Whether referenced as the fourth Industrial Revolution or the connected society, the billions of connections forming IoT will change the game for industries, enterprises and consumers. However, revolution is always triggered by the rise and demand of certain driving factors. Similarly, IoT and its development are also backed by certain key components. Ultimately, if organizations want to prosper with IoT, they need to consider who and what is driving this innovation.
Market drivers are the underlying forces and trends that make markets develop and grow. What are the drivers for IoT? What trends affect the mobile industry but also change and expand IoT? With emphasis on the cellular IoT, explore the key proponents that will enable mobile IoT solutions.
After careful analysis of public market information, opinion articles, research papers and tech company websites, 5G Americas identified in no particular order 14 cellular IoT market drivers:
- Third Generation Partnership Project (3GPP) standards. 5G will enable massive IoT and is being developed through the 3GPP technology standards to ensure a successfully connected world. The 3GPP work initiated in release 13 continues now in the 5G standards of releases 15 and 16 allowing a future-proof technology.
- Expanded internet connectivity. Machine-to-machine (M2M) connections will comprise 51% of all connected devices, numbering 14.6 billion by 2022, according to Cisco Visual Networking Index “Global IP Traffic Forecast, 2017-2022.”
- Worldwide high mobile adoption. The number of devices connected to IP networks will be more than three times the global population by 2022, according to “Ericsson Mobility Report November 2018.”
- Ubiquitous sensors. Sensors are becoming prolific; the larger the scale, the lower the cost. Lower cost sensors decrease the cost of deployment for IoT — including decreases in the cost of CPU memory, storage and megabytes — meaning more investment dollars for large processing systems.
- Large scale IoT investments. Large scale IoT investments are occurring in the market today, predominantly in industrial markets. The worldwide spending on IoT will continue an annual growth rate in the double-digits from 2017 to 2022 and exceed $1 trillion in 2022, according to IDC.
- Global application trends. For example, the use of video has grown tremendously in healthcare, public safety, entertainment and surveillance. Globally, IP video traffic will be 82%of all IP traffic for businesses and consumers by 2022 according to Cisco Visual Networking Index.
- New mobile tech. The emergence of new mobile technologies, including Narrowband IoT and LTE-M Category-M1, will alter the 3GPP standards that will coexist with 5G. The number of connections and traffic per connection over cellular networks will drive traffic volumes as organizations deploy IoT technology and the network speeds get In 2017, the average mobile connection speed was 8.7 Mbps, and that will more than triple to 28.5 Mbps by 2022, according to Cisco Visual Networking Index.
- Big data. There is a growing importance for automation, big data and other actionable knowledge that drives IoT by providing interconnection between various devices, machines or appliances that generate data. The goal is not merely to collect data, but also to extract valuable insights and information from the data generated by these devices.
- AI and machine learning. AI and machine learning have been around for some time, but certainly not at the level of implementation seen today. According to McKinsey, AI and machine learning were being used in 60% of IoT activities by 2018. This is spurred by the convergence of algorithmic advances, data proliferation and tremendous increases in power and storage capabilities at a lower cost. AI and machine learning are expected to outpace other technologies in 2019, according to McKinsey.
- Edge infrastructure. Edge computing and the cloud are slightly unpredictable due to network transformation. The low latency and reliability provided by edge computing are requisites for most IoT use cases. According to IDC, IoT deployments are fueling aggressive investments in infrastructure for new compute, storage and networking technologies at the edge. Deploying edge infrastructure, in turn, will drive many greenfield implementations resulting in the growth of the IoT market.
- Use cases. More use cases across vertical domains are providing the business case for greater market expansion. M2M applications that serve these use cases across many industries accelerate IoT growth, especially industrial IoT, smart cities and autonomous vehicles. Enhanced network capabilities are emerging and further stimulating the IoT application market. For example, support for optimized voice quality, more accurate device positioning and support for device mobility at high speed.
- IoT’s biggest challenge and concern is security. Through new 5G technology development, security assurance has evolved. Operating technology (OT) leaders are citing their concern, and moving forward with a focus on well encrypted and secured networks. 5G takes mobile to another level with a wide variety of new, advanced safeguards.
- IPv6 adoption. The transition from IPv4 to IPv6 is crucial. These developments are important because Asia, Europe, North America and Latin America have already exhausted their IPv4 allotments and Africa is expected to exhaust its allotment this year. Looking to 2022, Cisco expects 60% of IPv6-capable devices to be connected to an IPv6 network and IPv6 traffic will amount to 132 exabytes per month or 38% of total internet traffic.
- Open source for 5G. 5G will enable IoT, with the ability to connect more than tens of billions of sensors in the next decade. This level of scale may be supported by open source frameworks and platforms within that 5G infrastructure. Open source technologies support rapid innovation, easing concerns over intellectual property rights. It also permits innovation by integration, meaning developers create new systems by combining freely available open source components.
5G and IoT will revolutionize society, and this is only the tip of the iceberg. The IoT market will continue to develop with these 14 drivers and trends to energize and innovate for the future connected society and Industry 4.0.
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