The “internet of things” is set to greatly impact the telecommunications space due to the predicted billions of new devices forecast to tap into wired and wireless networks. In gearing up for that opportunity, telecom operators are beginning to bolster their networks and internal operations in order to take advantage of the potential.
One of those carriers is Verizon Communications, which over the past year has announced a number of internal initiatives like its ThingSpace program, as well as a number of partnerships and key acquisitions in the IoT space.
During the recent CTIA Super Mobility event, John Stratton, EVP and president of operations at Verizon, noted that while the challenges to implementing and supporting all things set to be part of IoT are daunting, the reward looks worthy of the risk.
“It’s clear there is a multibillion-dollar opportunity for our industry right in front of us,” Stratton said. “The risk is that we are paralyzed and don’t scale this to the massive level needed. … We have the opportunity t power these game-changing platforms that power IoT.”
In terms of the challenges, Stratton cited three significant hurdles in public policy, expanding of the ecosystem and the need to relate with communities set to benefit from IoT.
Stratton explained the first step in the internal process is enabling a network to support billions of connected devices generating 10,000-times more traffic with mission-critical levels of security and support. The move for Verizon down this path started with its LTE networks, has been boosted by recent advances to that network under the “LTE Advanced” banner and are setting up the eventual launch of ”5G” technologies.
The carrier earlier this year issued a report detailing key market trends, use cases and business opportunities. Based on internal data, Verizon detailed year-over-year connection growth by vertical, with the energy/utility sector cited for the largest growth, followed by transportation/distribution, home monitoring, smart cities, agriculture and, bringing up the rear, health care/pharmaceutical.
“In our view, 2015 was the year IoT gained legitimacy,” Verizon noted. “Businesses budged off a ‘start small think big’ mindset. Today, they’re building IoT into future strategies and business models. Companies across all industries now have IoT squarely on their radar. The worldwide ‘Internet of Things’ market spend will grow from $591.7 billion in 2014, to $1.3 trillion in 2019, with a compound annual growth rate of 17%. The installed base of IoT endpoints will grow from 9.7 billion in 2014, to more than 25.6 billion in 2019, hitting 30 billion in 2021.”
Verizon identified four “key trends” impacting the space:
• Data monetization: “Nearly 50% of businesses expect to be using more than 25% of their data over the next two to three years. In order to monetize their data by creating and bringing new products and services to market faster, businesses will evolve from descriptive data collection to prescriptive data analytics.”
• Startups fueling growth: “In 2015, enterprise IoT startup companies outpaced funding for consumer startup companies by 75%.” Verizon’s experts say enterprise IoT startup companies will raise two- to three-times more in capital in 2016, compared to consumer IoT counterparts.
• Regulatory compliance: “As technologies like [radio-frequency identification] reach their limit, regulatory compliance has become one of the key driving factors for IoT adoption in industries like food, health care and transportation that need to closely track and act upon data across the entire supply chain.”
• Mass customization: “Network connectivity, low power devices and IoT platforms like Verizon’s ThingSpace are radically simplifying and democraticizing the process of building and bringing new apps to market, invoking the early days of smartphone app development.”
On this week’s Carrier Wrap we speak with Mark Bartolomeo, VP for connected solutions and IoT at Verizon, to discuss the carrier’s recent announcements, how the carrier sees the IoT space developing, challenges in the process and how “5G” network development is playing a part in its future plans.