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Update on the promises of the Internet of Things

April 25, 2018.
For several years now, the Internet of Things (IoT) has been the talk of the technological town. The promise of connecting millions of devices, from toasters to automobiles, seems to be on the brink of materializing, as experts tout the advantages of interconnecting the objects that surround us. While the idea is appealing, its execution has left much to be desired, with many of the promises of interconnectivity not materializing. Could we now be witnessing a consolidation of the industry?

To give an idea of the significance of the market: Gartner estimates that 21 billion objects will be connected by 2020 and, by the same year, according to IDC, IoT-related investments will reach 1.29 trillion dollars a year.

The problem

The market is definitely there. The problem is that current development efforts are chaotic, in an environment with no interoperability standards and very real security risks.

But this is nothing new; just as chaotic was the growth of many disruptive industries throughout history. At inception, smaller players compete with larger ones, while the technology that supports transformation evolves at breakneck speed. History has also shown that consolidation is usually the first step towards universal adoption.

Are we there yet?

Last year, IBM brought us a step closer to industry consolidation when it opened a new headquarters dedicated to the Internet of Things, in Munich, Germany (an investment worth over 200 million dollars). It also announced that it is currently cooperating on IoT-related initiatives with, among others, Visa, Bosch, and the French national railway company, the SNCF. These projects, based on Watson, IBM’s proprietary artificial intelligence technology, are part of the 3 billion dollar investment over four years that IBM announced in 2014.

Thanks to its partnership with Visa, which controls 60% of all credit-card transactions in the world, authentication technologies will be integrated on IBM’s Watson platform, turning any Watson-based connected object into a de facto Visa payment platform. This means that consumers will be able to use any Watson-connected object to make purchases absolutely seamlessly. For example, a printer could order ink for itself as soon as it gets low, without any human intervention. This is perhaps the first real, viable example of an IoT-commerce joint venture.

Azure Sphere, Microsoft.

In the same vein, IBM’s partnership with Bosch, the German manufacturing behemoth, will mean that Bosch products (appliances, tools, car parts, etc.) will benefit from IBM’s sprawling network for the storage, deployment and securing of updates. For example, Bosch will be able to automatically deploy updates to millions of connected objects thanks to IBM’s standardized procedures.

Meanwhile, Microsoft, another major player on the market, has just unveiled a most interesting security-focused IoT platform: Azure Sphere. This platform combines custom microcontrollers, cloud-based service and a Linux-based system (a first for the Redmond giant).

Though some will see the beginning of consolidation as the end of innovation, at the end of the day, cooperation between the world’s major players will clarify rules and, in the end, speed adoption by consumers.