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Future behemoths of the IoT

My colleague Jon Brown, vice president of market intelligence here at TechTarget, posed an interesting question the other day. What was the billion-dollar breakthrough business enabled by the Internet of Things?

After all, he pointed out, other technology revolutions have produced enormous, dominant companies like GE and Ford. In the PC era, Microsoft and Apple. In the Internet era, Amazon and Google. If you look at a technology like genetics, it’s easy to see how a technology like CRISPR could result in billion-dollar companies.

But what about the Internet of Things? It’s easy to see significant incremental improvements such as lower costs for logistics or, as GE likes to talk about, 1% improvements. But dominant new businesses that couldn’t exist without the new development?rawr-dinosaur-800px

My answer is that at least one of the dominant companies is already here in the form of Apple. I think the smartphone (and specifically the iPhone) is the first glimpse most of us had of the Internet of Things. It’s mobile, it’s packed with sensors, it leverages a Web back end for key functionality. And it gets increasingly hard to imagine living without one.

The incremental cost factor

The mobile phone world also gives us a clue about future dominant businesses: they are driven by the way a new infrastructure makes the marginal cost of certain applications low enough that they are worth doing in a widespread way. Consider, for example, Twitter. Its genesis was the arrival of essentially free SMS text messaging. It would almost certainly not be worth building out mobile data networks or the Internet in order to broadcast 140-character updates on our latest meal to the world. But when it costs next to nothing, suddenly everyone wants to join the Twitterati.

Whether Twitter enhances humanity or is a lasting company, it did essentially create one-sided “following.” This is an enormously useful capability in all sorts of contexts.

Darned nearly every iPhone and Android app you can think of would not be worth creating smartphones and 4G LTE networks just to have it. But at least a few of those apps are enormously valuable once you’ve got the infrastructure already in place.

IoT has the makings of a different and vastly more pervasive information infrastructure. The importance of IoT’s presumably rapid build-out is not that there will be 20 or 40 or 117 billion “things” on the Internet by 2020, but that they will be building an infrastructure with entirely new trust relationship systems, with data aggregation capabilities that enable analytics on a scale we haven’t seen before, and that the administration (if it can be called that) of the infrastructure will have migrated to a place where the things (including IT network components) are considerably more self-organizing than they are at present.

The question then becomes: why is it suddenly so much cheaper to do that it’s worth doing on a global scale? Therein lie the dominant behemoths of the IoT era.

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Is the point that IOT or IIOT or IOE will produce new corporate "behemoths", or could it be something different?  What if the commercial/retail IOT produces new or expands existing "behemoths", while IIOT uses a slightly different infrastructure with the goal of enhancing profitability for existing medium to large manufacturing/intermodal/industrial/government entities?
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The question is whether IOT or IIOT will create new or expand existing behemoths, or will retail IOT split from IIOT?  I contend IIOT will largely use a parallel, lower cost, and lower data rate infrastructure than retail IOT, with a different value model.  I believe the IIOT path will focus on improving returns based on increased effectiveness and efficiencies while IOT will primarily focus on new markets.  If my view is valid, this means IOT should create new or expand existing behemoths, while IIOT will increase returns for existing and perhaps new medium and large manufacturing/intermodal/industrial/industrial service businesses.
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This is a "non-story".
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@EBaldwin -- As I'm thinking about it now, you may well be right that IIOT and IOT will behave differently with regard to "behemoths." Or rather, they *will* behave differently, and you raise a good point that IIoT has been mostly focused on incremental to date. Not clear to me that incremental is the *only* thing that can happen in industrial. I can imagine huge disruptions in small scale manufacture and in electrical power management that would be driven by "thingyness." Are you saying it's not possible or just not likely?
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@Darwood -- Well, it's an opinion piece; it's not really trying to be a news story. IoT Agenda isn't trying to be all news (though it will certainly run news pieces and features like all the other TechTarget sites). There's also going to be plenty of content that is industry participants sharing their point of view. Anyone who'd like to be one of these contributors should let us know at editor@iotagenda.com.
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Because of the business value-adds, I think it's unlikely that IIOT will create behemoths.  This does not mean HW (e.g. sensor and GW), SW, IT, and IIOT service providers won't see substantial growth, but I don't see this producing new "Apples". 

I do however see major disruptions, and then incremental improvements to these new paradigms in SCM, BI/Data Analytics, data storage technology, increased VM capabilities for DCs and personal devices, and SW (e.g. modified API structures).

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