Is the IoT, the next dot com bubble?
I hope you might have read an article or a social media post with the same title many times since Internet of Things became a ‘Thing’. In fact, many of you, might have even thought, there is too much talk about IoT and it goes on and on forever. Everyone has an idea about smart city implementation or a smart enterprise concept or a connected vehicle which might cause disruption to the technological industry as we know it now and this is true. This is the main reason for this blog too. I am planning to discuss three important concerns surrounding IoT which are
1) The current role of IoT in the tech world.
2) Is there a need to fear about a IoT bubble burst?
3) What is to come from IoT in 2021 and beyond?
The current role of IoT in the tech world:
Internet of things is a multidimensional array of connected devices performing to their best, through real time data collection, learning and adaptation using artificial Intelligence and finally optimization, prediction and control using data analytics, leading to increased value, ROI and productivity in overall.
The ‘Internet’ in IoT refers to connectivity using network infrastructure, communication protocols defined in OSI model, domains and websites linking the physical and virtual worlds. The ‘Things’ in IoT refers to
· Physical devices including sensors and actuators,
· Raw data collected and stored in the Public and Private cloud,
· Hardware embedded in the devices which runs the software
· IT and AI software which analyzes the collected data.
Connectivity has been in existence for a few decades through M2M and so what makes IoT bigger and different than M2M?
The answer for this question is its extensive reach and its control over variety of protocols, domains and applications. The amount of connected devices recently reached 20 billion in numbers and this pervasiveness of this technology is what has made many IoT gurus to name it as one of the facilitators of the digital transformation trends in the current decade. The reach of this technology is going beyond laptops and smartphones to connected buildings, connected cities, wearables, autonomous vehicles, smart grid and supply chain.
In fact, the IoT has done maximum contribution in 2018 and 2019 in healthcare too, through connecting patients and medics. As per a recent IoT Analytics survey report, the business opportunities are varied in varied applications. Smart homes and smart buildings are leading now with healthcare and wearables closely following behind. As the numbers increases 90% of the management executives understand the vital role of IoT in the operations of the organization. The various IoT devices which have been increasing in numbers are Smart home devices including Smart TVs, smart speakers smart refrigerators etc., smart enterprise IoT devices including desktops, smartphones, Tablets and other internet gadgets.
The current combined market size of IoT is around 520 billion US dollars. Top industries for the IoT are general manufacturing amounting to $119 billion in spending, process manufacturing ($78 billion), transportation ($71 billion), and utilities ($61 billion). For every field of IoT applications the focus is different. For example, the focus of the manufacturing sector is on projects to support asset management, the focus of transportation sector is on freight monitoring and fleet management, in the utilities sector, the focus is on smart-grid projects for electricity, gas, and water, while in healthcare, it is patient health reports and predictive medicine. Current consumer IoT spending is about $108 billion, making it the second largest industrial segment, and it includes smart home, personal wellness, and connected vehicle infotainment. When analyzed on use case basis, the financial investment for the year 2019 is led by manufacturing operations with $100 billion expenses.
This huge numbers, investment, focus and priority makes many to assume this technology as a ‘job grabber’[UC1] , as the total number of people who understand its benefits are a meagre percentage in the tech sector. Nonetheless, I can vouch you, about the recent advances in the IoT sector and IoT’s potential is being understood slowly, besides the ‘explosion in numbers’ is not 50 billion, as expected in 2012, but it is still enhancing its reach and its impacts on our everyday life.
Is there a need to fear about the an IoT Bubble burst?
Not at all, if we are planning it right. This is not my answer, this is the answer of many professionals to whom, I happened to ask this question. IoT has many benefits to the users than to any one, besides being the most interested form of new technology for the last five years.
1) Understand the scope of the project and plan accordingly. This includes the technological and business side both. Good plan is always followed by a superior implementation, eventually leading the product or the process to success.
2) Investors are an important part of any business and it’s true for startups and SMBs too. So realize their significance and keep them informed. If your projected planned time of completion of a project is 3 years then add up another 60% cushion and give the completion time as 5 years to your investors, because disruptive technologies takes longer to deliver than the conventional one. One example — Tesla.
3) Besides, being the most widely talked technologies, AI and IoT are not easy to understand or implement, unless you have the right background to carry out the same. If your plan is to execute a new product or process using these two technologies, do not venture into it without gathering enough background information about the same. Say for example, if you have a civil engineering degree, consult an electrical engineer for planning glitches and implementation pitfalls, before you pitch your idea of connected homes or connected enterprise to your investors.
4) All your motives, should be value driven. ROI is a must when it comes to any investment. If your product does not generate value it will lead to a burst, irrespective of how much noise it might have created. Hence do a thorough cost benefit analysis before going into any project.
5) Risks are high for any startup and they are super –high when the startup deals with disruptive technologies, because people are afraid of any disruptive technology which might/could make a change to their jobs, career or livelihood. Do a risk analysis when you’re pitching your business to your investors, because investors do not like to put their money into business which does not identify the market potential.
