The Internet of Things market is about much more than devices, electronics, hardware, software and connectivity solutions.
It’s about achieving goals and companies want to work with service providers in order to succeed in their Internet of Things deployments, especially when they move from pilot projects to scalable projects.
The need for services and the increasing choice for fully managed services, including aspects such as security, has boosted a whole Internet of Things services economy.
How and why the Internet of Things services market is growing
According to a report by TechSci Research, entitled “Global Internet of Things (IoT) Services Market By Type, By Application, By Region, Competition Forecast & Opportunities”, the global IoT services market will grow with a compound annual growth rate (CAGR) of 24 percent until 2021.
The report defines services supporting essential components and features of IoT networks as IoT services. We look at it from a larger perspective.
The report also gives various reasons for this growth, including of course the growth of the Internet of Things space as a whole and the big data “volumes” it comes with (why data analytics and security are both so important).
However, for us the real reasons why IoT services become ever more important have everything to do with:
- the fact that Internet of Things projects become more business-critical,
- challenges such as security and the capability to deal with data are huge and
- the simple fact that the Internet of Thing in business and society is very connected with other disciplines and no company can do everything alone.
In that sense the growth of the IoT services industry shouldn’t come as a surprise as gradually the focus will continue to shift from the hardware and connections to the benefits and outcomes of Internet of Things projects, including all aspects, components, technologies and precautions to make projects work safely and effectively.
The focus on services will disrupt the Internet of Things industry
When thinking about the need for services, we also must issue a warning to the Internet of Things industry. Today, the big players are already very actively moving towards added-value and managed services, even if they have a hardware and/or software and/or connectivity background.
Unless the others who specialize in chips, sensors and networks want to face hard competition for a long time or want to be bought by bigger players, it’s important to remember what happened in the beginning of the Internet.
In the first years of the Internet we were still talking about things like modems and routers and connectivity and Internet Service Providers (ISPs). Today nobody cares about that anymore as the Internet is just part of our lives.
Many ISPs were acquired by telecom firms but many went bankrupt too. And the same goes for several companies who specialized in the hardware and software too much without thinking about use cases and the future. There used to be a saying in those days: get big, get niche or get out. Maybe it’s good to remind it and add ‘get focused on outcomes and extremely customer-, value- and user-centric’.
You cannot bet on one horse, unless you can have the best horse and that horse will be needed for a long time.
One day the Internet of Things will just be a normal part of our lives too where the only real questions will revolve around what we do, at least if other challenges (security…) are properly tackled. People who use the Internet today care about applications and services. IoT service providers need to focus on the outcomes and the Internet of Things as an Internet of Services too with the benefits, users, security and data excellence in mind.
More about the report from TechSci Research
Top picture: purchased on Shutterstock. Copyright: one photo Internet of Services picture: purchased on Shutterstock. Copyright: BeeBright.