum in a big way in 2018 and beyond.
More specialized IoT initiatives
Up till now, IoT has mostly been about generic hardware tools and software – which have been put to different uses by developers. Things will get more streamlined from the next year, with IoT practices and resources expected to become more specialized than ever before. Digital platforms specifically designed and customized for different industries will start to become available – following on with the ‘design and operate’ principle. Put in another way, the work of IoT developers will become more objective – since they will create such personalized tools and platforms that will deliver the maximum value for their respective industries. The gradual moving out from generic IoT solutions will not hurt the economies of scale from the technology either. Large-scale application of targeted IoT platforms will build both internal and external efficiencies.
Benefits across different industries
With the rapid rise in the variety of smart gadgets connected to the network, the benefits of IoT are starting to get uniformly spread across various industries. Although IoT platforms and middleware still form the biggest component of the smart things market, home automation comes in at a close second – while energy management, industrial automation and smart cities also getting greater operational benefits with IoT implementation. Health and fitness is yet another sector where IoT has immense scopes, as is the retail sector (imagine this: there will be ‘smart shelves’ which will notify sellers whenever inventory levels are running low). 2018 should also see IoT making more inroads in the domains of agriculture, transportation, security and environment management.
Note: A recent Forrester survey revealed that close to 20% of the respondents were already using IoT, while a further ~29% had plans to implement the technology in their infrastructure. Enterprises powered by IoT will also have easier access to startup capital.
The arrival of blockchain in IoT
For all its merits, security is still the weak link of the internet of things. There have been many instances of high-profile data thefts, distributed denial-of-service (DDoS) attacks, ransomware threats and other hacks in the recent past. More alarmingly, software developers feel that such attacks are only going to rise in the coming years, identifying the potential security vulnerabilities of IoT. In such a scenario, it will make a lot of sense if we start witnessing the amalgamation of the blockchain technology (distributed ledger technology, or DLT) in this domain. Implementation of blockchain will ensure that data will not reside in any single location (it will be present in all the nodes of the ledger) – and that, in turn, will mean that the shady hackers will not get a single point of attack. These immutable digital ledgers can be used to manage the huge volumes of connected devices. All aspects of IoT – communications, data storage and handling, processing, and sensory functions – will be managed and recorded by blockchain technology, thereby eliminating single point of failures and establishing a robust ecosystem. By the first half of 2018, there will be some progress of blockchain in the field of IoT applications.
Note: Like in any other tech field, IoT users (homeowners and entrepreneurs and venture capitalists) need to be confident about the technology. Integration with blockchain will be a step in the right direction in this context.
Commercialization of IoT data will increase in Europe
As already highlighted above, IoT will pave the way for more intimate brand/product experiences (tools like Google Assistant and Amazon Alexa have shown the way). For this to actually emerge as an important marketing tool, the data collected/stored by IoT devices have to be commercialized. In the US, nearly 45% of such IoT data are indeed used for commercial purposes. However, Europe lags quite a bit in this regard – with only 37% enterprises in Germany, and 34% enterprises in France commercializing IoT data (other countries are at even lower levels). With the marketing/branding advantages of IoT becoming increasingly apparent, expect a greater shift of customer data commercialization by European businesses. The onus will be both on the companies for responsibly using personal data, as well as on the end-users for deciding the type and extent of data to be shared on IoT channels.
LPWAN and IoT will be a hit pair
IoT applications and hardware place immense pressure on existing cellular networks (in terms of battery performance, processor performance, speed and several other parameters). In 2018, the shortcomings of the latter for powering IoT networks will become fairly evident, and low-power wide area networks (LPWANs) will emerge as a viable alternative. These networks typically deliver excellent battery juice (>10 years), while the endpoint hardware costs are also pretty low (on average, $4-$5). Nationwide coverage is available wherever required (Semtech’s LoRa technology powers countries like Canada, France, Netherlands, Italy, Belgium, and others). The low throughput rates and the top-class coverage (12-15 km in urban locations; less in rural areas) also make a difference. Sigfox is another LPWAN technology that can play an important role in the growth of IoT in the foreseeable future. Narrowband-IoT (NB-IoT) also has its set of advantages.
Note: Low power short range networks, like Bluetooth, Zigbee and P2P wifi will also be important in assisting IoT functions on suitable devices.
