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The Current State of IOT: Slightly Confused and Disconnected

By Savannah Peterson

The Internet of Things is not yet connected; it will be “adopted” when the information transmitted provides real-time value in an embedded way, versus the clumsy frosting of mods for your home that exist today. We won’t see these “things” connected to internet unless they’re sharing information with us that we need, either through our smartphone, AR or audio feedback. Likely, many of these devices (the majority of them sensors) will be built into your existing environment - in your home, office, or city. The computer that has the power to control them all is already in your pocket – your phone. Gartner even has IOT on the apex of this year’s hype cycle for emerging technologies, with the prediction that IOT will reach plateau in 5 to 10 years. According to Deloitte, by 2020 there will be 26 billion IOT devices that together will add $1.9 trillion in economic value across the globe. There are currently 7.3 billion people on the planet. That’s approximately 3.5 connected devices per person!

The Current State of IOT - Gartners hype cycle 2015.jpg

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So why haven’t we yet seen mass adoption of IOT? Why isn’t everything “smart” already? Why isn’t the smart home “cool” yet? I believe the world isn’t yet fully connected for two reasons:

1) Need Solving: Current IOT isn’t solving needs - it’s recording and reporting data
2) Collaborative Integration: The IOT mesh of the individual and the greater web is still broken

IOT is really the hardware manifestation of the cloud. Like the cloud, the home can be a series of interconnected networks and devices communicating with one another. Homes in a neighborhood can communicate with one another through a master network that then reports back to the central node of a connected city.

The relationship between an IOT device and hub in most current incarnations is like that of telephones and switchboards until the 1960’s- manually paired by hand. It’s an array of one-off products or small groupings of products that aim to solve one need well without considering (or investing in) our other integration needs. This makes even more sense when we look at the last few years of IOT. Another study published by Deloitte about IOT projects from 2009-2013 concluded that only 13% of IOT development was targeted at growth and innovation, while the rest was around cost reduction (65%) and risk management (22%). There are two ways that innovation happens: 1) something awesome is made that drives innovation in manufacturing, and subsequent costs decrease due to supply and demand, like we saw with computers; or 2) a breakthrough technology is developed that we’re unsure of how to apply, so we optimize its output, as we’ve seen with 3D printing and IOT sensors.

In addition to doing their job well, products that leave room for further additions in the home or other connected space are poised to last considerably longer in the market. This goes for urban IOT infrastructures as well. For example, Barcelona is the “most connected city in the world,” according to Fortune. Companies like Cisco are looking to use Barcelona as an example of what a connected infrastructure could look like as more cities get “smart.” The thing is, Barcelona has been the “#1 smart city” for over a decade, and from what I can tell, nothing remarkable has come out of it yet. In fact, Antoni Vives, former second deputy mayor of Barcelona, said two years ago: “I am fed up with the streets full of devices. It is a waste of time, a waste of money, and doesn't deliver anything; it is just for the sake of selling something to the press and it does not work." Despite no real obvious results yet in Barcelona, McKinsey predicted in their IOT report that connected cities will save $1.7 trillion a year by 2025. Corporations powering the urbanization of IOT are poised to make $175 billion in revenue from these efforts over the next 10 years.

So far, the companies investing in smart cities are exactly who you’d expect: IBM, Cisco, and Microsoft. The company poised to own this space in a way that has yet to be owned is Google. At I/O Google announced Project Brillo, its android-based platform for IOT. While Brillo’s talk was left a bit vague (poised to be released in Q3), they highlighted Weave, Google’s communication language for determining the meaning of an “event” in your home/connected ecosystem. Project Brillo is allegedly incorporating the considerations I mentioned above, thereby leveraging “lower levels of Android” and making it easier for external hardware manufacturers to make products on the platform. Another key player is Samsung with their 2014 wise $200 million investment in early IOT darlings SmartThings. 

So, who will own the IOT ecosystem? Early indicators show it could be the user. When I asked a panel of thought leaders at SolidCon back in June what company was poised to own the IOT ecosystem, they unanimously agreed that no one would. They believed that it would succeed only as an open (but secure) exchange of information. The “no one owns it yet” idea seems like we’re actually the ones in charge of our connected destiny.

So what do you think? What products do you wish communicated with each other or you that aren’t currently connected? What product(s) do you hope will never be connected?