IoT: Where are we Now and Why Most IoT Startups Fail

“Mobile has won,” proclaimed Google chairman Eric Schmidt on Bloomberg TV in December 2013. Now, what’s next? If you were at the recent ARM TechCon held in Santa Clara, California on November 10-12, 2015, it’s unmistakably the Internet of Things (IoT).

That, however, comes with a number of strings attached. For a start, ARM CEO Simon Segars persuaded the developers that “let’s get IoT right” before governments get involved. He outlined interoperability, built on layers, and security as the two key challenges. “Security has to be baked into hardware because you can’t upload security on a light bulb.”

Next, Eric Klein of Lemnos Labs told the attendees that we are at the base camp now in terms of the IoT deployment. “It’s mostly based on the usage of simple sensors.” Lemnos Labs is a venture fund for hardware-centric IoT startups.

IoT stack immaturity yields new business opportunities

Lemnos’ Klein, from his vantage point, said that there is no single IoT. He outlined three emerging IoT ecosystems: consumer, industrial and enterprise. “They all need different business models, and they are growing independently of each other while they have strong intersection points,” Klein added.

He said that consumer IoT is now the wild west while industrial and enterprise are just getting started. Moreover, Klein added, IoT stacks are still immature, which translates into new opportunities for developers. Take, for instance, garbage trucks that hover around the city streets just to find out that a lot of garbage cans are still not filled up.

Now sensors incorporated into garbage cans could inform trucks if it’s full or not, and as a result, garbage trucks could optimize their routes through smart overhauling and save a lot of money. And there are so many other untapped opportunities like the one mentioned above.

So why IoT upstarts have been largely failing so far? First, there is a need to provide IoT entrepreneurs the toolchains they require. Second, it’s imperative to go end-to-end to tap full value of IoT. For example, a phone or a wearable device tells us that we walked 360 steps, but that’s not enough unless it tells us how to make this information useful.

Eric Klein: ‘Consumer, industrial and enterprise are three emerging IoT ecosystems’

The tools will be required for connectivity, data and security, respectively. Then, Klein asked developers which tools they are going after. For the connectivity part, he quoted smart home, in which devices don’t interact intelligently so far. For the data part, Klein said that IoT developers have to sort out which portion of data needs to be fused and which data fraction has to be uploaded.

Then he explained the massive role of security in the IoT realm. Klein concluded his talk by emphasizing the need for better network architecture. “You should know networking better than Verizon guys,” he told IoT developers. ARM chieftain Segars had pointed to something similar earlier in the event when he defined IoT as the amalgam of connectivity and innovation. In fact, Segars used the phrase “The Internet of Connected Things.”

Majeed Ahmad is the author of the book The Next Web of 50 Billion Device.