The Future of IoT
Mobile World Congress brings together thought leaders in technology from around the globe. The side conference 4 Years From Now is held with the objective to connect promising startups and founding partners. Apart from upcoming companies pitching their ideas and showcasing their prototypes, panel sessions are held on topics as diverse as women in tech and the future of technology, or how 5G will influence how we interact with mobile technology, or what the Internet of Things (IoT) will look like four years from now. These are just some of the session titles discussed at the conference center in Barcelona.
During the 3-day event, our CEO Ignasi Vilajosana was joined by three fellow IoT giants to share their opinions on the future of the Internet of Things:
Nick Burton (@nick_burton), Chief Information & Digital Officer, Belron, UK
Alberto Cresto (@AlbertoCresto), Associate, Momenta Ventures, Italy
Ignasi Vilajosana (@ivilajosana ), CEO of Worldsensing, Barcelona, Spain
Marc Pous (@gy4nt ), CEO of The Things IO, Barcelona Spain
People who frequently visit Mobile World Congress know that four years ago, IoT was the shiny new thing everyone highlighted and expectations were high. Gartner first recognized the IoT as a technology trigger in their Hype Cycle for Emerging Technologies back in 2011, estimating that it would reach plateau in five to ten years. It was from 2014 that people started noticing a number of IoT platforms emerging in the market, but while IoT has already overcome its technology trigger stage and saw its peak of inflated expectations in 2017, it still remains to arrive at the “trough of disillusionment” and “slope of enlightenment” to eventually reach the plateau of productivity. As reality sets in and the IoT platform market consolidates, former expectations are adjusted and leading IoT players and standards emerge.
Using IoT in Consumer and Commercial Contexts
Belron is one of the leading vehicle glass repair and replacement companies. With a fleet of 9,000 services vehicles, 13,000 technicians who use 30,000 tools and over 9 million parts, Nick Burton, Chief Information & Digital Officer, can imagine many ways to leverage IoT technology within his organization:
- To connect the company’s own vehicles to the IoT and track routes and other KPIs to improve fleet management and feed experiences with glass repairment cycles back into the organization and embed this vehicle knowledge into the Customer Experience.
- To place sensors on windshields to monitor behavior.
- To – essentially – receive the right data at the right time and make the most out of it.
While Burton sees a lot of potential, certain barriers to fully adopting IoT in organizations still exist. In the future, we may find:
- Access to IoT technologies will be less difficult. It is currently costly and complex to manage connectivity.
- We will experience a trend toward subscription-based models. For this to happen, the interoperability between devices has to be a no-brainer. Developing technology based on a microservice architecture could pave the way. For the time being, it remains a challenge to set up and configure solutions and inconsistent standards make integration of IoT solutions hard.
- Low-power networks which cover wide areas (aka LPWA networks such as LoRa and Sigfox) are enablers for this development, but Burton would love to see them expand even further to something he calls “Sigfox on Steroids”.
- Being able to deploy IoT hardware quickly and easily through a plug-and-play approach will also accelerate the market adoption of IoT products and solutions. At the moment, most IoT hardware is expensive.
- Last but not least, IoT will continue being the foundation for developing creative ideas and new concepts to create products and grow businesses.
Trends for investing in IoT and IIoT
Momenta Partners is an international VC focused on the Industrial Internet of Things (IIoT). The globally active company invests in early stage “Connected Industry” startups. While they see IoT today being about connecting devices and assets to the internet, Alberto Cresto, Associate at Momenta Ventures, believes that:
Four years from now we won’t be using the term IoT any longer, but will be talking about “connected industries” instead.
While the market for IoT platforms is already consolidating, he sees the area of predictive maintenance and remote asset management as being the next to mature. We will pass the hype stage and will enter the incubation phase where we will see true ROI being generated. Four years from now, however, the VC industry will still fuel IoT startups as VC is about giving advice and having domain knowledge.
In general, Cresto identified eight IoT trends for 2018:
- Augmented reality will get more real in Industrial IoT (IIoT).
- Intelligent edge computing will gain traction.
- Low-power wide-area networks (LPWAN) will gain ground.
- The IoT platform market will consolidate.
- Blockchain will be more relevant in IoT.
- Cybersecurity will remain a “top-of-mind” topic in IoT.
- Growing investment in IoT technologies will drive real ROI.
- We will witness a progress on developing and implementing common standards, but it will take time until we have reached fixed regulations.
Winning the IoT Platform War
With the IoT expected to generate billions of dollars in economic value in the next ten years, companies have been developing IoT platforms with the goal to become the go-to vendor. According to Ignasi Vilajosana, CEO and co-founder of Worldsensing, a globally recognized IoT pioneer, IoT platforms currently show very few differentiations. Although the market is consolidating because some of the big players are trying to impose their own reference architectures, OT, IT and IoT players alike are trying to establish their own vision to determine IoT platform standards.
Vilajosana believes that:
The barrier for adopting IoT technologies is not created by the lack of available IoT technologies, but by the hesitation of organizations to adopt IoT products and solutions.
Due to the lack of determination on the part of boards of directors who don’t push for digitizing their organizations, IoT adoption is slowed down in general. Their hesitation is based on not having a clear idea about the cost-benefit ratio IoT implementations could bring to their companies, due in part to the fact that IoT vendors are still failing to highlight and sell the improvements IoT could offer. But if company boards are not willing to take the risk and push for it internally – who will?
Due to missing common standards and an ROI validation, many companies have started to co-develop IoT products and solutions to share and reduce risks. The issue many are facing is that while most IoT platforms can connect any kind of object or data source, they don’t generate value for customers because they don’t solve their problems. This is why we will see a rise of Operational Intelligence (OI) solutions in the next couple of years, because they address specific business cases and tangible pain points to deliver operational value.
Vilajosana believes that four years from now, the IoT will bring about the following developments:
- The market will further consolidate due to tangible use cases which will prove the ROI of pilot projects and will enable full deployments.
- We will see an increased focus on pain point solving and IoT solutions being built around these pains to solve them.
- While currently, only about 5% of IoT technology providers offer outcome-based contracts, this number will increase to approximately 20% by 2020.
- Vendors will need to continue building strong ecosystems where every partner offers specific domain knowledge and has a deep understanding of their respective field.
Why is no-one building open platforms?
As the panel discussion moved on, the audience was keen to find out why no standardized open platform architecture is being built to ease operational issues customers are facing. Vilajosana pointed out that:
Driven by the IoT platform war, everyone is fighting for a different standard – their own standard.
Commercial platforms or current B2C IoT technology are not mature enough to drive this process. It will be interesting to see how this topic will develop in the coming years.
Why are there no IoT unicorns?
While Silicon Valley and internet-related products and solutions bring about a vast variety of unicorns (startup companies valued at over 1 billion USD) the IoT is developing at a different pace. As opposed to the straightforward internet world, where developing apps or setting up e-commerce platforms can be done by one single company or a startup partnering with different corporations to realize their concept, IoT players need to build an ecosystem of equally knowledgeable and experienced partners to deliver real value.
Having to use partner ecosystems to deliver a project makes market access and generating value a more complex undertaking.
At the same time, deploying IoT products and solutions requires taking into account the legacy systems customers are using. Providers can’t expect companies to replace all of their devices. They need solutions which allow for the integration of both existing systems and new data sources in order to adapt gradually. The key will be to foster interoperability between devices and systems to generate easy of use for end-users.