IoT: the biggest driver of DX

Telcos have a huge part to play in IoT and not just from a connectivity point of view
Paul Black: IDC expects to see LPWAN take as much as 25% share of the market by 2020.
Paul Black: IDC expects to see LPWAN take as much as 25% share of the market by 2020.

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By Paul Black

Unless you’ve been hiding under a rock for the last 12 months, there’s a strong chance you’ve at least heard about the so-called Internet of Things (IoT). At IDC, we talk about the 3rd Platform technologies of cloud, mobile, big data, and social business and their role in driving digital transformation (DX) and facilitating the spread of digital accelerators such as cognitive computing, robotics, next-gen security, and 3D printing.

The emergence of these solutions has pushed the DX conversation into every boardroom and stakeholder meeting in the Middle East region. But for me personally, the proliferation of the Internet of Things will be the single biggest driver of innovation and transformational change we will witness as we venture towards 2020 and beyond.

Just as happened with cloud, the emergence of IoT has been surrounded by a certain amount of hype, and this will inevitably lead to some failed projects. While this may cause a sense of fatigue to slowly creep into the picture, these failures are not going to jeopardise the spread of IoT, so it is important to view them as part of the overall learning curve.

Indeed, the market is set for significant growth, with IDC forecasting the total Middle East IoT opportunity to be worth $4 billion in 2016, rising to just under $8 billion in 2020. This will be fuelled by the emergence of best-of-breed solutions (from an end-to-end perspective) that will address not only the requirements of customers in the government and large enterprise segments, but also those in the burgeoning SMB space.

When considering use cases around autonomous vehicles, manufacturing, agriculture, smart homes, and wearables, IDC estimates that – globally in 2016 – more than 4,800 devices are connecting to the Internet of Things every single minute. The leading industries paving the way for IoT are manufacturing, fleet management, and infrastructure (smart buildings).

But IoT is not just about smart things, or even about connecting these smart things together; ultimately, it is about building a system of intelligence, as the value of any IoT solution is directly linked to the speed and frequency at which data can be analysed. This, in turn, enables organisations to accelerate their decision-making processes and improve their rate of business innovation, thereby enhancing their competitiveness while significantly increasing the value of the overall IoT ecosystem.

Some interesting mergers and acquisitions have taken place in over the last 12 months or so, and I expect this trend to continue as leaders of industry increasingly embrace diversification and innovation as strategies for staying ahead of the competition. All this means that the partners of today may well become the competitors of tomorrow, particularly as emerging IoT use cases reveal how the value of data can be manipulated in so many different ways.

Telecom operators potentially have a huge part to play in IoT, and not just from a connectivity point of view. Indeed, they should look to play a lead role in bringing the varied and dispersed IoT ecosystem together. Often used to being the major players, telcos now find themselves serving as partners for a hybrid of solutions. As such, a change of strategy may be required when looking at what solutions are right for their own particular markets.

We have already seen that IoT solutions designed for Western markets cannot just be slotted into the local markets of the Middle East. But telcos have a distinct advantage when it comes to their local leverage, relationships, and knowledge of the market, all of which mean they are in a prime position to understand exactly what will work best for their customers.

Connectivity to IoT networks is currently dominated by WLAN, followed by cellular; but as the market develops, IDC expects to see Low Powered Wide Area Networks (LPWAN) take as much as 25% share of the market by 2020. Ultimately, whichever connectivity method is used, it is important that businesses never lose sight of the critical role that security has to play, incorporating it into the DNA of every single IoT solution that is deployed.

About the author

Paul Black is the director of telecoms, media and IoT at IDC Middle East, Turkey & Africa.

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