Take a look at the current hurdles and success factors facing IoT and IIoT this year, including interoperability, connectivity, and improved analytics.
After highlighting the top 10 stories of IoT in 2017, the IoT Analytics team looked back at the IoT predictions they made a year ago and ventures a prognosis on the 10 things that seem likely for IoT in 2018.
Last year, we made 4 IoT predictions (as part of the 2016 in review article) of which we believe most did turn into reality (Except IoT prediction #3).
These are our 10 IoT predictions for 2018:
Horizontal platforms have been the early winners of the IoT platform wars. The horizontal cloud platforms of Amazon and Microsoft are growing at exuberant rates and enjoy tremendous acceptance in the industrial IoT developer community.
Vertical IoT platforms have so far been playing second fiddle. Even though a number of startups initially focused successfully on specific use cases and verticals, very few of them still do. Most of them now market themselves as a universal IoT platform (e.g., C3IoT initially focused on predictive maintenance in the energy vertical and now markets itself as a general AI/IoT Platform, whereas thethings.io started as a Smart City IoT platform and now markets itself as an IoT platform to monetize all kind of devices).
It seems that, right now, the value of being able to provide a complete tech stack offering and the ability to scale quickly outweighs domain expertise. We see a potential that this may change and the IoT world gets separated into those that believe in the «horizontal» approach and those that believe in the «vertical» approach. Vertical platforms may prevail for two reasons:
Some people cite «domain specific device interoperability» as a third reason. This advantage is, however, vanishing. By now, most horizontal platforms support all major protocols in various industries or otherwise cooperate with gateway manufacturers who do the job in each vertical.
Some firms have already moved a significant portion of their operations to the cloud and many others will follow. Cloud environments provide a number of benefits such as cheap storage, compute performance, and (by now) security. The question remains — which part of the organizational and IoT data should move to private cloud environments and which can go into a public environment?
The answer is mostly a mix of both (hybrid). Rather than focusing on solving the enterprise backend for individual IoT use cases, many IT departments understand that it requires a holistic data and cloud strategy to get organizations ready for the age of massive IoT data. Developing IoT solutions often means that firms require data they previously didn’t consider to be important (e.g., Predictive Maintenance algorithms improve the longer one can look back into past equipment failures).
On top of that, most data scientists complain that a large portion of their job is to aggregate and prepare data. That is why many firms in 2018 will engage in the creation of a unified «data lake» in the cloud that aggregates all IoT and non-IoT data and lays the foundation for future IoT & digital initiatives.
Over the last 50 odd years, China has made a transition from being known as a low-cost low-quality manufacturing hub towards becoming a global technology power. Recently, Apple and Samsung have continuously lost market share to Chinese smartphone incumbents. In other high-tech industries, China has already achieved world dominance, most notably in solar panels.
China was also the first country to announce widespread government support for the Internet of Things (March 2011 as part of the «12th five-year plan») that included specific funding and a set of IoT application demonstration projects between 2014 and 2016. It has since been complemented by China’s new «Made in China 2025» manufacturing strategy.
The cities of Wuxi and Shenzhen, especially, have conducted a large part of these pilot projects with applications such as environmental monitoring, anti-theft bicycle systems, home security, and agriculture product traceability.
Non-Chinese firms like AstraZeneca have also started IoT healthcare pilots. The technologies developed in closed environments are now hitting mass market and are met by actual customer demand. Chinese people desperately look for solutions to fight city pollution levels or enable urban mobility.
IoT-enabled payment solutions and smart bike locks are just two solutions that currently enjoy fast adoption all over China on the back of a very quick roll-out of IoT infrastructure (e.g., New communication technologies by China Unicom and China Telecom and cloud backends supplied by Alibaba and Huawei). We believe that in 2018,7 years after the government first set its foot on IoT, some of the early investments will start to pay off and we will see a number of further IoT projects rolled-out in China and possibly beyond.
When will the IoT market explode? Not yet.
In 2018, enterprise IoT will remain a market made up mainly of pilot projects and tests. Even though we have seen individual success stories in the past years, especially in applications like metering, fleet management, connected industrial equipment, and connected cars the amount of new large-scale roll-outs will remain a fraction of the many pilot projects and tests. The four big IoT adoption barriers are:
At the same time, the amount of firms just getting started on their «IoT journey» will increase further, likely resulting in more pilot projects and small tests for IoT solution providers. These tests are often performed in conjunction with the end-user «build vs. buy» and «platform selection» process.
Don’t be fooled though, as in the last years, there will be success stories we do not hear about. Some firms achieve tremendous value from IoT that they keep to themselves in order to preserve their competitive advantage (e.g., some firms have started to master the combination of IoT and analytics for process control in the manufacturing of specific goods)
For remote IoT devices, there have never been as many connectivity options as today. For years, cellular has been the safe option for connected infrastructure, containers, meters, pipelines, vehicles, and much more.
But there are now plenty of new technologies that promise much longer battery life in the LPWA space. 2018 will show how device makers and end-users adopt NB-IoT and LTE-M, following the network roll-out of several large carriers and whether Sigfox and LoRa are able to sustain their momentum on their low-power area networks (LPWA).
It seems likely that most carriers will end up adopting both 3GPP standards given the only partial overlap on IoT use cases between the two technologies and the low investment to upgrade their LTE network to both (On average a cost increment of only around 20% compared to upgrading to just one).
Some operators are already adopting a mixed strategy with high-end 3GPP standards and low-end unlicensed technologies to further increase their market flexibility. At the same time, the entrance of new players joining the market with other technologies such as mesh, satellite as well as 5G (beyond 2018), is likely going to give device makers that are developing new IoT devices a plethora of choices they have not seen before.
IoT is the enabler for large-scale data analytics and AI. However, so far, very few applications go beyond simple rule management and statistics. There are first exceptions. A railway operator, for example, is using complex neural networks that scan through past data sets and are able to predict rail occupancy with a striking accuracy. Robots are trained to behave autonomously rather than following a set script. Our IoT prediction in 2018 is that we will see more of these trials employing real AI capabilities. One dominant theme is companies moving from rule-based condition-based maintenance to machine-learning based predictive maintenance.
In May 2018, the new EU General Data Protection Regulation (GDPR) will go into effect. The regulation presents a step change in data protection law as it intends to strengthen and unify data protection for all individuals within the European Union.