6) If the risks are high, obviously it will be, give a detailed plan of how business continuity will be ensured in the event of a business interruption through an unexpected incident, which might lead to a loss. It is not enough to list up all the risks but it is a must to show how well prepared your business is for a high risk scenario.
7)Procuring the investments is just the start for any startup, including IoT and AI startup. Do not celebrate too big, by throwing a party as soon as the investments are procured, because the investment money ensures the smooth flow of goods and resources into the business, but does not ensure the success of the business. The success is guaranteed by a good team and their design and implementation strategy. After all, people are the biggest asset to any organization and it is more so when it’s a startup.
8)If your product launch is successful and your orders are flowing, deliver it fast. Don’t try to carry on orders for the consecutive year, if it’s supposed to be finished the same year. As they say, ‘Make hay while the sun shines’, because it is quite likely someone else might come up with a better idea and a promise to deliver better products immediately.
9) Once the first batch is completed, delivered and installed, do not start planning for the IPO immediately, instead, procure more private investors through partnerships, because IPO can wait. Public investments come with drawbacks such as restrictions, regulations and penalties from Securities and Exchange Commission (SEC) and it is necessary to put together a good corporate law team to focus on the same. So, no IPOs till a good company law team is acquired to take care of all the eventualities of an IPO.
10) If you have made enough noise, enough money, enough customers and a big multinational company looks at your organization as an asset and comes with an offer, do not give in easily. Negotiate and get the best price as mergers and acquisitions bring in lots of money, but it takes you as far away from the pleasure of watching your brain child grow.
11) If for some reasons, the company stocks go lesser than expected during the IPO, don’t panic, markets are meant to be rampy, flaky and offhand. One day it might be bad, next day extremely good. Hence, try not to lose hope, if one day, the US Markets or the Asian markets lose 3.00%, there is still a possibility of a rise of 8.00% in the coming days. After all such big falls are simply due to panicky and unpredictable nature of the investors, more than the political and the social scenario.
What is expected out of IoT in the future?
Based on Moore’s, Metcalfe’s and Watson’s law, it can be stated, as the number of IoT devices grow, the cost might drop and the value might increase, to those organizations who are willing to gain knowledge in order to adapt and transform. As per Mckinsey Global Institute’s reports, IoT business will reach 6.2 trillion in revenue by 2025. The prediction for number of devices is 38.6 billion in 2025 and 50 billion in 2030. Some segments (such as connected computing devices) are expected to incur low growth or decline, while others (such as media devices) will continue to expand steadily. The wearables and connected vehicles are expected the maximum growth, but still the volume of growth is unpredictable and might change as the demand grows in pace with the regulations and technological innovation. The concept of smart homes, which gave the starting push to other IoT sectors, with fancy voice enacted motorized drapery systems and sound enacted light switches and thermostats, is expected to be the fastest growing segment in the next few years, driven by further rapid growth in smart home adoption, particularly in as-yet untapped regions.
The 2019 Gartner report on IoT predictions for 2020 and beyond, concludes that the IoT revenue opportunity remains uncertain, particularly for service providers and advises, those companies looking to benefit from the IoT, to consider and prioritize their target segments, business activities and revenue models. The functioning and operation of IoT ecosystem is predicted to see more research in order to understand operating aspects of the various stacks to meet the ultimate future needs of the customers while at the time, increasing the revenue, efficiency and productivity of the organizations. AI is expected to become more pervasive and will have a greater influence on IoT functionalities and creating IoT platform bundles. Data analytics will get a boost with the growing number of devices and prescriptive analytics will become the focus. There will be a huge opportunity for hardware manufacturers and other technology providers. As more and more people start using IoT devices, the 5G deployment will also see plenty of improvement in the form of connectivity, security and application protocols.
To summarize: In the future, IoT is expected to touch every aspect of our life- at home, on road, at work, at shops and everywhere. This device explosion might have a say on how businesses run their organizations, how manufacturing does their assembly line, how hospitals take care of their patients, how schools and Universities teach their students, how retailers and wholesalers serve their shopping communities, how security and privacy of the individuals data will be protected, how the law enforcement departments enhance their work using facial recognition and finger print recognition, how utility companies support and connect their customers’ needs, while autonomous vehicles on road and on air will transport us and our cargo across the cities of the world while we sit at home and workplaces served and entertained by AI based robots.
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[UC1]It is true , as in any new technology or automation, there will be job losses. There is no doubt on that. But there will more new jobs as well. Think of it this way, “When steam engines were introduced, horse carriage drivers lost their job, but do you know who got those jobs, That’s right, steam engine drivers. For every 5 carriage drivers who lost their job, there came 5 jobs in the name of engine driver, engine helper, ticket handler, ticket checker and station manager. Not to mention the jobs lost as horse carriage makers are doubled in the form of engine designer, carriage designer, engine manufacturer, assembly workers, delivery managers and more.
” For more info, refer to my article on linkedin.com, published on Feb 5, 2018, titled, ‘AI & IoT — Disruptive Technologies?’ The link for the same given below.
