A couple of weeks ago we launched the open source solution to put apps and app stores on any smart device. So this is a perfect moment to talk about what the future of the Internet of Things will look like.
Hardware and Software Acceleration
Up till now you had to be a hardware and software expert to innovate in IoT. Sony is an example of a big company that is a hardware innovator but struggled to make the transition to software-driven TVs. Amazon is the example of the opposite. By separating hardware from software, the IoT revolution will accelerate and walled garden solutions that are not cutting edge in both software and hardware will suffer.
Micro-servers are the size of a credit card but at a price of a good restaurant meal and 5 to 20 times better than the first Google server. Imagine their prices dropping to $5 or even $1 at scale. Now imagine having thousands of apps for each device that is powered by a micro-server. Finally imagine this smart device talking to thousands of other devices and proximity clouds as well a public clouds. These smart devices can have gesture control, voice control, virtual reality screens, 3D vision, 4k cameras, thermal sensing, GPS, body sensors, and lots of other sensors. Backed by a virtually unlimited cloud store that can do real-time big data predictive analytics and machine learning in a distributed fashion. Thanks to Bitcoin’s block chain, distributed solutions that are not centrally controlled are possible. Docker and containers allow cloud-based IoT solutions to be continuously deployed. 3D printing will accelerate customized solutions and over time lower production costs. So enough innovations to keep everybody busy.
IoT and business innovations
Lots of companies I speak to belief that platforms and hardware will make money. The bad news is that only Foxconn type of companies will be able to make money by producing extremely large quantities at ridiculously small margins each. Platforms will be open source so only a small number will get enough adoption to make money. So how can you make money with IoT?
For now consultancy but this will fade when the market matures. An obvious alternative model is apps and app stores. The cloud offers SaaS and pay for use software models that are likely going to be successful in IoT. However the big market opportunity is about substituting obsolete reactive maintenance businesses by proactive predictive maintenance, long tail B2B and B2C service marketplaces, broker models, pay per use service models, p2p/crowd models, etc.
Lots of traditional industrial companies have business models in which machinery is sold with a medium to low margin but maintenance and optional services have extremely high margins. These margins are protected through proprietary technology. In an industrial IoT market existing infrastructure will unlikely be substituted, a.k.a brown field market. Nimble competitors will offer ways around traditional models by creating translations between proprietary systems and general purpose IoT micro-servers that can be controlled remotely.
Future use cases
Home automation will be the most visible and trendy but industrial IoT will be the money maker. Telecom operators will present lots of sim-based use cases but unless they change their way of rolling out new services, success is doubtful for most. The connected car will likely use your mobile unless data contracts become extremely cheap. Health will see lots of solutions. A new market of over-the-top health solutions will emerge in which people will get health services from medical staff that can be on the other side of the world or even provided by a computer. Security and surveillance will be one of the most widespread IoT solutions given that the price of IP cameras has come down dramatically and security solutions have become easier to use.
Drawbacks of IoT
Standards are not important. Adoption will decide what is the standard. Not a group of pseudo-experts. However unless use cases don’t have enough widespread adoption across industries, you are likely to find islands of competing standards. Making global role-outs harder.
Security is key. Nobody wants to be the company that killed through IoT. Unfortunately it will happen in the next 24-36 months because security is extremely complex and somebody will cut corners.
Privacy is becoming critical. Google knows you are getting a divorce before you. But with IoT, your smart watch and big data analytics will know about your chances of starting an affair before you even talked to the other person.
Legally there are many areas of IoT that will be extreme challenges. Bad people are good innovators because they need to stay a step before others not to get caught. Also IoT conflicts will become extremely challenging to solve when services and solutions are used from the other side of the world.
Substitution of people by machines is a worry. Lots of people are in obsolete jobs but inertia is no longer a salvation because technology commoditises very successfully. However the Internet and mobiles created millions of new jobs. It is easier to see obsolete jobs than to predict new job roles. Who would have thought that data scientists would be the sexiest job!!!