In its inaugural “State of the Market: Internet of Things” report, published in 2015, Verizon focused on the complexity of the Internet of Things, the fragmentation of the marketplace and slow adoption. Its sophomore report, which the telecommunications giant released on Tuesday, paints a somewhat different picture, says Mark Bartolomeo, the company’s VP of Internet of Things and connected solutions. “Based on our own research, research from contributors and from Verizon customers,” he states, “we’ve seen a shift away from just talking about [the IoT] and toward [deploying] use cases.”
That is, with one caveat: This is happening in the enterprise world, far more than in the consumer one.
“Enterprises have started completing their investments in open platforms that allow the use of APIs [application programming interfaces] to expose data streams from different service providers,” Bartolomeo says. This allows an end user to manage all data culled from disparate IoT devices and systems in a central place.
Bartolomeo says he has not seen companies in the consumer marketplace make that shift to open platforms. However, he notes, he sees some hopeful signs, such as home security provider ADT‘s new Canopy platform, which integrates connected lights, doorbells, cameras and other smart-home devices into a common platform.
The report indicates that enterprise applications are also seeing the lion’s share of venture support, reversing a trend. Says the report: “According to analysis conducted by our venture capital arm, Verizon Ventures, we estimate that consumer IoT startups raised 15 percent more VC funding than enterprise-focused startups in 2014. However, in 2015, roles seemed to have reversed with enterprise outpacing consumer by around 75 percent. In 2016, we believe the enterprise will continue that trend, but by a much larger order of magnitude—roughly 2 to 3 times more than consumer. 2016 will see enterprise IoT VC funding considerably dominate that of consumer.”
Next Wave: Analytics
For the “State of the Market” report, Verizon commissioned research firm Oxford Economics to survey early adopters of IoT technology. It found that companies are investing in IoT technology chiefly as a means of revenue growth, and that data monetization, enabled by analytics, is among the most promising paths to revenue generation. However, it also found a great deal of money sitting on the table. Only 8 percent of the businesses that Oxford Economics queried are using more than a quarter of the data they collect via IoT networks.
Bartolomeo says predictive analytics services are taking an increasingly important role in the enterprise IoT applications that Verizon supports through its ThingSpace IoT platform. It is especially important in the agricultural and energy sectors, he notes. For example, Hahn Family Wines relies on an analytics engine that marries data from a network of moisture sensors in its vineyards with weather data, in order to ensure that it applies water and fertilizer in the proper amounts—both to avoid waste and to optimize certain characteristics of its grapes.
Data analytics has also been key to the success of machine-to-machine (M2M) deployments in the energy sector, Bartolomeo adds, in which utilities must carefully balance the amount of strain placed on the electric grid to ensure consistent service, and to avoid brownouts and blackouts. Now, analytics based on data collected via the IoT and M2M networks is becoming an important tool for driving revenue in logistics, health care and other sectors that are beginning to adopt the technology.
ThingSpace Update
ThingSpace, Verizon’s IoT development platform, has now reached its sixth month on the market. This week, Verizon is hosting its second ThingSpace developer’s conference. So far, Bartolomeo reports, more than 5,000 developers have registered on the platform.
One of those developers is BuildingLink, which sells a management platform for residential building managers. BuildingLink used ThingSpace to build a smartphone app that allows apartment dwellers to check on the availability of equipment, such as treadmills or washing machines, inside their buildings. This is designed to save residents the frustration of waiting for an open machine. Building managers can also access the network and utilize it to understand usage patterns and determine when their gymnasium and laundry facilities are in the highest demand.
In late October 2015, Verizon announced that it was working with Sequans Communications to offer ThingSpace users a cellular long-term evolution (LTE) modem at a discounted price. The first of these, the Calliope Cat 1 modem, has been available since the end of 2015, Bartolomeo says, noting that ThingSpace users can purchase the Calliope for “less than $15” each. Later this year, he adds, users will also be able to purchase Sequans’ Monarch LTE modem for Category M1/M2 for around $8.
Verizon also announced last October that it was building out a new cellular network, known as IoT Core, specifically to support Internet of Things deployments in which nodes transmit small packets of data, such as utility meter readings, in high-transaction volumes. Verizon is still testing IoT Core, Bartolomeo says, and has not yet set a release date.