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CIOs And CTOs Must Understand How The Internet Of Things Is Changing How Business Is Done

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After a short sabbatical traveling the world looking at interesting technologies and business models, I have decided to return to Moor Insights & Strategy to lead the Internet of Things (IoT) practice. There isn’t a better time to make a comeback!

Panoramio

(Source: http://www.panoramio.com/photo/44229798)

First and foremost, it’s important to remember IoT is not new. In fact, one could argue industrial IoT was invented by stalwarts like Johnson Controls JCI +0.11%, Honeywell, Itron, General Electric GE -3.47% and Schneider Electriclast century through their sensors, meters and other devices used to monitor and manage HVAC, SCADA and other energy assets. What’s changed are improvements in interest, infrastructure and information. While there is considerable hyperbole around IoT, the demand on traditional industrial IoT (IIoT) platforms and infrastructure has never been greater. IIoT is fundamentally changing how businesses manage their critical assets and the data originated from each endpoint. Moreover, traditional IoT is forcing telecom providers, enterprises and cloud providers to change their business models not to just thrive, but survive. Below are a few observations on how IoT is fundamentally changing how business is done:

1. IoT is creating its own ecosystem

By some estimates, there are over 450 IoT platform providers in the industry, ranging from device management platforms, analytics, connectivity, application enablement, storage platforms, etc. My estimation is there are approximately 75 that are financially viable claiming billion-dollar revenue streams, but that is mostly marketing hype. I estimate that over half of all IoT companies made less than $1M in revenue last year, and less than 10% of those had more than $10M in revenue. This leads me to believe three things: 1. there is tremendous interest and investment in nascent IoT startups; 2. the number of real world examples and customer references are growing especially in data and device management, security and automation, but there are few major deployments or references; 3. the big guys like C3 IoT , Cisco Jasper, GE (ServiceMax) and PTC are taking the oxygen out of the room with substantial growth rates and more importantly customer acquisition thereby leaving the smaller firms behind. This leads us to believe there is a credibility and technology gap in the industry.

 

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