Next year, IoT-related conversations will everything from augmented reality to machine learning to voice recognition, according to three industry experts we spoke with. While the field of IoT companies ballooned in 2016, a handful of winners will likely become evident in 2017. Here’s their advice on how to stay competitive in a maturing marketplace.
1. A Long-Tail Approach to IoT Takes Hold
THINKstrategies believes organizations can jumpstart their corporate IoT initiatives in 2017 by turning around the “long-tail” idea. “For many organizations, the IoT idea is too big to gain momentum until corporate decision-makers are more confident with their IoT readiness,” says THINKstrategies' managing director, Jeff Kaplan. The big ‘transformational’ idea of IoT will only gain acceptance after a series of small initiatives are successful, he says. “Therefore, corporate executives should focus their attention on narrowly defined IoT pilot projects that enable them to test their long-term business objectives and uncover the key technology requirements necessary to scale their efforts.”
2. Transitioning to Connected System of Systems
Smart, connected products may be revolutionary, but they aren’t exactly new. IT has already become an integral part of many products, as Michael E. Porter and James E. Heppelmann note in Harvard Business Review But as organizations gradually install more connected products, there will be a growing need to link the data streams from those products together and to determine how the data interrelates. Many enterprise companies with IoT implementations will begin to shift how they think about connecting things, changing their focus from unitary smart connected products to systems of systems. Expect organizations to step up and demand ownership or control of data from these networks, says Don Deloach, president and CEO at Infobright, a data analytics firm.
3. Battles Over Data Ownership
The notion of data ownership will remain murky in 2017, says Chris Kocher, co-founder and managing director of Grey Heron, a consulting firm in San Francisco. In fact, tussles over data ownership and rights—as well as privacy concerns—are already causing many technology partnerships and deals to stall, Kocher says.
4. Machine Learning Secures Its Spot in the IoT Spotlight
“Machine learning comes up in almost every conversation I have on technology,” says Don Deloach. And for good reason. The technology is the holy grail of the Internet of Things, he says. “Once you incorporate good machine learning into your IoT environment, you create the ability for adaptive systems. The uptick in terms of productivity and capability with adaptive systems is astronomical.”
Machine learning plays a key role in what Deloach terms an analytic workbench. “The way I characterize the workbench, it includes four basic items: operational analytics to understand what is going on, investigative analytics to understand why it is going on, predictive analytics to understand what will be going on, and machine learning,” he says.
Consider the impact of adaptive systems in healthcare. Eventually, machine learning tools could be used to monitor the state of your body and respond with therapy recommendations tailored to your specific genomics and lifestyle factors. “Machine learning will have a place in a lot of different industries, certainly industrial and automotive,” Deloach explains. “It is going to be pretty widespread.”
Machine learning algorithms could also be used for city management to, say, monitor congestion and help prevent conditions that could bring traffic to a standstill.
5. Voice-Powered AI Gain Ground for IoT Applications
There has been quick progress in the realm of voice-powered, virtual assistants, thanks to competition amongst Google, Apple, Amazon, Microsoft, and Samsung. Kocher sees such platforms driving the next round of IoT platform wars. In the near future, such platforms will be used to control functions in cars, appliances, and machinery.
6. Either the Industry or Government Will Take Action on IoT Security
Security professionals have been complaining about the sorry state of IoT security for years but, following the Mirai botnet attack that temporarily shut down a swath of the Internet, more people are sitting up and noticing.
Unless something changes, we could see repeat attacks with potentially worse consequences. Hardware devices could be ruined, says Chris Kocher, or people could get hurt. Gartner predicts that, by 2018, a significant portion of smart buildings will be hit by digital vandalism that could affect devices ranging from HVAC units and thermostats to smart toilets. Such events could trigger an IoT winter, Kocher says.
Ultimately, governments will likely need to get involved to address the matter. Already, FCC Chairman Tom Wheeler has outlined a plan to address IoT cybersecurity but it is unlikely to go into effect before Trump takes office in January.
Nevertheless, the U.S. government will likely formulate plans to regulate the IoT industry in 2017, predicts Don Deloach. “You can see that there is momentum growing. We believe there is a role for policy with IoT security,” he says. “We would like for that role to be largely encouraging and embracing of IoT but outline appropriate safeguards. I don’t think there is widespread recognition that government should be involved.” That will likely change if there are more hacks that bring down prominent websites, cause automotive recalls, or worse.
Other triggers will be technologies such as autonomous driving or the proliferation of connected sensors in healthcare. “As IoT makes its way into healthcare, the public policy will need to adapt to accommodate,” Deloach says. “And as we move towards autonomous driving, there is going to be a whole world of legislative priorities that need to be contemplated first,” he says. “I think that from a practical standpoint it is inconceivable that we won’t see more of an emphasis on IoT policy in the U.S. and globally.”
7. Survival of the Most Practical IoT Platforms
At this point, there are seemingly too many IoT platforms to count—and certainly too many for the market. In 2017, there will be a winnowing of the field—much as there was two decades ago when there were dozens of internet search engines vying for an audience, says Don Deloach. Ultimately, only a small handful of those search engines succeeded. The situation will be similar with IoT platforms, Deloach says. “There are 700 IoT platforms in the market right now. We are not going to have 20 winners. We might have 3 or 4,” he says. While it won’t necessarily be clear which platforms survive, it is likely that the field will contract in 2017.
But on one level, the situation with IoT platforms is different than the search engine battles of the 1990s. Already, there has been unprecedented collaboration amongst vendors in the IoT arena, which are forming factions that unit companies with complementary skill sets. Dell EMC, for instance, is partnering with GE Digital, Microsoft, Nokia, SAP, Teradata, ThingWorx, Vodafone, and dozens of other companies. And to cite another example, Cisco is working with Honeywell, Schneider Electric, Accenture, IBM, and many others.
Ultimately, ecosystems will determine winners and losers in the IoT industry, says Chris Kocher. The concept of partnership proved critical in the B2B and enterprise software industries and is even more important with IoT. Without partnerships, an IoT platform looks like an empty shopping mall, Kocher says.
Some vendors will decide to simply acquire the assets they need to round out their IoT offerings, says Don Deloach. “It will become a buyer’s market for IoT companies in 2017, which will be marked by a great deal of M&A activity.”
