2025 in Review: From Calamity, to Promise and Peril

The year began in beaten down mode with industry analysts reporting on shrinking IoT businesses and ‘calamitous’ exits. In the first case, Germany’s Software AG was the culprit for divesting its Cumolocity industrial IoT interests. A few days later, U-blox announced that it could not find a buyer for its cellular IoT business and would therefore shut down the entity. Citing several other corporate exits, LightReading positioned this as the latest IoT calamity to hit the industry.  

Matters did improve over the course of the year, aided by Vodafone’s ambitions to ‘hyperscale’ IoT and examples of making IoT more accessible via generative AI tools. While there are upsides to these developments, they raise concerns about IoT vulnerabilities. As we will see though other industry developments over 2025, there is always a flip side to the success that comes from economy-wide adoption of IoT.

IoT solution providers lead the way

In 2007, I began monitoring corporate initiatives in the IoT industry. In those days, mobile network operators (MNOs) were the predominant actors as the industry sought new markets for growth. The roughly fifty initiatives occurring in 2025 highlight the importance of solution providers. This is a sign of the importance of delivering value by solving everyday business challenges. Solution providers encompass a wide range of organizations, including entities such as AWS IoT, Siemens and Microsoft, and PTC. 

‘Solutions’ map to the upper layers of the IoT stack. Below these are the industry layers that deal with ‘connectivity’ and ‘connected devices.’ Connectivity shows up in the form of MNO, MVNO (virtual), LPNO (low power), and satellite connectivity providers. A continuing development in 2025 is the rapprochement between cellular and satellite industries. This was best expressed by a policy executive who remarked that it was now not uncommon to come across satellite industry representatives in meetings at the GSMA’s offices. 

Underpinning solutions, the coverage aspect of connectivity continues to matter for the industry. A few examples are: Vodafone’s partnership with Mobily to expand the former’s Saudi Arabian footprint; SingTel addressing global IoT deployments by allying with FloLive; and, Verizon adding SingTel and Skylo partnerships for global IoT. 

Working Across the IoT Industry Chain 

Connectivity partnerships – one MNO partnering with another MNO from a different geographic region - are a form of in-segment or horizontal industry initiative. However, effective IoT spans the industry chain because several elements are essential for a complete solution. One way to visualize this is by studying cross-industry connections. For 2025, these amounted to over 60% of the initiatives. Solution Providers, for example, are a good example of cross-segment reach. In addition to standalone solution provider initiatives (4), organizations in this segment partnered with other solution providers (4), MNOs (5), vendors (4), and investors (4). 

Vendors Unlock New Industry Segments 

The third-ranking group in the industry map is vendors. Many of their initiatives focused on connected devices and capability enhancements. Examples include G+D launching a credit card sized IoT tracker for shipping applications and Sequans using the acquisition route to boost its RedCap activities. 

Across the industry, the topic of Edge IoT continues to capture attention. Qualcomm was most consistent in illustrating how this dynamic is playing out. Its corporate initiatives included the acquisition of Edge Impulse with an emphasis on AI and IoT capabilities. Qualcomm then established an AI and IoT engineering center in Abu Dhabi before acquiring Arduino to improve developers’ access to edge computing and AI. 

Governments’ Growing Role in IoT 

With IoT becoming more central to the economy, government will have an increasingly important influence on the market. Three developments illustrate trends for the future. Firstly, European regulators approved a unified framework for non-cellular satellite IoT, overcoming years of patchwork regulation. Middle East regulators are likely to follow. 

In India, there are plans to develop an IoT-ready UPI (universal payments infrastructure) system to automate payment transactions through smart devices and not just phones. This would enable UPI payments through smart devices like TVs, fridges, washing machines, cars, and smart watches, among others. 

Finally, the USA will require U.S. Cyber Trust Mark labeling on all federally procured connected devices after January 4, 2027. The requirement that connected devices meet baseline cybersecurity standards (secure software updates, data protection measures, and vulnerability reporting mechanisms) will have spillover effects into the wider IoT market. 

