The term 'Internet of Things' has become so broad that tracking the pace of development of such technologies -- spanning industries from cellular to automotive, to hardware and software -- is a challenge.
For example, while FierceWireless:Europe set out with the seemingly simple remit of identifying the top disruptors in the IoT sector today, the responses we received from three leading analysts highlighted that compiling such a list does not do justice to the work being conducted by myriad companies developing IoT products and services.
On the technology side, our previous special report certainly highlighted that cellular NB-IoT connectivity faces challenges from emerging LPWA technologies including Sigfox, Ingenu, and LoRa.
However, in terms of companies, there are no easy answers regarding which are leading the way in terms of disruption. Analysts from 451 Research, Machina Research and Navigant identified more than a dozen companies, including telecoms operators, vendors and mainstream technology companies that can be regarded as pioneers of the IoT sector.
Companies and enterprise
"IoT is a gigantic, complex, space," said Christian Renaud, research director for IoT at 451 Research. "There are operators like Telefónica who are doing impressive things in smart cities (FIWARE) and integrating multiple new LPWA technologies based on different applications/use cases."
Neil Strother, principal research analyst for Energy at Navigant, told FW:E that big name companies including Qualcomm, Amazon, Alphabet's (Google's) Nest, Samsung, Apple, and Belkin are already disruptors in terms of the broader IoT sector. However, he noted there are also "a whole host of smaller companies and start-ups playing in this space" along with companies "that don't even exist yet", based on his approach to the market, which involves looking as far as 10 years ahead rather than focussing solely on the current state of the market.
Renaud explained that the sheer scale of industries that IoT spans is another reason that it is hard to pin down companies that are disrupting the space. For example "you have companies like Caterpillar and John Deere who have been doing M2M/IoT projects for many years and can point to billions of dollars of indirect/direct return on investment," he noted.
In the vendor space, "again it depends on the technology/market segment," Renaud added. He pointed out that companies including ARM and Intel are "doing disruption at the edge", and that the vendor market is seeing "new disruptions like Equinix introducing edge computing capability at the interconnect level of topology, which carves out a new market between edge and cloud for compute/analysis/storage."
Renaud, like Strother, is also in regular contact with start-ups that are "doing everything from edge analysis to security."
Matt Hatton, founder and CEO of Machina Research, questioned whether traditional vendors are truly disrupting the market in terms of IoT. "They've identified a new growth opportunity and they're pursuing it." Similarly, many of the big technology companies "are also embracing the opportunity and really we're not seeing any of them being disrupted as such," he argued.
Instead, Hatton pointed to companies including ThingWorx, Aeris Communications, Stream Communications, wot.io, Ingenu, Sigfox and Xively as those that are "doing some interesting things that are helping to create the market."
The term 'disruption' could equally be applied to companies that would not traditionally fall under the IoT moniker. Car sharing company "Zipcar would be a great example," Hatton explained. "One wouldn't naturally think of them as being 'IoT', but what they're doing is disrupting the car ownership model. Even the auto OEMs are getting in on the act and copying that model."
Such disruption to traditional car ownership models is something that was predicted almost two years ago by Magnus Lundgren, who was then VP of Ericsson's Connected Vehicle Cloud division. Speaking at the Connected Cars conference on the eve of the 2014 LTE World Summit in Amsterdam, Lundgren told FW:E that connected cars may enable people to use a nearby vehicle when they need to make a journey rather than own a car outright. The concept is similar to bicycle rental schemes adopted by cities including Barcelona and London.
Strother noted that every company "has a different place in the stack" in the broader IoT sector, "from chipsets to full hardware, to software solutions and services." He argues that it is currently too soon to assess the level of disruption each of those companies is having, or will have, "because many of these companies are figuring it out as they go along.
"They don't know what they don't know yet, but they are on a quest to connect things, and ultimately the people behind these things, in a giant system of systems, with uncertain outcomes. Call it a journey more than a final end point," he explained.
The operator opportunity
While the analysts raise questions over which companies and technologies can be classed as disruptors in the IoT sector, they broadly agree that the shift towards connecting 'things' poses a challenge to traditional communications service providers.
Renaud said that wireless operators "have the choice to be a bandwidth provider only, or become involved more in the data stream [by] providing their own edge analytics at their POPs, like Equinix is beginning to do."
Machina Research's Hatton agreed, telling FW:E that the emerging IoT market offers an opportunity to telcos. "All these connected IoT devices need connectivity and communications service providers are better at that than anyone." Operators are also "beefing up their capabilities in the IoT, adding connectivity platforms to make on-boarding and management more efficient," and diversifying into LPWA networks.
Strother also sees opportunities for operators in the IoT sector, but was cautious as to whether they will be able to cash in on those prospects.
"Traditional wireless players face a challenge because they are great at connecting lots of devices like phones, tablets and laptops, but the scale of 'things' is exponential, and it's unclear if they can handle the explosion of connections that will happen. Can the traditional networks handle it? Maybe with 4G and 5G combined, but no one knows for sure."
That uncertainty is certainly fuelling operators' efforts to develop suitable IoT technologies, such as cellular NB-IoT. However, Strother noted that operators are also developing strategies that focus on a particular sector of the market of things, including connected cars, lighting systems, and industrial machines.
"I suspect we will see a number of upstart networking companies trying to get some piece of the networking pie for IoT beyond the traditional players. Then, over time, there will be consolidation," he said.
Renaud noted that perhaps the only certainty for operators in the IoT world is that "carriers that cling to cellular as the only choice will suffer competitively versus carriers who are embracing multiple, application-specific wireless technologies like Orange and Telefónica."
The analysts were also broadly in agreement when asked which IoT technologies they expect to cause the most disruption.
As noted, Hatton is backing LPWA as one of the technologies that will upset the established order of communications technologies.
While he noted that, from a technology standpoint, "it's not so much about disruption as creation," he said that LPWA makes "a huge number of use cases" possible due to its low cost and the long battery life the technology offers. Those features make LPWA highly suitable for remote nodes that may only have to communicate with the network periodically. However, Hatton points out that vendors are making a "plethora of tools" available that "make IoT simpler to deploy."
Machina Research in January predicted that at least one of the current crop of LPWA technologies would effectively be "rendered redundant" during 2016, as opportunities for deploying the technologies will be limited on a country-by-country basis.
For Renaud, NB-IoT will be soon be a disruptive influence in terms of IoT technology, but he also noted that "all of the current LoRa options" will also be challengers "because they represent a completely new device-centric network [compared to] the LTE/cellular user-centric network."
Strother offered a more generic view, explaining that technology disruption will occur in "chipsets, networking platforms, wired and wireless protocols, software platforms, standardised tools for developers, [and] analytics focussed on IoT".
He said those areas are the "fundamental components of connecting things and making them work together. Without them, things just won't work well together and we won't see much benefit."
Strother's point regarding interoperability highlights that the biggest disruption caused by IoT may lie in the task of actually deploying solutions.
"[I]f these building blocks, the hardware, software and solutions, don't talk to each other in some way, and in a secure way, the promise of IoT will be thwarted," Strother cautioned.
That note of caution is backed up by a Machina Research survey conducted in 2015, which Hatton noted revealed that the "single biggest barrier for companies deploying IoT is the complexity of doing it."
However, Hatton added that there has been "an explosion in the number of IoT software platforms, developer tools and so forth that help to head off that challenge."
Cost is another key challenge, Renaud said. "The capex involved in rolling out new network types (LoRa, NB-IoT, LTE-M) is going to be considerable, so operators are going to need to add more revenue-generating services beyond basic connectivity."