“This will be a watershed year for Internet of Things deployments as practical actions take precedence over hype,” says Laura DiDio, Director of Systems Research and Consulting, Strategy Analytics.
With the Internet of Hype, sorry Things, set to take precedent in 2016 and beyond, is it time for the industry to finally ditch the hyperbole and focus on the facts?
While there is no disputing that IoT will be the defining trend of the next decade - impacting virtually every vertical industry and permeating the vast majority of business processes - many believe the time has come for a clear vision of the future.
That however, is hard to come by. But DiDio, in looking ahead over the next twelve months, is keen to give it a shot.
“Services, security, Big Data Analytics and connectivity, particularly Low Power telecoms, will all play prominent roles as IoT mainstream deployments and usage increases over the next year,” DiDio claims.
Going forward, DiDio believes that merger and acquisition (M&A) activity, followed by “inevitable consolidation: will continue brisk throughout 2016 as large, established vendors strengthen their core capabilities and expand their IoT presence.
“Embedded security, Data Analytics and services enablement will be essential for organisations to realise IoT’s full benefits and economies of scale,” DiDio adds.
“IoT is imperative in the shift from selling products to services and, consequently, a shift from Capex to Opex.”
In 2016, DiDio believes IoT will continue to ramp up as increasing numbers and diverse types of devices become connected, driving a range of ‘as-a-service’ business models.
Among the key drivers in 2016, DiDio believes that security will be a “crucial issue” for vendors, consumers and corporations.
DiDio claims are backed up by Strategy Analytic’s IoT 2016 Security Threats and Trends Survey, which found that 56 percent of organisations experienced a security breach.
However, only six percent of survey respondents were able to identify and thwart hacks in advance.
“In interconnected IoT systems, the risks associated with a successful hack can cause greater collateral damage,” DiDio adds.
“Big Data Analytics is the differentiator in IoT,” DiDio claims.
Strategy Analytics projects that Analytics software revenues will reach $US40.4 billion worldwide in 2015 and double to $US81.1 billion by 2022, exclusive of service revenues.
In addition, DiDio believes that Low Power Trends are “hot” in the market.
As such, Strategy Analytics expects the standardised 3GPP path to Narrow Band IoT via LTE-M with Release 13 to provide real competition to LPWA vendors in the market, offering reduced device costs, reduced power consumption, extended coverage and the ability to handle large numbers of devices.
Mergers and acquisitions
For DiDio, merger and acquisition activity will continue to accelerate unabated in 2016.
Recent acquisitions of Altair by Sony and Jasper Technologies by Cisco have already topped $US1.6 billion and demonstrate that IoT is now table stakes.
Strategy Analytics expects IoT M&A activity could potentially reach the $US20 billion mark in 2016.