Fueling the Dream of the Billions of Connected Devices
Critical Areas that Need to be Addressed for M2M and IoT Markets to Flourish Compass Intelligence believes the U.S. market alone will reach $8.5 Billion in Business IoT revenues by 2020, and this does not include things such as enterprise wearables and connected consumer products. This market is critical for transforming business operations, processes, and work flow. There are five critical areas or barriers that need to be addressed before the billions of connected devices can become a reality, including:
• For starters no one company can serve the total needs of an enterprise when it comes to a M2M/IoT solution. To overcome this hurdle, companies that provide connectivity, enterprise software solutions, hardware manufacturers, sensor, and semiconductors have to come together, collaborate and join forces to work with customers. In addition, co-selling sales models have to thrive and M2M/IoT market participants must transform their own organizations, similar to the ways that are bringing about change in the industries that they serve.
• The second hurdle is to get buy-in from multiple industries that have a very large market opportunity thus, creating value for customers and proving that M2M/IoT can transform business. This is key because some are still very skeptical of M2M/IoT.
• The next area that will help the market explode is cognitive solutions, which is in the early stage of its life cycle. The technology is intended to bring intelligence to the device.Machine learning and subsequent improvements in this technology is going to help drive the market.
• Standards and openness is important for mass scale adoption. Interoperability is even more important, as we understand there may be more than one standard adopted.
• Of course, vendors have to make money. So lastly, we need proven business models that not only benefit both businesses and consumers, but also government entities
Industry with Biggest Potential for M2M
In evaluating vertical markets, the key is understanding the health of the industry and how products/goods flow through the value chain. Some markets are more complex than others such as industrial market segment, while others are pretty straightforward from a flow perspective but regulatory body’s impact movement such as healthcare. In addition to understanding the dynamics and economic health of the verticals, having insight into the readiness of IoT/M2M for each vertical is critical. This is a key metric that is often overlooked.
Transportation continues to be the largest market segment for M2M. This is a market that has tremendous potential because vehicles are increasingly becoming mobile and the need for a wireless connection is booming in fleet management and other solutions that evaluates the health of trucks and its cargo. When looking at the consumer side, 4G LTE is really enabling the connected car market. We can see this with all of the unique products and solutions being introduced to the market and the aftermarket has yet to be tapped, which means there is even greater market potential. In the transportation segment we also see usage-based-insurance growing. This is a prime example on how M2M will transform the business model of a particular industry.
When we move beyond this market there are several strong market opportunities for M2M. On the business side, we see a large opportunity for growth in Vending, Point-of-Sale and Transaction terminals. These remote/ mobile applications are seeing increased adoption of M2M technology and the industry is just scratching the surface because there is room for massive adoption in this segment.
On the consumer side outside of transportation, a large market opportunity exists for the connected home/alarm monitoring market. Innovation is taking place in this market and several companies have disrupted this space (Google’s Nest, Apple’s HomeKit), which is creating an arms race in the connected home market. We see the connected home segment being the key driver for the overall connected lifestyle market because of the type of data that will be collected in the home. This segment will be able to help customize the user experience based on lifestyle preferences and habits.