Tuesday, December 23, 2014

IoT Might Be Very Big, But Few Can Say What the Business Models Will Be

With the “Internet of Things” at the peak of its hype cycle, we will all be hearing predictions of non-linear growth. Many forecasts, for example, call for deployment of 20 billion or 30 billion IoT units by 2020.

Of course, a recent survey of executives watching the market admit they lack a clear perspective on the concrete business opportunities. That isn’t as flaky or fuzzy as it might seem. Few would have been able to predict the many revenue models and businesses created by the Internet, either.

On the other hand, any predictions of IoT installed base are close to pure conjecture, if the actual business models cannot yet be fully defined.

A few years ago, some analysts had predicted that, by 2020, the market for connected devices would be between 50 billion and 100 billion units.

None of that is at all unusual. If IoT does wind up becoming a major technology with wide application, the impact will be as profound as observers predict. But big new markets typically grow far more slowly than expected, at first, before eventually becoming ubiquitous.

Of course, IoT hopes are so large because it would propel growth in a range of industries from semiconductors to sensor applications to fixed and mobile communication networks.

Semiconductor executives surveyed in June 2014 by McKinsey said the Internet of Things will be the most important source of growth for them over the next several years—more important, for example, than trends in wireless computing or big data.
Those hopes might be misplaced, though. “For players in the traditional semiconductor market, the Internet of Things may spark some growth, but it certainly will not change two percent industry growth today to the 10 to 15 percent growth we had in the 1980s,” one industry executive says.  

No comments:

Does Technology Cause Growth, or Does Growth Cause Technology Adoption?

A Deloitte survey of 1,300 enterprise information technology executives across 69 countries and 22 industry sectors finds, as do most such s...