Nov 2, 2016

Impressions from IoT Solutions World Congress 2016

While I often attend Mobile World Congress in Barcelona during February, this was my first experience of IoTSW Congress and seeing Barcelona in October. The show is growing impressively, doubling the number of exhibitors and attendees compared to 2015. If this pace holds up, IoTSWC could surpass MWC within three years, such is the growth potential for the IoT industry.

 In addition to three speaking slots – one for the Industrial Internet Consortium, another for Intel’s Corporate Strategy group and a third on main Congress track - I had several discussions with industrial businesses, investors and solution providers about the state of the market.

Here are a few observations that stood out from the event. 

 Industrial companies were present in force, highlighting demand-side progress in adopting IoT solutions and the transition that product companies are making from devices to connected-devices and -services. There was also strong interest in developing in-house IoT platforms, which points to a degree of strategic intent about value-chain control points. However, my impression, backed up by first-hand observations from an experienced M2M service provider executive, is that some of the industrial companies exhibiting at IoTSWC had yet to grasp the business essentials of IoT i.e. it is not just a matter of connecting devices for remote monitoring applications. This suggests that some of the early industrial IoT offerings will have a temporary success. Moreover, industrials on the acquisitions trail are at an information dis-advantage and may be failing to invest in extensible assets.

Telecommunications equipment vendors had a strong presence, much more so than the mobile network operators (MNOs). The central telecoms sector message, echoed in Vodafone’s main event presentation, was about opening up a huge IoT market based on low-cost, standardized NB-IoT technology. This is a perilous strategy because there is scant evidence to suggest that rising, cellular device volumes combined with a sharp dilution in the ‘revenue per-device’ business model will materially improve top-line revenues. An added concern is that the analyst community reckons that about 90% of IoT devices will be of the non-cellular variety, further marginalizing the core MNO business.

Of course, a platform strategy (and there are many meanings to this term) is one way to manage a hybrid device population. Platforms offer a means of inserting (intermediating) value-added functionality to open up the prospect for sharing in revenue streams higher up the value chain. However, since many mobile operators have previously introduced platform intermediaries into their IoT value chains, this is a difficult but not impossible transition to make. After all, it is not as if the less well placed telecoms equipment vendors and industrials are not already moving in this direction.

IoT standardization and business model innovation were two other recurring themes in Barcelona. I was happy to share my knowledge on these topics at two events organized by the Industrial Internet Consortium (on lessons learned and best practices from test-beds and open horizontal platforms) and Intel’s corporate strategy group (on business strategy and innovation frameworks in the context of Industrial Internet and Open Fog initiatives).

Finally, seeing one of my clients win the IoTSWC Award for best IoT solution in the Transportation & Logistics category was even more pleasing as a reward for team’s hard work and as recognition of the long-term direction of IoT platforms and business strategy.

Image provided by courtesy of IoT Solutions World Congress.

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