101 The IoT Breakdown

Introduction
Few technologies promise to change our lives as profoundly as the Internet of
Things (IoT). A massive global network of billions of connected devices holds the
potential to transform nearly every aspect of modern life, making industries
more efficient, giving us better information, and automating numerous tasks.
As the IoT reaches closer every year to a critical mass, there are many questions
that arise. In this eBook series, we will answer some of the most important
questions facing the IoT market. Our goal is to provide you with information
about IoT that will help you understand it more deeply, grasp its potential, and
comprehend its complexities so that you can make better decisions.

This eBook is the first of three planned in a series. This first chapter is an
overview of some of the biggest and broadest questions facing IoT, while later
chapters will delve into some more specific issues. Thank you for reading this,
we hope it’s useful to you.
What is the current state In terms of number of devices, Gartner estimates that 6.4 billion connected things were
in use worldwide in 2016, an increase of 30 percent from 2015. Gartner predicts this
number could grow to 20.8 billion devices worldwide by 2020 1. These numbers are
of the IoT market? similar to those forecast from IHS: 15.4 billion devices in 2015, estimated 30.7 billion in
2020, and approximately 75 billion by 2025 2.

Although there are a lot of ways to answer this question, the best way
Looking at IoT from the connectivity point of view, Verizon estimates that the number
is probably to review some of the more substantial research that has
of B2B (business-to-business) IoT connections alone will increase to 5.4 billion by 2020,
been done recently by some of the more well-known research firms
which equates to a 28 percent CAGR from its forecast base year of 2014 3.
and other companies and break that research down by some of the key
components of the IoT ecosystem. The short answer is: IoT is beginning
In a slightly more focused segment of the market, the Industrial IoT market was valued at
to grow at impressive rates now, and this growth is expected to
more than $93 billion in 2014, projected to reach $151 billion by 2020 and is expected to
accelerate significantly in the next 5-7 years.
see 8.03 percent CAGR between 2015 and 2020 4.

2010 2015 2020 2025

 We got to this market size so quickly because of combination of factors:

How did we get here? 1. IoT technology evolution — several important technologies evolved quickly
and in parallel over the last several years, such as low cost/low power sensors
and actuators; lighter weight IoT networking protocols and standards; IoT
services such as IoT cloud repositories, big data and analytics; a wide range
of IoT applications.

2. IoT technologies are natural fits for other improvements underway in several
markets. It’s been widely discussed that IoT promises improvements in quality,
cost, revenue, security, efficiency, rate of production, health, monitoring,
comfort, and so on. It doesn’t matter if we’re talking about healthcare, industrial,
agriculture, smart cities, transportation or home automation - most of these
characteristics apply to each of these markets. These improvements are driving
demand for IoT innovation and deployment.

3. Early on, the IoT market was driven by supply-side factors — ease of use,
ubiquity of wireless connectivity, innovation in applications, availability of low-cost/
small-scale technologies, and market entry by major players like Amazon, Cisco,
IBM, Intel and Microsoft. Now, corporate demand has caught up with supply-side
dynamics as mainstream businesses face the risk of being left behind if they don’t
look seriously at how IoT can add value to their bottom line.
Which sectors may be There are dozens of examples, but here are just a few examples of major global
market sectors where IoT technology can be disruptive:

disrupted by emerging Travel and transportation: IoT can change the way people travel

IoT technologies?
and optimize travel planning

Industrial: smart manufacturing/assembly lines and equipment

In short, every sector is likely to be disrupted in some way by IoT,
because IoT technologies are becoming cheaper and more ubiquitous
and because they promise cost savings and service improvement. Also,
since the vast majority of businesses and governments operate within
extended and international supply chains, it will be very difficult to
remain immune to industry-wide dynamics.
Energy: smart energy generation, distribution, management
and consumption
Shopping and Retail: smart advertising, checkout and delivery
Healthcare: connected devices to facilitate home healthcare

Consumer expectations are also driving disruption. For instance, the

Agriculture: smart farming to optimize irrigation and
rate at which companies have adopted social media communication
increase crop yields
and social media customer management channels is evidence of how
quickly this kind of change can be driven by customer demand.
Is the Internet ready to In the future, the IoT will also see harmonization and continued standardization of
IoT semantic ontologies, interworking frameworks to allow different IoT technologies
to communicate with each other, advanced IoT service layer technologies such as
support IoT? What still context awareness, and advanced IoT security.

needs to be done?
The Internet is already supporting the IoT, and doing so leveraging
existing internet technologies that pre-date the IoT — IPv4, IPv6,
TCP, UDP, HTTP, TLS/DTLS and others. In addition, today’s Internet is
supporting the IoT using some newer technologies developed for it:
6LoWPAN, RPL, CoAP, LWM2M, oneM2MTM, and others. However, the
next stage of evolution will provide support on a much larger scale.
The IoT will soon see a proliferation of numbers of devices and
end-points, increase in volume of traffic and data throughput, along
with micro-signaling from constrained end-point devices. The next
level of support beyond that will involve processes that support
cooperation (across applications, between business/service provider
partners) and innovation (new uses of IoT data, new services, and
new business models).
What connectivity and There are already several connectivity and network standards in this market, most of
which were developed in the pre-IoT era.

network standards are The IoT calls for additional layers of requirements. For example, a sensor using an
existing communication protocol might send data to an application. However, the

needed to support the protocol may not have been designed to manage “reverse-direction” commands
from the application to reconfigure the sensor, for example. This means that existing

development of the IoT?

standards need to evolve or be bundled with standards that enable IoT solutions.