Promise and Peril 

Towards the year end, Vodafone and 1NCE initiatives drew attention to much greater promise for the IoT came. In the case of Vodafone, its Americas Managing Director, Dennis Nikles, described plans to act on Vodafone’s hyperscaler ambition for IoT. This will involve a shift from scale to hyperscale (a topic I have covered in the past), partnering (in place of competing), and simplification (to cut complexity and costs) as a strategy. 

The second development, addressing the importance of moving beyond ‘connectivity’ as a value proposition came from 1NCE’s launch of its ‘Fixers’ line of business. This aims to expand beyond software and connectivity by leveraging implementation experience from over 27,000 customers. ‘Fixers’ will provide advisory services on building better IoT solutions, driving efficient usage of existing intelligent products, and debugging technical faults. 

With IoT devices and systems becoming more prevalent, value creation opportunities multiply as does the prospect for peril. Two stories illustrate grounds for concern. The first involves French authorities arresting two crew members of a passenger ferry. They are suspected of infecting the ship with malware with the possibility of remotely controlling the vessel. 

In the second story, Andrej Karpathy, a cofounder of OpenAI, experimented to see if Claude Code could get into his home automation system. His prompt led Claude Code to find his Lutron controllers on the local Wi-Fi network (check for open ports, connect, get metadata, and identify devices and their firmware). There followed an Internet search for the PDF for his system and then instructions on what button to press to pair and get necessary certificates. It then connected to the system and found all his home devices (lights, shades, HVAC temperature control, motion sensors etc.). The routine then ran checks by turning his kitchen lights on and off. 

Prospects for 2026 

Industry developments over the course of 2025 point to an evolution in industry mindset, with larger organizations addressing new market and business growth opportunities. These go beyond connections and connectivity as IoT meshes with complementary technologies such as AI, digital twins, data with meaning, and payments. As combinations of these technologies work their way into industry and public infrastructure, there remain questions about how the IoT industry will deal with adversity arising from malicious actors to accidental engineers over-relying on generative AI. There must be sources of opportunity for value added propositions targeting users and infrastructure via data protection, security, and trustworthiness propositions.

 

2024 in Review: Wider Factors are Enveloping the IoT Industry

An important lesson from 2024’s IoT corporate initiatives is about an industry that is evolving to a post-connectivity world. This is due to the dynamics of market-demand, one of which is to treat IoT connectivity as a component in a system-level application. An example would be the case of connectivity being a part of an electric vehicle, IoT system. The introduction of regulatory protections represents another market driver. Here, examples are evident in consumer education and consumer protection initiatives.

The impending arrival of 6G is another factor. In anticipation, the communications industry is adjusting to the commercial necessities for 5G through by focusing more on enterprise customers and business modernization requirements. Examples here relate to private networks for smart factories and digital transformation. 

As a standalone technology, IoT is no longer a magnet for hype. Topics such as AI (generative and traditional), digital twins, and enterprise or private networking are generating plenty of noise. 

2023 in Review: Connectivity Dominates but IoT-system Gaps Remain

Two investment themes bookended 2023. In January, the European Union backed a $100m venture capital fund, managed by Momenta Partners. In December, Softbank announced its EUR473m ($514m) investment for a 51% stake in Cubic Telecom. This development more than drew the eye as
exemplified by the analyst commentary around the high (16x) revenue to implied enterprise value multiple. 

In between, the level of corporate activity in the IoT sector continued at roughly the same pace in prior years, albeit down on the years of heightened activity going back five or so years ago. There were several developments among the vendor and network operator communities, but less so among the IoT platform providers. Governments became more active with an emphasis on security and protections for the consumer sector. 

Against the backdrop of 5G developments and 6G pathfinding, IoT is becoming a part of the fabric of enterprise operations and national infrastructure. Established players continue to emphasize connectivity, a relatively small portion of IoT value chains, while enterprises focus on quick-to-market solutions enabled by cloud providers and systems integrators. Both approaches risk leaving ‘system of systems’ issues for later consideration. 

