Telecoms & Broadband Business Newsletter - July 2015

Editorial:- IoT transforming product-based economies to ones based on services

The potential of IoT becomes clear if one realises that at this stage 99% of all devices are not connected. Current developments indicate that over time more and more devices will include some form of connection, be it cars, household goods, machineries, smart pills, etc.

This will stimulate the change from product-based economies to services-based economies. It will also further stimulate the sharing economy as ownership becomes less relevant. It is estimated that services generated from IoT will grow to $300 billion by 2020. Some $40 billion of that is estimated to come from health and wellness-related wearables. IoT service platforms that will provide integration and delivery will become increasingly critical as facilitators in this rapidly emerging market.

Interestingly many of the IoT developments that are now starting to occur were developed some 10 to 20 years ago and were discussed at conferences and shown as prototypes at shows and exhibitions.

As with so many ideas and concepts in ICT, it is more than just the technology itself in isolation that makes such developments suddenly and rather quickly move from lab to market. In this case the key drivers are:

• Low cost of connectivity (affordability)
• Cloud computing (low-cost IT)
• Open systems (scale, affordability, mass market)
• Smartphone (currently the major IoT device)
• Opening up of GPS (location data)

Comparing the ideas from the 1990 and 00s with the current products and services that are now discussed and on show at exhibitions, such as connected fridges, self-driving cars and the occurrence of drones, there is no reason not to believe that these prototypes will be turned into real products in another 10 to 20 years, with numerous less sexy applications being developed over the coming years.

For the immediate future the major challenges are:

• Connectivity (operators and device issues)
• Battery recharge frequency
• Device life, particularly in relation to M2M
• Costs of comms modules again, especially in M2M
• Security and privacy issues
• Data volumes (capacity, latency, reliability, security)
• Heterogeneous networks (WiFi, mobile, fibre)

The current economic problems that the developed economies are facing are at least partly due to the fact that we are trying to address today’s problems with technology concepts and structures from the past.

We need to take costs out of the economy in order to increase productivity and stay competitive; and we need to move to e-health and e-education in order to far more effectively address the serious problems that these sectors are facing. Smart transport, smart cities and sustainability in generable require new ways of thinking and a transformation of the sectors and industries involved.

The key here is ‘interactivity’. Far greater participation is needed from individual people – democratisation of systems and services that are traditionally based on ‘doing things to us’ rather than a direct interaction, perhaps best explained by the following examples:

• One-direction healthcare services need to change to services associated with/incorporating the concept of wellness which is basically initiated by the individual.
• Education to learning
• Transport to mobility

IoT and M2M will be key drivers in these transformational processes.