The oneM2MTM standard made the earliest start of the common functions to manage
IoT devices, gateways and applications. As an open standard developed specifically to
meet the needs of IoT, oneM2M is a natural complement to existing communications
and networking standards. This is true not just as it relates to the telecoms sector,
but also in the industrial, healthcare, transportation, smart city and other domains.
Open standards like oneM2M are expected to play a significant role in speeding time
of deployment and increasing interoperability of solutions, while dramatically reducing
cost of deployment.

oneM2M is a trademark of the Partner Type 1 of oneM2M


How do you see the
roles of corporations,
academia, government
and other institutions as
enablers for IoT solutions?
The IoT is like the Internet, but on a much different scale. Device
numbers and data volumes will be massive, while the devices
themselves will be tiny — both in terms of size and power
consumption. Where the Internet relied on rapid innovation and
the best efforts of many players, the IoT will require the same level
of collaboration but to higher standards of service, infrastructure
protection, privacy and security. The ecosystem may look like this:
Government: Defines requirements for national
standards. Defines and enforces regulations and
policies to ensure IoT technologies are interoperable,
safe and beneficial to society. Provides research
funding for IoT and related areas, fosters application
development via pilot programs and test beds such
as smart cities and large transit systems. May provide
incentive for IoT deployment and use through tax or
other fiscal incentives.
Academia: Trains IoT engineers and technologists.
Educates people on the potential of IoT to increase the
public’s openness to the new paradigm. Identifies new
IoT directions and challenges. Promotes and conducts
long-term research. Collaborates with industry to
solve real world problems. Helps government develop
critical technologies and regulations.
Corporations/Industry: Identifies real-world problems
for IoT, develops commercial IoT products to address
them. Contributes funding and resources toward
development of standards (such as oneM2M).
Provides funding and resources for long-term
research projects in collaboration with academia.
Provides knowledge and expertise to government
agencies to inform policy decisions. Collaborates
and sponsors public pilot projects that can help
demonstrate capability of new technologies.
 The different roles of the various IoT stakeholders can be vast, and it is difficult
What is the role of for any one company to function in all roles. Collaborations allow both large and
small companies to participate together in the build-out of an IoT ecosystem. As

partnerships and more and more IoT deployments are interworked with one another, the various
stakeholders can realize additional value from IoT. For example, a collaboration

ecosystems in IoT? Why involving an IoT analytics service provider collaborating with an IoT device platform
provider can result in both parties realizing benefits that they otherwise would not

are they important? be able to realize without the collaboration.

There is wide acknowledgement that no single solution provider,

regardless of its size, covers all elements of an IoT solution or service.
Partnerships are therefore essential to an IoT solution. Once you add
multi-supplier sourcing into the mix — meaning that an adopter can
choose from several different module providers — then you end up
with an ecosystem. So, partnerships are essential to bring together
the different elements of a solution, and ecosystems ensure that
there is choice in designing a solution.
Are there opportunities for
carriers that extend beyond
simple connected devices?
Carriers play a critical role in IoT innovation that extends beyond
mere connectivity, one that takes advantage of their unique position.
In order to do this, carriers need to move up the value chain into
IoT solutions (AT&T, for example, is already working along these
lines) and/or services associated with enabling IoT solutions (such as
offering IoT platform services to businesses that are implementing IoT
solutions). For example, operators envision devices on their networks
that serve many different market sectors/verticals, making them
uniquely positioned to deploy a horizontal layer that leverages data
and services from different, non-cooperating verticals. This horizontal
layer will essentially be a new platform that can run innovation
“mash-up” applications that leverage services such as data mining
and machine learning techniques. Other opportunities will present
themselves too as the IoT landscape becomes more mature and
clearly defined.
What are communities Some cities are also exposing their city data through OpenData initiatives. Small and medium
sized cities are focused on pressing problems, such as costs savings from switching to LED and
dynamic street lighting. Connected street lights are viewed as a first step in smart city solutions
doing today with their and a foundation upon which to build other IoT applications and smart city IoT networks.

industrial IoT and smart There are many exciting developments in smart city IoT, which we will explore in more detail
in a later edition of this IoT eBook series.

city efforts?
Large cities are experimenting because they have political
will and a technology environment where there is sufficient
concentration of data, application developers and entrepreneurs.
The economic pull of large cities also draws in-kind contributions
from large technology firms. For example, Google is active
in several initiatives in Los Angeles while some cloud
providers are offering service credits to
cities that use their platforms.
Resources
1. Gartner – Gartner Says 6.4 Billion Connected “Things” Will Be in Use in 2016,
Up 30 Percent From 2015, November 2015.

2. IHS Technology – IoT platforms: enabling the Internet of Things, March 2016.

3. Spark Labs Global Ventures – Spark Labs Global Ventures’ Internet of Things &
Hardware Industry Report 2016, March 2016.

4. Source: MarketandMarkets – Industrial IoT Market by Technology (Sensors,

RFID, Industrial Robotics, 3D Printing, DCS, Condition Monitoring, Smart Meter,
Autonomous Haulage System, Yield Monitors, Guidance & Steering, GPS/
GNSS), Software, & Geography – Global Forecast to 2020s, February 2017.
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