The IoT Opportunities Are Immense, Right Outside Your Door. The ‘Internet of Things’ is mainstream. ‘Alexa, dim the lights’ has exactly one meaning and requires no explanation. Bizarre, perhaps, but undeniably futuristic. The smart home war is in full swing and Apple, Google, Amazon and Samsung are vying to become the ‘operating system of the home’, demanding control of our thermostats and microwave ovens.
It makes sense. The smart home opportunity is enormous. More importantly, it’s sufficiently homogeneous to imagine a ‘winner take all’ global platform. For Alexa and friends, dimming the lights in a Sydney apartment is not materially different to dimming the lights in a Malibu mansion. And with all that delicious consumer data to slurp up, I can see why the tech titans are hot and bothered.
But there’s a gigantic – and in my opinion more interesting – IoT landscape evolving outside the home. New advancements in low-power wide-area (LPWA) wireless networks are reducing the barrier for developers to create connected products that solve the near-limitless array of IoT use cases in the city, in the factory, and on the farm.
Today, we rely on brute force to solve problems in the physical economy. Dumpsters are emptied once a week; tires are replaced every 80,000km; a train stops at every station. How much time and energy is wasted emptying a dumpster that is half full, and how many times has a widget been replaced too early or too late because scheduled maintenance was cheaper or easier than constantly evaluating its true condition?
Cheap, pervasive internet connectivity will continuously inform our relationship to the physical world. For just a few dollars, any ‘thing’ will be connected for its entire useful life using technologies like NB-IoT, part of the 5G mMTC (massive Machine Type Technology) standards.
This is the real opportunity for IoT developers. The problem is too large and too diverse to be dominated by a small group of mega tech firms, and the ability to create new economic value is obvious. The entrepreneurial ‘whitespace’ created by the cellular IoT platform will dwarf the opportunity created by smartphones, which birthed companies like Uber, Snapchat and Spotify.
From an Australian perspective, a recent report by PwC claims that, across the five industries assessed – construction, manufacturing, healthcare, mining, and agriculture-fishing-and-forestry – i.e. 25 per cent of Australia’s GDP, the IoT can achieve potential annual benefits of $300 billion.
To me that feels conservative, considering that every ‘thing’ – every component of the value chain – can be measured and improved using inexpensive ‘always-on and everywhere’ connectivity.
Two billion smartphone users represent a ubiquitous user interface for internet-connected systems. To support this, mobile network operators have invested in network density, coverage and performance improvements that incidentally benefit IoT.
Perhaps less obvious, building all those smartphones has driven down the cost of LTE modems, accelerometers, lithium batteries and GPS modules. Mobile users + better networks + better, cheaper components. The outcome: a company like Lime – a handful of Silicon Valley engineers at the time – was able to put their electric scooters on street corners in over 100 cities, ridden every day by millions of mobile users. Unimaginable just a few years ago.
With that said, developing for IoT remains harder than building an app. Experimentation – the prerequisite to innovation – remains too expensive. The prototype-to-manufacturing pipeline is cheaper than ever before, but it still requires insider knowledge and remains out of reach for most entrepreneurs attempting to pull themselves up by their bootstraps.
The global connectivity ecosystem remains fragmented and, generally speaking, global management of a cellular-connected fleet is prohibitively difficult. Network operators have a history of geographic fragmentation, stemming from deep roots in spectrum licensing.
Just as it is online and in the mobile space, in IoT there will be no such thing as a regional application, and the connectivity industry will be forced to embrace this reality.
IoT developers: carpe potestatem. It’s an amazing time to be creative. Perhaps, like me, you kick yourself for missing out on the PC, web or mobile wave – ‘on-demand taxis!? I could’ve thought of that!’ – well, now is your chance. Identify an inefficiency in our relationship to the physical world and get ready to sharpen your C++ skills (for better or worse, still the predominant language of IoT devices).
Forget smart toasters, the real IoT opportunity is right outside your door.