2018 Will See Disruptive IoT Converge and Big Data Get Monetized

It’s the start of a new year, so it’s time for everyone to speculate about the big changes that will occur over the next 12 months.

In terms of the Internet of Things (IoT), we have already spoke to some industry insiders to get their thoughts on what the IoT has to offer for the coming year.

However, it’s a big industry and that isn’t the end of the story. A bunch of IoT professionals from the EY IoT Competence Center in London also have a few predictions of their own. And here is what they have to say on the following topics:

IoT Monetization

Business and operational models based on IoT capabilities are still very traditional, and the anticipated benefits have primarily focused around how to achieve incremental value (which created value islands) through increased productivity, process automation and maintenance cost reduction, for example. However, more and more decision-makers are realizing the disruptive potential of IoT and are likely to increase its current value stream (toward value ecosystems) and more effectively use and monetize the data collected.

“As executives realize the value creation potential of IoT systems, they are likely to seek new areas of application within their organizations,” said Aleksander Poniewierski, EY Global IoT leader. “Our analysis projects that we will see multiple proofsofconcept of such solutions in 2018, as well as acquisitions of startups that have IoT solutions in their portfolio. However, this shall bring its own challenges, as it could demand a redesign of business and operating models that require interoperability of current solutions throughout the entire IoT technology stack and the need to embed new IoT sensors in existing products.”

A New Dawn of Network Edge Processing

Moving of IoT data processing to the network edge was expected to happen in the early years of the IoT development. However, this trend slowed due to decreasing connectivity costs and rising communication networks throughput, which resulted in a shift toward centralized processing. However, falling prices and the increasing processing power of edge devices have revived this trend back towards network edge.

“The changing requirements of connected devices such as throughput and power consumption have resulted in the need to redesign communication networks from a ‘one-size-fits-all’ concept into networks with flexible characteristics,” said Poniewierski. “New privacy concerns, especially in Europe, where recent regulations relating to personal data protection rights may result in companies avoiding the transfer of raw data into the public cloud. We therefore expect organizations to increasingly adopt edge-of-network processing systems.”

A Battle for Standards—IoT Connectivity Wars

So far, IoT interconnectivity has been difficult as players adopt their unique approaches and solutions for different applications. Each promotes their own proprietary standards and protocols, which has led to a multiplicity of closed systems that do not communicate with other devices.

By mid-2018, the EY IoT Competence Center expects the pre-standard 5G mobile network to be launched in the United States. This is projected to support virtual private networks with different operational characteristics and work across multiple frequencies. While global distribution of 5G networks is not expected until 2020, formalized standards are expected to be in place in 2018 and have the potential to reshape almost all current wireless communication methods used for IoT-based applications.

“IoT cannot thrive without effective and affordable wireless connectivity, interoperability and common standards,” continued Poniewierski. “We believe 5G has the potential to make a groundbreaking impact on the way in which future IoT ecosystems are designed, especially in the areas of scalability, latency, reliability, security and the level of individual control on connectivity parameters.”

From Cybersecurity to Resilience by Design

EY IoT Competence Center analysis reveals that security and privacy concerns are the top factors preventing decision-makers from committing to IoT development and implementation. Increasingly, companies are recognizing that the solutions required to secure centralized IT systems are not sufficient to secure distributed IoT systems, especially in applications requiring high levels of reliability.

“IoT solutions require simultaneous fulfilment of security, privacy, safety, reliability and resilience that cannot be achieved through securing individual elements of a multipurpose environment. Therefore, current approaches must consider changing direction from simply seeking to achieve security toward a resilience-by-design approach that incorporates redundancy into architectural and organizational design and separates data processing.”

Disruptive Technologies Are Converging

Technologies like IoT, blockchain, artificial intelligence and robotic process automation are increasingly converging under a single digital disruption umbrella. The EY IoT Competence Center anticipates that in the first half of 2018, suppliers will begin to move toward full integration of IT systems supporting business processes and automation solutions in order to build fully integrated “intelligent automation” solutions.

“From a business perspective, digital disruption technologies are complementary and perform unique functions within various parts of the organization,” concluded Poniewierski. “We expect that, after a period of initial fascination with pilot implementations of individual disruptive technologies, industry leaders will expect a much more integrated approach to the adoption of digital technologies, and with measurable return on investment.”

That leaves one final prediction from myself:

Will 2018 be the year that we finally rename the “Internet of Things” to something less ridiculous? It kind of sounds like a placeholder until something better comes along.