- A nascent ecosystem, lack of standards, emergence of new business models and cost economics remain some key barriers for large-scale IoT adoption.
- IoT challenges will be addressed in time by active participation of tech savvy consumers, profit seeking smart entrepreneurs and innovative enterprises.
Continuing my Demystifying IoT series, in this blog I am sharing some of the key challenges that may inhibit IoT growth or prevent IoT from achieving its potential.
- IoT ecosystem readiness – The IoT ecosystem is still in its nascent stages as various pieces of the ecosystem innovate and evolve. Component OEMs (e.g., sensors, modules, actuators) continue to miniaturize the components, while making them smarter and lowering their power consumption. Wireless providers are working on improving coverage, connectivity, network availability and reliability while building resilience to prepare for a future when billions of devices are connected to the network. ICT hardware, software and system integrators are leveraging adjunct technologies including cloud and big data for data extraction, processing, decision making, triggering events and displaying information through analytics and data visualization. Entrepreneurs are figuring out new services that they can monetize. Finally, regulators still are in early stages of developing the guidelines and policies to address security and privacy.
- Lack of standards – The industry still lacks standards for all device manufacturers to connect, interact and share information with other devices or systems. Traditional medical and industrial manufacturers use proprietary protocols and gateways. However, wireless technology company Qualcomm has launched its AllJoyn open source project, which lets smart devices discover, communicate and transact with each other; this effort has prompted the AllSeen alliance program, a community of technology providers, device OEMs and developers to adopt common standards. Early this year Industrial Internet Consortium (IIC) was founded by AT&T, Cisco, General Electric, IBM and Intel, to promote IoT adoption and usage. IoT solution providers such as Bosch Software Innovations is developing IoT software solutions and platforms to address some of the standardization gaps in the market.
- Emergence of new business models – The true value of IoT may be unlocked through emergence of innovative business and service delivery models. We expect that IoT will disrupt traditional business models as new disruptive models emerge, changing the way enterprises do business, governments handle governance and consumers use services.
- Favorable economics and ROI – The cost of components and IoT solutions are one of the major deterrents to adoption. Some of the traditional sectors – utilities and manufacturing as well as cities have a good business case to adopt IoT solutions, but cost and ROI remain big hurdles. Early adopters are piloting solutions and validating the promises of IoT. However others will wait on the fence until the demand gains scale, bringing down the cost of implementations and the ROIs make business sense.
The challenges to anticipated massive IoT growth are formidable but addressable, as the IoT ecosystem evolves and the market becomes efficient through active participation of tech savvy consumers, smart entrepreneurs and innovative enterprises.