As I mentioned in my previous blog, 2016 was a great year for the IoT. We saw a huge spike in IoT products hitting the market and more interest from product companies looking to move into connected product companies than ever before. So where will 2017 take us? Here are a few thoughts:
Internet of Things/IoT as a Descriptor Will Begin to Disappear
Even toward the end of this year, we saw less and less use of the term “IoT” in favor of more descript – “connected” products, devices, wearables, etc. The reason being is that the Internet of Things is a really broad term. One that actually refers to the full network of IoT devices – not the devices themselves. When the IoT was first talked about, it was referred to in this way – and as companies began to develop for the IoT it was the best way to describe it. Today, we are seeing vendors and product companies moving away from that term and focusing more on their specialization as opposed to the whole ecosystem and I suspect we’ll see more of that in 2017.
Security Will Continue to Dominate Conversations
It’s no secret that security breaches this year dominated many IoT conversations. While the most recent security stories focused on older IoT devices like routers and DVRs, it was definitely enough to get the whole industry talking. While I don’t believe these conversations were enough to shake consumer confidence or affect business decisions to offer connected products, it certainly pushed security up to the top of the priority list (as it should be). In 2017 we will likely see these security concerns push standards forward and may even see regulations as they pertain to privacy and data sharing. We will also see security solutions emerge specifically for the IoT. As we have discussed time and time again, IoT brings with it a whole new set of security challenges and security needs to be purpose-built for the IoT (i.e. we can’t just retrofit current security solutions) and that is a big opportunity for competitive differentiation for platform vendors as well as an opportunity for the entire security industry.
Customer Experience and Engagement Will Become a Lead Business Driver
Up until now, many companies have focused their IoT initiatives on simply getting a product connected to the Internet. It’s trendy, modern and distinctive as a competitive advantage, but it’s so much more than that. And as more and more companies get connected businesses up and running – the true benefits have begun to emerge. It’s certainly still about revenue, but the difference is how that revenue is coming in. Traditional product companies rely on that initial sale with the hopes that customers will continue to upgrade over time. IoT product companies, on the other hand, rely less on the initial device purchase and more on recurring revenue opportunities, subscriptions, upsell opportunities, etc. The key to making this happen is providing a killer customer experience and using the device data to better understand the customers’ needs and wants. Having deeper relationships with customers allows companies to provide a more personalized and delightful customer experience – leading to customer loyalty – and additional revenue opportunities.
In addition to the thoughts above, I also believe we will see system integrators will become key partners for the vendor community, Alexa or something like it will emerge as “iPhone” for the IoT, and standards will be developed for networking interoperability. Just as 2016 was both predictable and surprising all at the same time, 2017 will likely be no different. Here’s to another successful year in the world of IoT.