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The inevitable fragmentation of IoT

The internet of things has finally come into its own. Although it’s still pretty green, IoT has established itself as a (reasonably) well-defined, financially sound and stable industry. Even more importantly, it has proven itself capable of providing real, undeniable value. From smart stormwater management systems that prevent flooding to smart home security systems that keep families safe — real IoT is already providing real value.

And now that IoT is standing on its own two feet, some interesting traits are beginning to come to light. Perhaps one of the most interesting of those traits is the actual shape of the IoT market. Or, rather, the lack of one. I often refer to IoT as the third wave of computing — preceded by personal computers and smartphones. And just like PCs and smartphones, IoT’s “childhood” is proving to be a bit chaotic. Major fragmentation complicates the market and leads to many short-lived start-ups and ill-conceived ideas.

Thankfully, for computers and cell phones, the “troubled pre-teen phase” didn’t last too long. Soon, companies like Microsoft, Apple and Android helped the industry “get a haircut and get a real job“, so to speak. With clear industry leaders ruling their respective roosts, the PC and smartphone industries consolidated and continued to innovate.

IoT bucks the trend

But for all the entrepreneurs and corporate innovators out there dreaming of their billion-dollar thrones atop the field of IoT, I’d suggest pursuing a different field. Because I’m extremely confident that IoT will remain fragmented for a very, very long time. Like, a forever long time.

That’s because IoT is fundamentally different than the types of computation that have preceded it. “The internet of things” is an immensely broad term. It includes everything from internet-connected air quality sensors to “smart” robo-pets that double as personal assistants. And there’s a market for both.

So, the next time the topic of IoT comes up in a conference room, just remember that the speaker could be referring to:

  • Home automation
  • Security systems
  • Fitness trackers
  • Traffic monitoring systems
  • Parking meters
  • Points of sale
  • Asset trackers
  • Manufacturing automation
  • Industrial equipment monitoring
  • Environmental sensor networks
  • Irrigation systems
  • Self-driving cars
  • Drones
  • Smart grids (i.e., connected energy meters)
  • Plus just about any other non-traditional object that could be connected to the internet (e.g. robo-puppies)

Because of this virtually limitless frontier, it becomes supremely difficult to “master IoT” as Bill Gates “mastered the PC.” IoT devices made to monitor the turbidity of volatile chemicals most likely wouldn’t thrive in the robo-pet market.

Unsurprisingly, this has left many eager entrepreneurs and investors scratching their heads. But, what those people find maddening, I find inspiring. That’s because, within this extremely fragmented environment, a culture of freedom, inclusiveness and experimentation is taking root.

I don’t doubt that clear industry leaders will eventually emerge from today’s jumbled landscape. However, I’m confident that the nature of “industry leadership” itself will take on a significantly different shape in the field of IoT. And if any businesses manage to establish the kind of market leadership we’re familiar with today, it will be those that master the building blocks of IoT rather than those that attempt to address a multitude of use cases.

But until then, our emergent industry will benefit immensely from this period of unimpeded exploration, experimentation and innovation. And I have no doubt that this unique stage of development will someday be recognized as essential to the long, life-changing history of the internet of things.

How startups can survive (and even thrive) in the IoT industry

Entrepreneurs looking to enter the IoT marketplace should begin by thinking long and hard about which specific niche they plan to go after. Startups without clearly defined, focused targets will quickly sink in a crowded sea with practically no salt in its waters. My company Particle, for instance, is an IoT device platform, which means that we provide the technology and expertise that companies need to get their IoT devices online. And although our customer base is quite diverse, our role in their products is always essentially the same.

In the simplest of terms, we support companies who join sensors and actuators with microcontrollers to solve problems. We do not do heavy computers, we don’t do streaming audio and video, we don’t do super-complex systems like self-driving cars, and we definitely don’t do robo-pets. Our market is still relatively broad, but we are unflaggingly focused on our area of expertise.

And that’s why we’re so damn good at what we do. We may never be the “Masters of IoT” like Bill Gates is for PCs; but we’re growing increasingly confident that we’ll be the masters of our own, powerful domain within this near-limitless landscape called “the internet of things.”

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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