IDATE targets the big IoT markets

The whole concept of the Internet of Things (IoT) is at one and the same time incredibly vague and loaded with potential, two factors that make considering what might it might achieve for any one business a rather difficult task.

The growth rate of `things’ being attached to, and accessible via, the Internet is astonishing, and the potential of what might be achieved with it enough to make science fiction writing seem lame by comparison. Much of the initial hype around IoT is, not surprisingly, geared to what might be possible for individual consumers. Once every device in the home is connected up, plus every device in every place of entertainment or interest, and every form of transport or connection between each and every device, we can only speculate what each of us might be able to achieve.

But there are also major business possibilities to be created and exploited, particularly where the ability to remotely control and monitor `things’ around the world could lead to a whole new range of services being created.

We are now at the point where information is essential to help businesses make a start in understanding at least some of the possibilities, and this is the target the French research and analyst company, IDATE has set itself with its recently published report `Internet of Things: Outlook for the Top 8 Vertical Markets.’

This provides an opportunity to clarify the frontiers of new, promising markets and analyse the key building blocks. market structure, main player strategies, and the dynamics of the key vertical markets. IDATE sees these as being automotive, aeronautics, energy, food and retail, connected home, healthcare, and textiles.

The company defines the Internet of Things as a concept whereby any item can connect to the Internet to retrieve information to enhance its intrinsic value. The scope of IoT is therefore very broad. It includes communicating devices and Machine to Machine (M2M) communications, but it aims to go beyond M2M by enabling any object to connect and leverage the Internet  using the Internet of Objects (IoO). This can include devices that do not contain the electronics required to connect directly to the Internet but which can connect using an intermediate device.

According to this definition, 15 billion things (machines, connected devices and objects) were connected to the Internet in 2012, which was up nearly four-fold from 4 billion in 2010.

Samuel Ropert, project leader of this report expects to see some 80 billion devices connected by 2020. “IoO will represent 85 percent of the total IoT, ahead of communicating devices with 11 percent and M2M with only 4 percent," he suggested.

In terms of growth, IDATE’s report predicts IoO will still lead with a 41 percent CAGR between 2010 and 2020, followed by communicating devices with 22 percent and M2M with 16 percent.

IDATE sees IoT encompassing multiple and heterogeneous building blocks where the underlying M2M and IoO run over different hardware and communication technologies. For example, while RFID and 2D barcodes are used to interact with objects in the IoO concept, M2M application will rely on several different networking technologies that allow the machine to communicate and transmit the data it has generated (or is meant to receive, depending on the application and the machine).

While cellular technology is often selected for M2M deployments, new communication technologies such as SigFox and Neul (better designed for traditional metering M2M applications) have entered the market in recent years and could act as game changers in the near future. Nevertheless, implementing an open Internet of Things requires a new kind of architecture with scalable naming and addressing (ONS) technologies and new sustainable tools to access the data, as the Internet of Things is designed to browse vast (M2M and IoO) databases.

M2M and IoO are driven by vertical markets and will therefore be impacted by vertical environments, but adoption levels will vary between the different vertical industries. Business maturity also varies considerably from one industry to another. Indeed, both M2M and IoO applications rely on cost-saving objectives for users, so ROI time is critical.

Implementation is not always geared to the same objectives, however. While the textile industry targets item-level deployments for inventory, The IDATE report suggests that manufacturing-type industries like automotive and aeronautics will use RFID for quality processes across the supply chain. This is where different parts are assembled to form a finished product  and only the RTI is tagged, not the part itself.

The company expects that by 2020 the leading verticals in terms of connected objects (IoO) will be the pharmaceutical and textile industries.