The Internet of Things Ecosystem: The Value is Greater than the Sum of its “THINGS”

The Internet of Things is more than just Glasses, smartphones and smartwatches. It’s more than just smart cars and cities and other “things” that are connected or understood by today’s usage models.

The Internet of Things Ecosystem: The Value is Greater than the Sum of its “THINGS” image Untitled 3 600x420

By 2020, it is predicted that the entire Internet of Things will have a market value of $8.89 trillion. There are many factors that enable this value to be reached. There is revenue from the sale of Wearables and “things”, there is software licensing, hardware, and the reduction of operating costs in manufacturing, information technology, research and development, marketing and corporate operations.

Research firm, IDC, expects a globally installed base of IoT will reach around 212 billion things by the end of 2020, including 30.1 billion installed connected autonomous things. Intel predicts there will be 31 billion connected devices. Cisco, a notable leader in IoT research and awareness, predicts 50 billion objects will be connected to the Internet. Gartner predicts these billions of connected “things” add economic value will be $1.9 trillion dollars in 2020.

With this many zeros and connected things being predicted by smart people and forward-thinking companies, it’s enough to make a skeptic out of anyone to think that many computing devices and trillions of dollars of market value will be generated in the next six years. Given the advances in smartphones and tablets and Big Data, could the expected market value be underestimated?

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It would be easy, maybe even lazy, for us to think the smartphone will be at the heart of the Internet of Things. With 30.1 billion autonomous things sending and receiving information, and initiating pre-defined manufacturing, marketing or even personal preferences, the smartphone or any other modern device will not be apart of the equation.

In a way, the smartphone is to the Internet of Things,  as the beeper is the mobility revolution. The challenge for marketers, communicators and stewards of brands is to understand getting mobile right today is important to establishing best practices and foundational expertise needed to manage an automated future.

It’s important to understand the different segments that will makeup the Internet of Things ecosystem. After reviewing industry research, corporate press releases and blogs and news reports, the following IoT ecosystem framework was built to reconcile the many IoT announcements.

Hopefully, with this ecosystem framework combined with the IoT use-case framework we can start to rationalize what each new development in the emerging technology trend.

Discuss This Article

Comments: 20

  • Greg Nicholls says:

    I think the real power will be the company that develops integration between established IoT devices. Nodally Technologies Inc. is one such company that is on the bleeding edge of this innovation.

    • I would agree, Greg. If a consumer was to wear a shirt outfitted with sensors, wears a Nike Fuelband and a key fob that allows his/her car to operate and opens their garage door or smart “front door”, it’s unlikely all those sensors will be from the same company or operating on the same operating system.

      But, even more important, there’s a security, data and connectivity issue that will need to be reconciled. Clean and consistent data will be key to realizing the full value of IoT.

  • pragmatechnologist says:

    I’m not a futurist, and don’t claim any special prognostication skills – but my experience would lead me to say that IoT will be a potentially (provided the right pricing, security, and use cases come into place) powerful *enabler*. It will facilitate applications, services and capabilities that will be valuable to consumers and Enterprises. To be more precise, this will be foundational, and generally invisible to most of the population. View it as a natural extension to today’s Internet, really. Just my two cents – from a pragmatic technologist who is (mostly) immune to hype.

  • Stuart Lodge says:

    Hi Matt,

    A great article that helps overview the complexity of the IoT ecosystem and the scale of the opportunity. As you say there are different types of objects, and many will be autonomous.

    In this area SIGFOX is deploying a new cellular technology to overcome the cost and energy consumption constraints associated with connecting high volumes of objects (www.sigfox.com).

    Thanks.

    • Thanks, Stuart. New cellular technology will definitely be needed, especially for activity-based or user-activated automation. Standards are increasingly becoming more necessary as well. Thanks for the note and further information.

  • Niels K. says:

    Great infographic, Matt!
    No doubt IoT is on the roadmap of most semiconductor companies, the primal part of the product value chain, and the forecast opportunity is huge as you depict. But will it happen as expected? Lots of hurdles to overcome (spectrum issues, cost of IoT-enabling electronics, and how to monetize necessary up-front investments in infrastructure…). Benefits of IoT are clear, technology is/will not be the problem but things often take unexpected turns. I remember visiting the Mobile World Congress, where this year’s big theme was also IoT, some ten years ago. Back then, all the talk at the show was that everyone would be watching TV on their cell phones soon. I still don’t, and I don’t see many others either ten years later, if you discount streaming video clips. IoT will happen but possibly quite differently than expected.

    • Niels – I’m in completed agreement. One of the best projects I’ve ever worked on was the launch of FedEx SmartPackage, a sensor-device that could detect light exposure, vibration, moisture, etc., and would be included with high-value, time-sensitive packages…and that was in 2009.

      The other was Apple’s first iPod. I was a campus rep for Apple and when the first iPod was announcement, many Apple users didn’t have “that” much music, as Napster wasn’t available for the Mac up to then. It wasn’t until the iTunes ecosystem proved itself and became ultra-simple to use that the iPod caught on. And, once the ecosystem had scale, it was too crazy to think that Apple could make a better telephone.