Hyperscalers and IoT Market Prospects

The analyst firm, Transforma Insights (TI), recently published a report comparing the cloud hyperscalers – Google, Microsoft, and Amazon Web Services – and evaluating their readiness for IoT and digital transformation solutions. The report is a timely reminder of the role of IoT in digital transformation. It is also a reflection of latent demand for IoT-enabling services and solutions.

Microsoft is marginally ahead of the pack, scoring just over 50 out of a possible total of 100 points in Transforma Insight’s evaluation framework. Each hyperscaler continues to deploy a range of capabilities and developer tools, which would correspond to a higher score, with the aim of maximizing their share of the market opportunity. However, issues about the role of platforms in on-line advertising and social media markets suggests that complications face the hyperscalers.

IoT Platforms and Digital Regulation

A couple of recent and seemingly unconnected publications provide food for strategic thought on the topic of IoT platforms. 

Platforms are an important topic for the following reasons. As businesses deploy Internet of Things applications, many will turn to the service provider market for affordable, feature-rich, and well-engineered platforms. Platforms also represent an important topic for the large Cloud-providers, such as Amazon Web Services, Google Cloud and Microsoft Azure, who understand the importance of platform strategies and data. 

The first publication that caught my attention is a short article on the IoT Agenda site. It outlines that issues of IoT technology fragmentation and discusses the trend towards concentration in the IoT platform market [1]. The second is a study by a group of economists with an expertise in platform economics and competition policy. They studied the EU’s Digital Markets Act (DMA) and its regulatory implications for large and dominant digital platforms [2]. 

Regulation and Competitive Advantage

A couple of years ago, I was in conversation with a group of technologists and investors at the annual meeting of the Transportation Research Board. This gathering takes place every January in Washington DC. Think of it as the transportation industry's equivalent of Mobile World Congress. 

Our group was discussing the then emerging market for connected cars. I threw in a question about the impact of regulation on their business strategies. Regulation matters in relation to safety, liability and insurance solutions, and data management. Factors such as these matter more to commercial viability than technical innovations. The need to factor regulation into technology choices and business models was evident even then. The universal response I got from the group was that innovators needed to be given the leeway to develop the technology and novel services. Putting it explicitly, regulators needed to stay well out of the way.

The same issues are apparent as new markets develop on top of the foundations of mobile communications. One example is the sharing of consumer data derived from mobile phones [1]. Another is Facebook's difficulties in launching its Libra currency and payments initiative, ahead of regulatory buy-in.

MNOs’ IoT Platform Predicament

IoT Analytics, the German market research firm, recently published a customer satisfaction assessment of IoT platforms [1]. It covers 50 vendors and applies a broad definition for IoT platforms. At one end of the spectrum, there are multi-purpose cloud infrastructure and platforms, such as those offered by Amazon and Microsoft. At the other end are platforms for niche users, with machine builders as one example.

IoT Analytics used feedback from senior executives in organizations that procured and are deploying IoT solutions to rate the top-25 platforms. There is a slight bias to North America, which accounted for 40% of the mix. Europe (25%), APAC (25%) and MEA (10%) make up the rest of the survey.

For this post, I propose to focus on a summary chart. This maps leaders, challengers and follower IoT platforms across technology and customer-centricity dimensions. The chart highlights a predicament for mobile network operators and especially the large European operators.

2016 in Review: Shift in Industry Dynamics as the IoT Enters the Mainstream

According to my records, the strength of IoT corporate initiatives witnessed over previous years weakened in 2016, somewhat in contrast to the much greater visibility of the IoT at industry events and in the marketing literature.

While the number of merger, acquisition and investment (MA&I) fell compared to 2015, as a proportion of all corporate events it increased over the prior years.

About 70% of these relate to acquisitions; the remainder correspond to fundraising or investment activities.

Now that the IoT market has become a mainstream idea across the wider economy, the MA&I dynamic reveals a stronger tendency for companies to accelerate their IoT strategies by acquiring capabilities from third parties.