IoT: Breaking Free From Internet And Things

How communities and data will shape the future of IoT in ways we can’t imagine

June 2014

IoT: Breaking Free From Internet And Things

How communities and data will shape the future of IoT in ways we can’t imagine

June 2014

Who will need IoT, anyway? Internet of Things technology has been hyped over the past years as the next big thing. But where is the demand for all this wonderful technology actually going to come from?

The key lesson from the smartphone revolution is that Apple and Google won not by product features, but by creating networks of entrepreneurs. These networks of entrepreneurs unlocked new demand by creating countless of apps and devices that no single company could ever imagine, let alone create on its own. This entrepreneur-driven demand has created a smartphone market that is several times bigger than the pre-iPhone one could ever become. The same will happen in the Internet of Things.

This report tells the story of how developer-entrepreneurs can push the IoT market to unpredicted heights, and how smart IoT ecosystem winners will reap enormous gains by leveraging developer innovations to boost their core business.

Why should you read this report?

  • You will see the hidden forces that will separate winners from losers and shape the future of IoT.
  • You will learn how to position yourself to benefit from random innovation, while others see it as a risk to be avoided.
  • You will learn how to rally external innovators and entrepreneurs to join your platform and how, together, you can find the killer app(s) of IoT.
  • You will learn how fostering a community of developers will make you money and make your products stand out in a sea of commodity hardware, connectivity and cloud services.

Key insights & graphs

Recombining different sources of data offers endless opportunities for innovation

“Up to now, the information gathered by [healthcare devices and their accompanying applications] lives in silos.”
Apple SVP Craig Federighi at the WWDC 2014 conference

The potential of data generated by a single device is limited. Recombining different sources of data however offer endless opportunities to generate new knowledge and drive meaningful action.

The name “Internet of Things” betrays a very device-centric world view - each device has its own application. What if we follow in the footsteps of renaissance astronomer Copernicus and put data in the center of the Internet of Things universe instead?

A community of entrepreneurs will drive value in IoT

Today’s forecasters predict fast, attractive growth of the Internet of Things market as it is. They promise tens of billions of devices in the market by the end of the decade, based on the current state of the market, known demand and technology evolution. They could be looking at the wrong metric, and underestimating the potential demand as a result.

Just like in the smartphone industry, the amount of devices shipped are the outcome, not the driving force of the market. Just like in mobile, the value will come from an army of Internet of Things entrepreneurs addressing thousands of user needs.

If developers and entrepreneurs adopt IoT technology as swiftly as they did Android and iOS, there will be well over 4 million IoT innovators at work by the end of this decade. Think about how much demand they could create for the Internet of Things industry.

To unlock the full potential of IoT, we need market-creating innovation

If anyone could have predicted where things would head in smartphones, it was Android’s Andy Rubin. By 2010 he had been working on Android for 7 years and the platform was in the market for almost 2 years. But even he – even then – did not expect what would happen.

In 2013, the global installed base of Android devices is almost five times the forecasts that Rubin used in 2010. Nobody in the mobile industry expected that smartphones would conquer the mobile world so fast.

The evolution in mobile in the past 6 years holds a clear lesson for the Internet of Things. To realize its full potential, the fledgling IoT industry needs to follow iOS and Android’s recipe of market-creating innovation driven by communities of innovators.

Value is created by making sense of data

Connectivity and devices are just enablers in the Internet of Things. The real value for users is created by making sense of the data that those devices generate.

Sensors generate data, data produces knowledge, knowledge drives meaningful action. This is the core mechanism of how IoT delivers solutions for people.

Beyond APIs - the need to persuade developers

“Managing platforms is a human art,” says Todd Lutwak , eBay veteran and currently partner at Andreessen Horowitz. "With platforms, you are not managing software; you are managing people. Each segment has vastly different motivations and needs to succeed on a platform."

The ecosystem equals the platform technology plus people (individuals and companies) plus rules on how they interact with each other. The technology is the easy part.

You are competing for the time, effort, attention and money of developers with hundreds of other tools, APIs, programs and markets. Persuading developers – people – to join you will take a stellar execution and clever developer marketing plan, not just a decent API.

Table of Contents

  • Supercharging the Internet of Things
    • From business-as-usual to harnessing communities of entrepreneurs
  • Re-discovering the Internet of Things
    • Who will need IoT anyway? (Think demand, not technology)
    • Where does demand come from? Developers, Developers, Developers
    • Speed of innovation beats enterprise pockets
    • IoT is not about Internet, nor is it about Things
    • One question - Thousands of correct answers
  • The human art of managing Internet of Things platforms
    • Empowering innovators
    • Not every developer is trying to get rich
    • Hope for early adopters, money for pros
  • How developers make you money
    • Let developers boost your core business
    • Open, closed or both?
    • Avoiding the commodity trap
  • The unexpected future of IoT

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