      There is a lot of investment and product development coming into the “trend”. Will be interesting to see how the next 18 months to 3 years shakes out.

  • Mark Williamson says:

    Due to revelations advanced by Edward Snowden and others, what about the potention of being hacked by the United States government and other such nations. If I were to become their target, I have just greatly increased my surface area if I am hackable in 212 billion different ways. I would not feel comfortable living in such a world where the NSA existed. Taylored Access divisions would have access to my car, house, PDA, phone, headband, watch and on and on. What a nightmare!

    • Mark – Another wrinkle in your line of thinking is: if you use a wearable device in one country, that data is subject to a certain amount of privacy and protection. However, once you travel to another country, those protections might be out the window. That’s why the Cisco, AT&T, Intel consortium needs to work with government to work out these cross-border data governance issues.

    • Rob says:

      I fully agree here. Not only governments and alike, but insurance companies checking how much time you’re home and adapting ‘magically’ your fees. Also, burglary is getting riskless if they know in advance when you’re about to come home…

  • jtlagrand says:

    Niels K – depending on where in the world you live, you can in fact watch TV on a phone for example Korea, Japan – where the speeds are higher and the costs lower. In the US one could not view more than a few hours of shows/movies before consuming their monthly data allocation. And that’s not even considering IoT impacts.

    In the US, spectrum management policy will be a major factor in the connectivity aspects of the IoT. On its current course, US policy will likely and unfortunately be an impediment to IoT innovation and adoption, because FCC/NTIA/POTUS act too slowly act and make spectrum acquisition costly to carriers and the businesses and consumers who rely upon wireless services.

    In the current scheme of things small players are out of luck with no capacity to compete with cash rich carriers for access to useful blocks of spectrum. The US govt must act to make more spectrum available and do so in a manner that also accommodates participation – even if experimentally or temporarily – to all who want to bring forth new, exciting, and potentially valuable devices, applications, and services for the IoT that rely on wireless connectivity.

    Good article.

  • Bob Jennings says:

    the concept of the IofT is very exciting especially in terms of Smart Grid and building automation. A new company Intellastar have developed the Inferstack platform and embedded advanced analytics that will permit effective management of mountains of data between building and utility systems.

  • Jsink says:

    Matt, check out a little company called Xively. They’re developing the technology to manage all that data. Consider all the little bits of data that have to move between the devices, the cloud and the end consumer. Platforms/Portals designed today aren’t equipped (nor should they be IMO) to digest all this little big data. Somewhere in the process companies need a “filtering” device to gather the data and push critical messages to the end user. That’s where the real value lies for manufacturers and retailers – getting the relevant messages to the user in a timely manner. It’s also the biggest challenge for the integration model.

    The hardware each device needs to communicate will continue to decrease in cost. Evidence of this has been obvious for years as things get smaller and cheaper to produce and scale. Manufacturers can now install wifi in a product and market it at a price that’s attractive to consumers. Case in point, Nest thermostats. It’s making huge headlines right now but considering the technology has been available for 10 years why did it take so long to gain momentum? As you noted earlier, the infrastructure around it has grown to a point where it’s cost effective and above all else, easy to use.

    That ease of use is delivered through development of Apps and smartphones. As we connect the billions of devices and users the management of all that data becomes the biggest challenge and area of development, especially to deliver the content through all channels no matter how we connect. I’ll bet we see a big migration of tech company focus to this area. We even could see some form of a data revolution. It won’t be just devices connecting it will be any company with an online presence.

    Leveraging all that big data in a way that improves your online experience for a bank or clothing retailer for example will change. The days of those shoes you bought online 6 months ago following you around will sunset as the data flow becomes much more dynamic. Feeding a consumer suggestions for other products will happen in a completely different way behind the scenes. The possibilities are endless… I’m getting on board.

    • Rob says:

      This is exacyly why I am really reluctent to this. Your staement ‘little bits of data …. to en from the cloud’. I will never allow my personal data to be stored in the cloud.

      Example: Recently there is big fuzz here in the Netherlands about Samsung TV sets, that send all kind of viewing data to Samsung, even without poeple specifically notifying…

  • Saad Al Naib says:

    How about IoT University vision of the near future since integrate all the elements that is important in changing the digital landscape.

  • Sergio says:

    One correction, it was not Cisco that predicted 50B connections by 2020. They are just copying what they heard some years ago…

    As early as 2010 Ericsson CEO was already stating this:
    http://gigaom.com/2010/04/14/ericsson-sees-the-internet-of-things-by-2020/
    And if you search well, references from 2009 will pop up.
    It’s always good to check the sources.

  • James says:

    Printers, most of which now do wireless, appear to be missing from the wheel at the top.

  • Jill Richards says:

    Enjoyed this article Matt – thanks for writing it. Agree that smartphones which feel so central to our sense of connectedness will be a tiny part of being connected in the future.

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