International Data Corporation (IDC) envisions 2015 will be the year when Internet of Things (IoT) starts to deliver against the hype, but it will require vendors and customers alike to change their approach.
“Companies are always looking for ways to drive business transformation, deliver competitive differentiation and enhance the customer experience, and many are now realizing that the Internet of Things can help them deliver against these goals,” says Charles Reed Anderson, AVP, Head of Mobility and Internet of Things, IDC Asia/Pacific.
Anderson explains that 2014 has seen an explosion of new IoT-related solutions, including consumer wearables, smart home products and industrial IoT solutions.
“More importantly, however, is that 2014 has seen the maturing of the wider IoT technology vendor ecosystem, which helped ensure we have the capabilities to deploy complex IoT solutions today and deliver tangible value to governments, enterprise and consumers alike.”
Drawing from the latest IDC research and internal brainstorming sessions amongst IDC’s regional and country analysts, the following are the top 10 key IoT predictions that IDC believes will have the biggest impact on the APeJ IoT industry in 2015.
1) IoT to create new markets for retail brands
During the past year, IDC has witnessed an explosion in the consumer wearables market with new fitness bands, smart watches and smart clothing being launched from traditional OEM vendors and a multitude of tech startups and 3rd platform-born players.
IDC believes that 2015 will see an influx of consumer IoT embedded into consumer retail brands/ products. Partnerships between IoT vendors (including ODM/OEM vendors) and non-tech consumer goods’ brands will emerge rapidly to create a sizable market opportunity for the IT industry.
2) Smart Watches: Early adopters will be the only adopters…for now
New smart watches will be launched on an almost weekly basis from the leading global device manufacturers, the Chinese and Taiwanese ODM vendors and tech start-ups. While interest levels are high, IDC believes the early technology adopters will be the only adopters in 2015. The combination of the small screen size, immature application developer ecosystem, and limited functionality will prevent this from reaching the wider consumer market in 2015.
3) Wearables enter the enterprise
Basic wearables, which include devices fitness bands and clips that cannot load 3rd party software, will find a lucrative new market in enterprise customers. Employee tracking, integration into corporate wellness programs, and the creation of new business models that leverage basic wearables, especially fitness bands, to enhance the customer experience will see significant adoption in 2015.
4) Free services to drive consumer IoT adoption
There is a limit to how many consumer wearable products and services consumers will be willing to purchase. In 2015, IDC believes companies will start to offer free products and services to specific customer demographic groups, but they will insist they “own” the data that is produced by the devices. This data will then be leveraged to deliver personalized marketing and drive sales or sold to 3rd parties (regulation permitting).
5) Emergence of the glass solution provider
Connected glass devices will struggle in the consumer market, however, the enterprise business case exists for many industries, particularly those industries (e.g. major equipment manufacturers) that employ large workforces that spend considerable time at customer sites for training as well as maintenance, repair and overhaul (MRO) services. IDC expects some large equipment manufacturers to build out their internal capabilities and partner ecosystems to become a glass solution provider and to reduce their considerable travel costs.
6) Industrial IoT: Businesses “talk big”, but deploy practically
Most industries believe that IoT will forever change the way their industry operates, however, ongoing concerns about both up-front (CapEx) and ongoing (OpEx) costs as well as potential security and privacy issues will ensure the deployment of “practical” solutions in 2015. Customers will focus on deploying solutions that deliver quick impact and return on investment (e.g. energy management solutions) and leverage the cost savings generated to fund more dynamic solutions going forward.