Juniper Research has revealed that the number of IoT (Internet of Things) connected devices will number 38.5 billion in 2020, up from 13.4 billion in 2015: a rise of over 285%.
While IoT ‘smart home’ based applications grab media headlines, it is the industrial and public services sector – such as retail, agriculture, smart buildings and smart grid applications – that will form the majority of the device base. This is due in no small part to a much stronger business case for these types of applications.
Michelin and John Deere, for example, have successfully transitioned their businesses towards being service based companies through the use of IoT, as opposed to their previous incarnations as product vendors.
The new research, The Internet of Things: Consumer, Industrial & Public Services 2015-2020, found that while the number of connected devices already exceeds the number of humans on the planet by over 2 times, for most enterprises, simply connecting their systems and devices remains the first priority.
‘We’re still at an early stage for IoT’, noted research author Steffen Sorrell. ‘Knowing what information to gather, and how to integrate that into back office systems remains a huge challenge.’ Additionally, inter-operability hurdles owing to conflicting standards continues to slow progress. Nevertheless, there are signs that standards bodies and alliances are beginning to engage to overcome these hurdles.
According to Juniper Research, the IoT ‘represents the combination of devices and software systems, connected via the Internet, that produce, receive and analyse data. These systems must have the aim of transcending traditional siloed ecosystems of electronic information in order to improve quality of life, efficiency, create value and reduce cost.’
The research notes that the IoT, therefore, is as effective as the sum of its parts. Mere connections create data; however, this does not become information until it is gathered, analyzed and understood. The analytics back-end systems of the IoT will therefore form the backbone of its long-term success.
The consumer segment (composed of the smart home, connected vehicles and digital healthcare), represents a high ARPU (average revenue per user) market segment. Meanwhile, the industrial sector (composed of retail, connected buildings and agriculture) will enable high ROI (return on investment) through IoT projects, owing to more efficient business processes.