IoT Ecosystem > Enterprise IoT Blog



Analytics, Services and Security Will Be Big IoT Money Makers

by User Not Found | Sep 28, 2015

“Show me the money!”

The now legendary catchphrase uttered by Cuba Gooding, Jr.’s character, Rod Tidwell a football player in the 1986 film “Jerry Maguire” perfectly encapsulates the question on everyone’s mind with respect to the Internet of Things.

Everyone is certain that IoT is a money making machine that will help vendors, services providers, systems integrators and corporate enterprises drive revenue and cut costs. Everyone has a prediction about how the many billions of connected, smart devices will generate trillions in revenue over the next three, five and even 10 years.

In IoT environments where devices, people, data and applications are all interconnected and can utilize embedded analytics to provide alerts and predict outcomes in real-time, the possibilities for making money are endless.  What’s not clearly defined in these rosy prognostications is exactly who will make money in IoT and what products and vertical market segments represent the best opportunities in this vast realm.

Strategy Analytics “Who Will Make Money in IoT?” Report  examines of all of these issues in depth.  The Report is based on SA’s primary research, vendor and enterprise customer interviews and the results of our recent independent “Strategy Analytics 2015 IoT Deployment Trends and usage Survey” which polled 450 businesses worldwide in June.

The Who Will Make Money in IoT Report indicates that Big Data Analytics, Services (integration, interoperability) and Security will provide the biggest revenues in IoT.

While embedded intelligent sensors also play a crucial role in IoT deployments, these are commodity items whose costs will be incorporated into standalone hardware and connectivity gear. It’s highly unlikely that vendors will break out these costs as a separate line item.

The value in IoT and the biggest revenue opportunities lie not in IoT sensors, modules, components and devices (which are already becoming commoditized as mainstream adoptions ramp up), but in the associated Analytics applications and services. These include everything from hosted cloud services or managed platforms and services delivered by broadband, telecommunications and utility providers. Additionally, systems integrators, consultants and enterprise vendors with mature, extensive service and support organizations may all strike gold by providing technical service and support around deployment, management, integration and interoperability services.

Who’s making money in IoT now and who has the potential to make money going forward?

At present, the SA Report shows that unsurprisingly it’s the large established vendors – including chipmakers, software and services vendors and Mobile Network Operators (MNOs): ARM, Ltd.,  AT&T, Cisco, Dell, Google, IBM, Intel/Wind River, Microsoft, Oracle, SAP, SAS and Verizon, to name a few.

There are also many start-ups and niche market players that are beginning  to gain traction by supplying IoT analytics packages and solutions for specific verticals like financial, healthcare and retail. IoT also represents a lucrative market for services providers like Accenture; while other firms like ARM (which recently purchased Sansa Security) and smart phone maker BlackBerry are flocking to the burgeoning security segment of IoT.

Figure 1: IoT Revenue Percentages by Product, Service Type 2015 - 2020

 

                                                                                                Capture   Source: Strategy Analytics 2015

Analytics, Services and Security offer the most money making potential because of the immediate and inherent business value they deliver.  In IoT the value lies not in simply connecting devices but in enabling organizations to sift through the data deluge and take proactive measures to adapt and change their business initiatives and business models to reflect current market conditions and anticipate future trends. Thus, IoT allows vendors and corporate enterprises to move beyond cost cutting initiatives and create new value chains and services.

The Who Will Make Money in IoT Report also gives a detailed analysis of major IoT vendors. We compare/contrast product offerings, strategy and positioning of companies such as AT&T, Cisco, General Electric, Google, IBM, Intel, Microsoft, PTC, SAP, Verizon and Vodafone. And we provide a detailed overview of such pivotal IoT market segments as Healthcare and Industrial IoT.

Our SA research also finds that the IoT and Big Data applications that are currently most in demand are the ones that deliver tangible and practical business value and impact ongoing daily business operations. They include:

  • Office security and video Surveillance
  • Smart Building Controls
  • Billable services in finance and healthcare
  • Healthcare analytics

 

Contact  SA for more information and insight on current and future IoT revenue drivers.  

Previous Post: Key Themes Beyond the Hype: IoT at MWC 2015 | Next Post: Smart Cities are evolving, with ICT revenues expected to reach $977 Billion by 2022
Leave a comment