2017 has seen businesses aggressively adopting and investing in large-scale Internet of Things (IoT) initiatives to enhance customer relationships and drive business growth by improving quality, productivity, and reliability. This year also identified the Asia Pacific region as the global driver for IoT growth with the IoT market in the region expected to reach 8.6 billion connected devices by 2020 and 86% of companies in the region will have some form of IoT in place by 2019.
These findings provide an indication that businesses in the region are embracing the transformative qualities of IoT and will only continue to embrace this disruptive technology in 2018. Here are six predictions that will potentially impact the IoT industry in the upcoming year:
1. Creating an Ecosystem
Realisation dawns that IoT market leaders must embrace collaboration, even with competitors, to achieve innovation. The trick to working with competitors, without compromising integrity and intellectual property, is standardisation. A set of common standards, developed by practitioners applying their domain knowledge, as well as joint ventures will result in benefits for all businesses who are a part of the IoT ecosystem.
2. Artificial Intelligence and Machine Learning
IoT platforms will not survive without leveraging Artificial Intelligence (AI) and machine learning capabilities.Platform vendors will evolve from device connectivity and data collection, and push forward into data analysis using AI and machine learning. Data-driven analysis leads to process-driven actions as part of the maturity model. Moreover, as businesses begin to have a better understanding of the benefits of these technologies, the barriers to adoption of highly complexed use cases such as predictive maintenance and self-driving cars will become lower.
3. Mergers and Acquisitions
The shake-out on the IoT platform community is imminent. There are over 300 IoT platforms in the market, from B2B to B2C and industry-specific, specialising in data connectivity and/or management. 2018 will see the first real shake-out, as closures and takeovers increase – mainly by large software companies and newly formed joint ventures.
4. Vertical is the new Horizontal
Platforms will get more specialised as standards and protocols are made consistent, thus simplifying adoption. With horizontal, agnostic IoT platforms maturing and having gained market share, differentiation through specialisation is the way forward. New and existing vendors will want to add value and distinguish themselves by offering tailored solutions catered to certain markets, or even certain industry verticals.
5. Redefining Business Models
New business models will influence and inspire new business opportunities such as assets-as-a-service. As efficiency use cases such as predictive maintenance begin to lower costs and provide a deeper understanding of assets, organisations will be able to leverage new concepts. Offering things-as-a-service, tighter service level agreements, optimising spare parts inventories, or improving service excellence and maintenance are all new models which will increasingly be implemented by manufacturers.
6. Transitioning from Smart to Analytical Devices
Never mind smart devices with analytics on the edge, analytical devices will be the next great trend.
Hardware vendors will come up with out-of-the-box solutions where IoT and advanced analysis capabilities are pre-installed on the devices that are ready to use. For example, control capabilities will increase with the advances made in real-time Ethernet (TSN) and the emergence of 5G, allowing for virtualisation of the controller.
IoT in 2018
2018 will be an exciting year for businesses in Asia that are embarking on the journey towards digital transformation. IoT has been labelled as one of the key disruptive technologies that will drive digital transformation across all industries globally, with countries in Asia such as China and Korea displaying tremendous IoT potential and interest. The strategy that businesses in this region require in order to ensure success and emerge as digital winners without compromise, is to choose the right business-technology mix that drives innovation through digital transformation.
Anneliese Schulz is Vice President, Software AG Asia