Blue Dots Partners

I was never very good as a California surfer but I was “stoked” every time I dropped into a wave. And terrified when I found myself being rolled underwater, not knowing which way was up or how long I would be down. Not all that different than surfing huge technology waves over the past thirty years such as personal computing, networking, the Internet, social media, and mobility.

These giants don’t come along often. We’re lucky, though, because each of us has the opportunity to ride waves that have started breaking already and new ones that will form for decades to come. Those waves are IoT. There has not been anything bigger yet in tech. IoT is important in some way to almost everyone – vendors, businesses, and consumers– and is not something anyone can afford to sit out. Gartner named IoT one of the top ten technology trends for 2015 and believes it has “a prolific impact on people’s lives and on fundamental operations of businesses” [1]. For 2016, IoT Platforms are in Gartner’s top 10 and play a prominent role as part of multiple other top trends [2]. IDC expects the total IoT market to hit $3 trillion by 2020 [3]. McKinsey predicts 30 billion devices by that time [4]. To put things in perspective, it means over 4 devices per human being on the planet.

Ignore the specific numbers and extreme hype and simply accept these predictions as indicators. The reality is that companies by the thousands are investing at every layer: platforms; middleware and messaging; semiconductors, components, hardware, and devices; software; analytics; and more. Vendors are rapidly developing…and repositioning…their products and services to capitalize on a hot category.

Over the next few months, Blue Dots will submit opinions and analyses across a range of topics that we believe will determine the growth of the category and success of participants. A sampling of upcoming insights includes:

• Big Data: Despite the huge revenue in devices, software, storage, and support, Big Data is the ultimate value generator for IoT. It is enterprise and consumer Big Data that provide deep insights, automated process management, extended M2M, and an array of other benefits that are the raison d’être for IoT. The challenges to generate, store, manage, analyze, and act on data are core to the category’s success. What do producers and consumers of Big Data need to do to properly align with the opportunity?
• Security: IoT introduces great value but is also a Pandora’s box, opening the door to security risks and threads that extend across every layer of technology and participant in the value chain. How big of a problem will it be? The fear is real and compelling: 78% of IT professionals say security standards are insufficient; 72% don’t believe manufacturers are implementing sufficient security measures; 84% don’t believe manufacturers make consumers sufficiently aware of the information devices collect; and 73% think there is a medium to high likelihood that a company will be hacked through an IoT device [5]. It’s not only IoT data in healthcare, military, and financial applications that matter. IoT opens the door to personal, organizational, and governmental data breaches in as many ways as there are device and service offerings.
• Privacy: What will the industry do on its own to establish and communicate privacy policies versus waiting for a backlash and potentially heavy-handed government compliance mandates?
• Standards: A range of protocols and standards will be required to enable an IoT world. The number of standards bodies and initiatives is daunting and the timeframes for adoption are in doubt. Will the pace of adoption in IoT exceed or lag what we have seen in other tech waves? Even accepted standards such as MQQT and IPv6 need time to achieve sufficient adoption. For every traditional group such as IEEE that is skilled at producing standards, there are multiple organizations driving their own proprietary interests.
• Government regulation: Security measures, privacy policies, sensor data, encryption, public data systems, smart meters, and mobile devices are just a few examples of IoT elements that will eventually be scrutinized and potentially regulated. In the U.S., how will the industry address both the letter of the law and also the likely variations across local, state, and federal agencies? How will legislation by the EU and other international entities impact vendors and consumers of IoT?
• Support: Whether at the industrial or consumer level, how will this blossoming set of products and services be supported and who will do it? Can we count on vendors to, for the first time ever, avoid the finger-pointing that dominates the connected consumer sector today? Can new support technologies make up for what vendors fail to do?
• Show me the money: It’s fun to talk about all the predictions and components of IoT but where is the money in the market today? Who are the early adopters with money to spend? What are the killer apps and new devices not even imagined today that will drive stages of adoption? How will the market evolve? In the long run, who stands to win and who is likely to lose?
• Where is the design center for IoT? Will IoT stall because it is another engineering-driven set of products or will vendors figure out how to be customer-centric and align product development and sales with their target customers?

Watch for our upcoming series of blogs. Feel free to pass along our commentary to anyone who may be interested. Let’s enjoy every minute riding this monster wave!

Aligning for Success™

[1] Gartner Group, October 8, 2014.

[2] Gartner Group, October 6, 2015.

[3] Forbes, April 9, 2015.

[4] McKinsey & Company, “The Internet of Things: Sizing up the Opportunity, 2014”.

[5] ISACA 2015 IT Risk/Reward Barometer.