As 2017 comes to an end, a flood of 2018 predictions and trend-spotting articles flow into our news feeds. It’s actually an exciting time. Even though the end-of-the-year rush is chaotic, it also brings a fresh, and hopefully, optimistic view of new things to come with the new year.
Daniel Newman, a contributor at Forbes, recently published his article “Top 8 IoT Trends for 2018.” I really enjoy reading his articles and often take-away a number of new inights from them. Using his IoT Trends as a baseline, here is my perspective on those trends for 2018 with an added “ninth” trend from me:).
The IoT Will Grow specifically among Retail, Healthcare and Industrial/Supply Chain Industries
I agree with this trend although I question whether Healthcare should be included in this group. Improving customer experiences, reducing operational costs and and increasing productivity will drive these industries. Traditional retail is getting beaten up badly so innovation and digital transformation has to drive change or else we’ll see even more declines in 2018.
I think healthcare, as a whole, will be slow to adopt the IoT due to security concerns, organizational challenges and data management issues. Sure, there may be a few healthcare pioneers that breakout with significant IoT initiatives (or at least POCs), but I don’t envision real wide-spread adoption.
Transportation and industrial/manufacturing are going to continue to drive the IoT. In many ways this is simply because they have had a head-start moving towards automation for many, many years. The challenge for these industries is managing data and actually turning it into actionable insights.
It Will Also Become More Fragmented across Standards creating Compatibility challenges
I hear mixed opinions around standards among the companies I speak with. The lack of standards will add costs for implementations and could impede longer-term data sharing but I think its a typical situation for every emerging technology. As the mammoths enter the market in communications, as device makers get weeded out by hardware behemoths and so on, standards will form. At this stage of the IoT lifecycle, I don’t see standards impeding implementations because the innovators and early adopters will find ways to move forward,
Greater Security Concerns
Clearly if I was a gambler I would bet big on security concerns continuing to trend in 2018. But this isn’t an Internet of Things concern, its a widespread digital technology one. As global cyber-threats increase and more devices get connected, whether smartphones, tablets, TVs, any devices that accesses the Internet, security will become a greater issue. Although I think this is a very real concern, I also think its an over-hyped concern specific to the IoT. It’s much bigger – a global digital concern that everyone needs to be working to solve.
Mobile Platforms Will Make More Sense
I agree with the transition into more mobile. Google is pushing hard towards mobile-first as voice-activation continues to grow. I think application platforms will be agnostic and serve experiences, whether mobile or connected, in whichever way the end-user needs to monitor and manage the devices and data.
Marketing Efforts Will Continue
I’ll come at this trend in two ways. First, the amount of noise in the IoT market right now is ridiculously loud. The market is fragmented with a ton of different IoT options. I recently heard a story from an end-user that assessed fifteen different IoT options and walked away from them all! They couldn’t cut through the fluff to get to the core of what benefits and challenges they would have to overcome in order to achieve their objectives. In this case, marketing efforts will continue creating confusion in the market. Eventually the “best-of-breed” will emerge. It reminds me of when the Cloud was emerging and the same loud noise was being generated by marketers.
Second, marketing as an industry loves data so the IoT will enable marketers to have more data to manipulate in order to tell grand stories!! (full disclosure: I’m a 18+ year B2B marketer.) Seriously, A customer insights study stated that by 2020, brand will differentiate less on price and product and more on customer experience. I think what will impede the IoT in 2018 (and even longer) is a lack of creativity on how many problems the IoT can solve for businesses.
Companies Will be Pushed to the Edge with Data
I think “it depends” on the use case for each company. The use cases, for example, that demand real-time data monitoring will absolutely consider moving to the edge. In other uses cases, pushing data into the cloud for processing will work just fine. I do agree that edge computing represents a major market opportunity which is evident from Dell’s massive investment in this space.
Need Advanced Analytics like AI and Machines to Help Manage It
I wrote about the hype of AI and machine learning earlier this week. I guess it depends on the timeline given to a “trend.” I think AI and machine learning represent a massive “later stage” opportunity for a vast majority of businesses. Most who claim AI now aren’t actually employing AI. You hear this repeatedly from VC firms. So many start-ups claim AI and yet few actually deliver it. I believe the near-term trend is towards companies actually leveraging the data captured from their connected devices to gain visibility into important operational metrics and triggering automation to improve customer experiences. This isn’t AI but business intelligence generated from actually using, organizing and visualizing data at scale. From a marketing perspective, Google Analytics has been available for more than 15 years and its utilized by millions of businesses. Yet, I bet less than 15% of those businesses are actually using the data available to make better business decisions. And I wager, even less are using all of the advanced tools offered, for free, on the platform!
Lots of Money will flow into the IoT
I absolutely agree! The IoT is a HUGE market and in many cases, it solves real business problems. It’s also a fragmented industry with a lot of players vying for the top 1 or 2 positions so VCs and private equity are placing their bets on the potential winners. Again, I think the hardware and communication (e.g connectivity) space for the IoT will be consumed eventually by the big brands. They will either eat up the most promising start-ups or push them aside to dominate these markets. These are lower margin spaces where scale wins and IT departments prefer to stay with the incumbents (the big brands.) I see hardware and connectivity as commodities long term. The big investment space, where value-added occurs, is in the application platforms that provide device monitoring, analytics, automaton and eventually extend into AI and machine learning. These platforms turn data into insights. The big players like Google, Amazon and Microsoft are moving towards this space but I think there is plenty of room for multiple players through targeting specific use cases, serving niche verticals and such.
The Ninth Trend – Changing Human Behavior in Organizations
I’ll also add a ninth trend that I think is most critical to the IoT. Most analysts view the IoT as a technology play. But from my perspective, I see line of business as the decision makers, not IT. The users are business people (operations, product management and marketing.) I think organizational changes have to occur within companies to fully drive the value from the IoT.
In my opinion, the common challenges of cross-departmental collaborations, agreeing on data standards within an organization, getting the data in an actionable form to the write business leaders and so on, require organizational and cultural change management efforts. Solving the technology challenges is much easier than altering an organization to actually put new data insights to use. I think in 2018, you’ll see more companies assigning VPs of Innovation to drive the IoT adoption who are also equally adept at change management to drive adoption of new data practices within their companies.
What do you think?