The Internet of Everything Chronicle #5
We are well into the second half of 2014 and the momentum behind building the Internet of Everything (IoE) is continuously getting stronger. IoT is now on top of Gartner's hype curve
- at Peak of Inflated Expectations - and they believe it will take 5-10 years until the Plateau of Productivity. But our baby is growing much faster than anything else we have seen before. I stick to my previous view that our baby will be grown up, but still young, 2016 after only three years as teenager.
Good enough technology and infrastructure are in place since a couple of years and when organizations started to go from Powerpoint and plans to trials and pilots we reached the teens. Four things have been missing to leave the teens behind: solid participation from the IT players, a hot M&A market, active and seriously engaged enterprises and efficient easy-to-use prototyping tools for users of IoT.
About a year ago some of the key IT players stepped forward
and joined the creation of the Internet of Everything. I am especially impressed by Cisco, Apple, Google and Microsoft
who all have made significant investments behind their IoE efforts also on the regional and local level while many other still primarily show corporate slides and white-papers. Earlier this year both Cisco and Microsoft became sponsors of SMSE
- our alliance of 28 Swedish IoE entrepreneurs - which speaks to their seriousness and capabilities also in this field. Another sign of strength is Apple's announcement that 29 car makers support their Carplay
solution and that they have paid over 20B$ to developers, more than half of that over the last year.
Over the last few years we have seen some M&A transactions, but they have primarily been in the connectivity part. The module market is now consolidated to a couple of strong players (Sierra Wireless, Gemalto and Telit) as an example. But late last year the M&A market took off when Google acquired Nest for 3,2B$. This surprising move has been followed by a number of significant acquisitions: Google bought Dropcam (555M$), PTC became an IoT powerhouse by acquiring Thingworx (112M$) and Axeda (170M$) and Samsung bought SmartThings (≈200M$) to mention some. And there are many smaller M&A transactions as well. The M&A activity always catch investors attention as one of the key indicators that a market is about to take off, and accordingly we have started to see significantly more IoE activity in the VC community - the 30M$ Series B round in IoT platform company IFTTT is a good example of that.
have been looking at connecting their things for years and some, especially in the trucking industry, have been doing this for a while. But there are very few who went all in like GE
did. GE made their analysis and published their paper on the Industrial Internet
a couple of years ago. They decided to invest 2-3 B$ in two years and created a new company in the group to help exploit the opportunity across their different businesses. Their effort and determination is impressive and I am sure it will pay off very well. Policymakers have pushed the utilities and vehicle companies to move which is great but hard to analyze and forecast since it is markets "doped" by governments. Still players in these markets are quite active and involved which is good. Consumer companies like Nike, Withings and Fitbit
has been selling connected devices for a while and the medtech field is vibrant. Based on my own consulting and relationships with decision makers at large enterprises I see many organizations who by now have identified the importance of understanding and using the new opportunities enabled by the Internet of Everything and have moved into trials and pilots. And industry alliances like AllSeen
where white goods giant Electrolux
just joined is a clear sign of this. After nine moths AllSeen Alliance who push open source solutions for IoE using AllJoyn™
software framework has 63 members including Hier, LG, Microsoft, Panasonic, Qualcomm Connected Experiences Inc. and Sharp
. Many executives remember how they were late to understand and benefit from the Internet and will make sure not to make that mistake this time. Vodafone
predict that half of companies in the Americas will implement M2M by 2016 which is a good example of external predictions supporting my view.
Finally, better tools for rapid prototyping of IoT solutions are coming forward
. It is almost impossible to figure out what will happen when connecting things in a company. It's quite easy to see the immediate operational value from connecting something, normally a combination of gains in efficiency, security and sustainability. But the strategic value based on the data collected is far more difficult to see before hand. This is why an agile approach based on prototyping and real-life testing is vital to enterprises! And the tools for that must enable a working prototype to be developed in days and maybe weeks, rather than months. I invested in Evothings
this summer since I consider their open source tool for rapid prototyping and testing of mobile IoT apps a great answer to these needs.
So which are the key challenges ahead?
I think the single biggest challenge building the Internet of Everything is that any IoT application includes components from at least three industries:
• sensors, actuators and connectivity to collect data and take action,
• IT systems to verify, analyze, merge and manage the data and
• integration to or development of applications for users to take advantage of the information.
On top of that everything is going mobile which is a challenge to enterprises by itself. It is quite complex to develop and take into production a solution in this environment, with industries and vendors having their own standards, libraries and APIs, talking different languages and having different culture. Well working partnerships needs to be developed often with several companies involved, agreements, policies and standards need to be agreed upon etc. Here is a typical example: companies bringing connected products to market need to recruit developers for their libraries and APIs in order to make their products become part of complete solutions and services. Recruiting your own developers will not be a great approach in most cases - who would like to be a Volvo, Nike or Philips Nue developer? Making the connected products available to developers through generic tools is a better approach if one wants a lot of developers to add value to the products connected and include them in many solutions.
Another set of challenges are related to security, integrity and safety. Nothings is really new but the scale is much bigger. Internet security 2.0 is a good way to look at this challenge because it is primarily data related but the points of potential failure are more and the scale bigger.
Entrepreneurs will be the ones bringing most of the innovation and we need to find ways for them to work closer with larger organizations. I will try recruiting larger enterprises as sponsors to our IoE alliance here in Sweden to address this issue. I am also involved in creating a co-working space in Stockholm for entrepreneurs focusing on solutions with physical things involved and we are establishing partnerships with large enterprises to enable closer collaboration. And on the topic of the importance of entrepreneurs the submission for the EIT ICT Labs IoT Challenge which I am project manager for opened today! The winners will receive 40K/25K/15K€ and a lot of support from EIT ICT Labs.
Finally, for Internet of Everything to reach its potential we need everyone involved and we are currently far behind in bringing women along. I believe this is a serious constraint to the development and deployment of Internet of Everything and want us all to invite and support women in our organizations now.
We need to bring in enterprises, provide prototyping and development tools for the Internet developer community and keep an eye at the security issues. The train is running quickly. Decision makers must try understand what the Internet of Everything means to their industry and organization. It's quite similar to when we connected people and businesses to the Internet but this time ignorance will not be an acceptable excuse.