This report is my attempt to lay down some boundaries about what the “Internet of Things” (IoT) is going to look like. There are some wild ideas out there given that IoT is largely a creation of the marketing department. As real companies start to build real products, there are going to be trade-offs and real-world limitations.
I wanted to look at what really constitutes an IoT module. What will connect the ‘Things’ to the Internet. I think these modules will each have some form of analog interface (a sensor or a switch). They will have some form of digital logic, a topic which looks set to be very controversial. And they will need some form of wireless connection (Wi-Fi, Bluetooth, LTE, many others etc).
Those are all pretty simple things. However, the more I look at the combination of those simple things, the more complex the outcomes. There is not going to be a single operating system or platform to unify all of those devices. Instead, each industry or ecosystem is likely to have its own set of solutions. Just as we talk about “Healthcare Software” or “Human Resources Software”, we are likely to have a “Manufacturing IoT”, and an “Agricultural IoT”. Maybe Apple or Google will wrap up the “Home IoT”, but for everything else I think it is unlikely that we will find a one-size-fits-all solution that we can then label “The IoT”.
This is going to make it very hard to invest. Judging by the multiples being paid for any public or private company with any affiliation with IoT, there is already a surplus of demand over supply of investment outlets. This is also true for component suppliers looking to capture a new wave as smartphone growth slows. Companies going after this market will have to be careful which industries they court and which ‘standards’ consortia they back. Even picking the right ones, will not guarantee a market of sufficient scale to merit the effort. There are too many ways to approach these markets.
Finally, it is important to keep in mind that the overwhelming majority of IoT deployments will have to be retro-fits of existing machines. It will not seem that way at first, but for IoT to truly gain its full potential will require years of work.
I think the ideas behind ‘IoT’ are very powerful, but the reality will take more work than the rosy predictions would lead us to believe.
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