The IoT Forecast for 2015

By Mary Catherine O'Connor

Taking a look at what might excite, confound and surprise the IoT industry and end-user community in the year ahead.

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It's been quite a year for the Internet of Things. In January, Cisco CEO John Chambers declared in his keynote address at the Consumer Electronics Show—where "IoT" emerged as a major buzzword—that the IoT would grow into a $19 trillion market in the coming years. In the months that followed, Google made its intentions to capitalize on the IoT known, by acquiring connected thermostat maker Nest, and Samsung did the same with its purchase of smart home device platform provider SmartThings. This fall, General Electric said it had generated $1 billion in revenue from analytics services tied to its Industrial Internet products (which it estimates can save industries $276 billion during the next 15 years). All the while, some untold number of business owners and corporate boards held some unknowable number of discussions about how they could benefit from all this IoT business. And in October, RFID Journal LLC launched IOT Journal in an effort to help answer that question.

So, what does 2015 hold in store? I asked a range of industry watchers and vendors this very question, to get their take on what is likely to excite, confound and surprise the IoT industry and end-user community in the year ahead. Here, based on their input and my own observations, are the highlights:

The Big Opportunities

• THE QUANTIFIED MACHINE: This year, much has been written (and much hype has been generated) about the quantified self, which refers to individuals who use wearable electronics, such as the Fitbit fitness tracker, to count every step taken or better understand sleeping patterns, all with the goal of improving health and performance. For industry, we will likely see more focus next year on what you might call quantified machines, which use sensors to track mechanical health by monitoring things like vibration, temperature and humidity levels, in order to flag technicians when a breakdown appears eminent. This certainly is not a new application, but it's starting to have some real traction within the manufacturing realm. During an event held this past fall, Dave Gutshall, an infrastructure design manager for Harley-Davidson, said that since deploying a sensor network for preventative maintenance at a Harley Davidson assembly plant in York, Penn., downtime due to problems on the manufacturing line "went from hours to minutes or seconds" thanks to the real-time troubleshooting information the sensor network provides. "Before," he said, "machines would break and no one knew why. Now, the minute you see a [problem] you fix it."

• IOT UNDER THE HOOD: Jasper founder and CEO Jahangir Mohammed told me he thinks 2015 will be the year when consumers start expecting connectivity in any new car they purchase. This year, Chevrolet began selling cars with integrated 4G LTE Internet service, but that's just the beginning of the connected car. At the upcoming CES event, BMW is expected to demonstrate its self-parking car application that is operated through a driver's smartwatch—even when the driver is not in the car. And then there's Tesla, which is taking the connected car concept to new heights. Yet, in terms of business applications, telematics, derived not from integrated Wi-Fi but through cellular-connected devices inserted into a vehicle's onboard diagnostic port, are gaining traction across industries, from usage-based insurance models to fleet-management applications that allow companies to track drivers' mileage and driving habits. This data, integrated with traffic data, can help companies improve efficiencies and encourage or incentivize safer driving habits. I think these types of applications will grow in 2015, and there is some momentum behind the use of Bluetooth beacons to support asset tracking or the environmental monitoring of cargo inside vehicles as well.

• ANALYZE THIS: In past years, so much of the focus has been on the falling costs of sensors and processing, it was easy to lose sight of the end game: pulling actionable data from IoT technology deployments. But that is already starting to change, and will become a bigger focus during the coming year, as software companies vie for the job of aggregating, filtering and analyzing sensor data and then packaging it up in a manner that a customer's existing systems can easily accommodate. Cisco is a big player here—especially because it is focusing on selling edge devices that can perform some of the initial filtering and analysis to reduce the torrent of data flowing downstream to the enterprise. But many middleware providers (MachineShop, for example) and IoT-focused service providers such as AGT are really honing their analytics toolsets.

The High Hurdles

• PRIVACY AND SECURITY: It will come as no surprise that privacy and security are the twin issues that seem to be keeping every type of company in the IoT ecosystem, from sensor manufacturers to analytics providers to end users, up at night. While many industrial IoT applications exist in relative security, behind corporate firewalls, there is certainly much work ongoing to secure data. Thus far, no calamitous data breach has been linked directly to an IoT deployment, but it seems only a matter of time before one is. On the privacy front, retailers and marketers are still examining the extent to which consumers are willing to share data through consumer IoT applications. No major hiccups here yet—New York City's "secret" beacon deployment notwithstanding. With cyber security filling headlines of late, however, both privacy and security are certainly top-of-mind for IoT technology providers and users alike. There are no silver bullets here, just a lot of work to be done in terms of how IoT technology is designed and deployed—and even how the hardware is made.

• HELP WANTED: There is a talent shortage across the IoT ecosystem, and it has become a definite problem, says Aapo Markkanen, an IoT analyst with ABI Research. "Some people underestimate how complicated the IoT can be," he told me. "But if you want to produce something commercially viable, you need skills in computer science, data science, analytics… it can be quite complex." Of course, Markkanen is far from the only one who has noticed this dearth of talent. PTC—which points out the especially strong demands for expertise in cyber security and IoT—as well as Cisco and others have launched concerted incentive programs and education challenges in order to foster more IoT talent and build up the pipeline of future IoT hires. It's something business that use the IoT need to think about, too, since having a strong IoT point person on staff can only help in deploying the technology.

The Potential Surprises

• THE UNUSUAL SUSPECTS: Markkanen believes 2015 will bring with it some surprises when it comes to where the IoT is being successfully deployed. He specifically calls out agriculture, logistics and the utility industry as big end users in the coming year. (IoT Journal reported on a unique IoT deployment at a Canadian apple farm, and agribusiness giant Monsanto is making some IoT plays as well.) "You might not necessarily associate those industries with IoT," Markkanen says, "but with relatively minor investments, they'll see major gains in productivity through IoT technology."

• THE HYPE CYCLE IS ONLY STARTING: So much of the discussion about the IoT is really talk about hype around the IoT—especially in the consumer realm. If you think that is growing tiresome, you might need to get used to it, because the hype cycle is really only mid-rotation—or midway up the ski lift, if I may use this new Nest promotion as an example (sorry, Nest, I couldn't help it). I don't meant to pick on Nest, which has been an important harbinger for helping people think anew about how we use and misuse energy. But for every Nest, there are 100 startups that promise to revolutionize a process or product, from our homes to cars to places of business. My mission at IOT Journal is to help make clear the distinction between window dressing and true IoT innovations—and to amplify the innovations that could truly help improve your company's products and services.

I hope you'll follow along as I endeavor to meet those goals. Thanks for reading and supporting IOT Journal. Please let me know what you want to hear more (or less) about on the site. Aside from our daily news coverage, we'll feature a great event in 2015. The first Internet of Things Conference will take place on Apr. 16-17, co-located with RFID Journal LIVE!, at the San Diego Convention Center. I hope to see you there. Here's to a healthy, prosperous 2015.

Mary Catherine O'Connor is the editor of Internet of Things Journal and a former staff reporter for RFID Journal. She also writes about technology, as it relates to business and the environment, for a range of consumer magazines and newspapers.