Internet of Things (IoT) is the next wave of connected devices after smartphones and tablets, used in both consumer, automotive and industrial settings. Many industry reports and studies are being released to highlight the potential of this new technology trend. According to a January 2016 Forrester Research report, one in five firms globally have already adopted IoT, which constitutes about 19% of the total number of firms. It also states that another 28% are planning to deploy it in the near future. IoT has the potential to create a lot of value for industries across the spectrum – be it manufacturing, logistics, healthcare, or agriculture. IoT enabled processes will not only aid enterprises in reducing costs, energy consumption and downtime of machines, but also improve efficiency and customer service significantly.
Realising the potential of this growing trend, companies, small and big, are betting on IoT. India is also actively focussing on IoT. Government, industries and startups have been very active in this space and whipping up excitement. According to a TechSci Research report, “India Internet of Things (IoT) Market Opportunities and Forecast, 2020”, the IoT market in India is projected to grow at a CAGR of more than 28% between 2015 and 2020.
Thanks to the government’s effort in creating programmes like “Digital India”, “Make in India” and “Smart Cities”, India is steadily advancing towards building a robust infrastructure needed for IoT. Such targeted initiatives coupled with an increased adoption of smartphones are likely to create a mature market full of opportunities for innovation and development in IoT.
The IoT landscape is in its nascent stage in India, hence developers involved in the product development phase are still struggling to bring out products with convincing business models that can support commercialization. Some of the key challenges faced by developers are listed below:
1. Hardware – a new frontier: Developing IoT solutions is quite different from traditional application development and requires a shift in thinking among developers. Creating an IoT solution involves two aspects – software as well as hardware and knowledge of both will be crucial. For instance, open hardware platforms like Arduino, Rasberry Pi and MediaTek Linkit Smart 7688 (based on OpenWrt Linux), have lowered the entry barriers to IoT development.
2. Evolving ecosystem: Regulations governing IoT are undergoing changes frequently to keep up with the breakneck pace of technology developments. An emerging technology landscape always faces this challenge, but things are expected to settle as the industry progresses. The Indian government has been working on a policy framework to develop and guide the growth of IoT in the country.1
3. Making sense of all the data: In the IoT world, tons of information is generated every second by connected devices, attached sensors and other peripherals, and this data needs to be collected, stored, transmitted, analysed and monetized in the right way to be valuable. According to IBM, we have already created 2.5 quintillion bytes of data, ninety per cernt of which has been generated in the last two years itself. With the emergence of IoT, data generation will be in massive quantities. The real challenge won’t be making attractive devices but making sense of this data.Having a comprehensive vision on the information relevant for insights and the process is crucial.
4. Data security & Privacy protections: IoT is giving birth to a new generation of products that will require new security and privacy considerations. Considering the huge number of devices expected to be connected, the amount of information generated and consumed will need to adhere to set security and privacy regulations. Developers need to give special focus on this aspect of development.
The chart below
The Internet of Things has been labelled as “the next Industrial Revolution” and in order to be successful in this new era, developers need to have a deeper understanding of how to bundle a product that matches the market demand.
In short, developers need to be able to understand the business as innovators, customers, as well as distributors.
So now, given the scenario, focusing on the following will be critical for the developers:
- Understanding the market for new products – According to Machina Research the global revenue opportunity for IoT will be worth $3 trillion by 2025, up from $750 billion in 2015. Some of the sectors that are expected to undergo significant transformation thanks to IoT are healthcare, housing, safety and security, transport and automobiles, energy conservation and agriculture. An understanding of the market requirements and ongoing industry trends can provide helpful insights during the stage of product development.
- IoT is a fast-changing, cross-industry phenomenon that is creating a vibrant ecosystem and a global community which can help developers be in sync with the latest in this industry. Many companies are also focussing on developer programs to engage with innovative start-ups and help them grow, including MediaTek with its IoT developer program, MediaTek Labs. Developers have at their disposal a supportive community of experts that can help them build up the necessary skills for IoT.
- Open hardware ecosystems have reduced the entry barriers, attracting more developers across the spectrum, from students and hobbyists to pro-developers. We have noted that anything which reduces the entry barriers and friction, unlocks value in an accelerated way.
- The India government’s supportive IoT policy, an increased focus on IoT at university level, development of centre of excellence and community groups are also helping in the growth of the IoT developer community, which will fuel the next generation of IoT devices.
Business modelling: IoT represents a confluence of the real and virtual world. The business vision needs to be in sync with the times. IoT has the potential to transform products into service. Focus on hardware is necessary but may not be sufficient for successful implementation. Innovative business models will be key to differentiate IoT offerings, e.g. Car insurance “Pay as you drive” or Health insurance “Pay as you workout”.
There are certainly many challenges to face in IoT, but as we can see there is an immense amount of activity taking place worldwide, helmed by both start-ups and large organizations. We have already started to interact with and incorporate connected objects, drones and autonomous cars into our daily lives. Gartner predicted in November 2015 that IoT would grow to 6.4 billion connected units in 2016, a thirty per cent increase from 2015. This number would increase to 20.8 billion by 2020.