Role of AI and ML in IoT will increase
As we near the end of 2017, the focus has squarely shifted on the rapidly expanding capabilities of artificial intelligence and machine learning (ML). Over the next couple of years, AI will be used as a core functionality in many IoT devices (even in households) – to elicit real-time information and commands from the pre-programmed instructions, and function accordingly. Operational effectiveness of IoT platforms will increase – thanks to the secure transactional environment established by the built-in AI modules in them. The predictive thinking powers will help IoT tools (in any location, homes or offices) trigger real-time tasks by studying day-to-day habits and actions. Over the next five years or so, we should see most of our mundane, manual tasks performed by AI-powered IoT tools. We are still some way off from the day when Siri will be able to answer doorbells…but progresses in that direction are being made.
Big data and IoT analytics
The global value of the big data market will soar to $40.8 billion in 2018 (in 2017, the value was $33.5 billion). Fast forward to 2021, and the big data market will be worth well over $65 billion. Usage of advanced IoT networks – with dynamic data sharing and need for actionable insights on demand – is fueling the growth spurt of big data. The existing pool of data scientists will soon be not up to the task of managing the humongous pools of information coming through from the IoT channels – and the need for embedded IoT analytics systems will emerge. From new system architectures and new data types, to machine learning integration and creation of event-streaming platforms (the traditional way of collecting, storing and then processing data will soon be not enough; real-time processing will become necessary) – developers are looking to provide accurate and scalable predictive analysis powers to their proprietary IoT systems in different ways. Identifying, intercepting and acting on crucial business moments is of immediate essence – and in 2018 and beyond, IoT analytics will start to help in that.
Note: Lack of advanced big data skills is a big challenge. With IoT proliferation, demand for employees with high-level big data skills is set to increase by 70% in 2018. In the US, there is already a shortfall of qualified workers vis-a-vis the IoT big data jobs.
10. Voice tech to make IoT smarter
The Amazon Echo smart speaker showed the way, and Google has followed its example by launching an exciting lineup of voice-powered products in October. In general, voice technology is expected to play a big role in increasing the consumer engagement levels with IoT components – and removing all possible frictions in communications between the two parties. The popularity of mobile digital assistants like Siri and Cortana and Google Assistant has already showed that, if done right, IoT platforms with voice tech support will have enormous potential for widespread adoption. For contextual recommendations (regarding, for instance, shopping), IoT tools can start to provide high-quality digital concierge solutions – doing away with the need for users to actually ‘ask’ anything to the automated assistants.
Note: By 2020, voice tech will power close to 50% of all searches.
11. Mounting investments on IoT
As shipments of IoT devices and accessories continue to grow, the total investment level on them also breaks new grounds. By mid-2021, IoT spendings will be only a touch under $1.5 trillion – with manufacturing, transportation and utilities accounting for the biggest investment shares (in that order). Hardware will attract the most investments, although software (with a CAGR of 29%) will be fast catching up (and maybe overtaking hardware in 2021-22). A General Electric report has suggested that IoT will contribute a hefty 10%-14% share in the global GDP figures by 2030. Interestingly, although wearables will grow to the tune of 30.9% by 2020, the segment will continue to be somewhat niche.
Note: Investments on IoT will well and truly pick up pace as the concerns over security are allayed. At present, a whopping 94% business owners (in a survey) feel that industrial-internet-of-things (IIoT) will ramp up security threats, while 51% feel that they do not yet have the tools to counter such attacks.
12. IoT on the cloud
In 2018, more and more businesses will open up their own data centers for deploying custom IoT solutions. However, the growth of IoT deployments on the cloud will be even greater. In addition, many enterprises will take the step of performing data analysis/processing at the edge of the network (edge computing) – to minimize latency, reduce costs considerably, and gain greater value. Implementing IoT remotely on cloud networks will also bring down adoption and maintenance costs, while the processes will become faster, and integrations with other infrastructures will become that much easier. In the next couple of years, big data, cloud systems, mobile and IoT will seamlessly combine to deliver optimized outputs to end-users.
By the end of 2018, the market value of the worldwide IoT market will increase by almost 23.1% on a YoY basis ($1391 billion vs $1130 billion). In 2019, that figure will jump to $1710 billion – clearly underlying the accelerated rate at which this market is growing. Over the next few quarters, the importance of end-to-end IoT device management will also come into greater focus. The time for playing around with IoT is nearly over – and as the technology opens up newer scopes, practical applications of IoT will take centerstage in 2018 and beyond.
Latest posts by Hussain Fakhruddin (see all)
- The $30M Apple-VRvana Acquisition Deal – What You Need To Know - January 11, 2018
- Dreamfactory Case Study – Eventify - January 9, 2018
- How To Make Your Mobile App User Acquisition Strategy More Powerful? - January 5, 2018