Executive Briefings

Hype Peaks for the Internet of Things - But It's Here to Stay

Analyst Insight: The Internet of Things is really three interrelated phenomena. As a technology phenomenon and as an application phenomenon, IoT has been steadily evolving for several decades. It is the recent surge of IoT as a marketing phenomenon that is driving all the attention and excitement at this time. That attention thereby drives investments, accelerating the development and adoption of IoT technology and its applications. – Bill McBeath, Chief Research Officer, ChainLink Research

Hype Peaks for the Internet of Things – But It's Here to Stay

As described in What Is This Thing Called the 'Internet of Things?', a ChainLink report, the recent surge in IoT is largely a marketing phenomenon, whereas IoT as technology and application phenomena have been steadily evolving and maturing over decades. We might be near the peak of the marketing hype cycle, but IoT, like the internet itself, is going to be with us for a long, long time after the hype is gone. There were many notable milestones and happenings for IoT in 2014.

In autonomous vehicles, Google’s self-driving cars passed the 800,000-mile mark. Rio Tinto’s driverless trucks have logged almost 3 million miles and hauled nearly 250 million tons of ore. SpaceX built an autonomous ship as a landing pad for their reusable rockets.

Indeed, 2014 saw a virtual explosion of IoT-themed trade shows and conferences, another sign that the hype cycle is in full bloom. A site dedicated to IoT-related shows lists more than 30 IoT conferences, and there are scores more.

There were lots of acquisitions at robust prices such as: PTC acquired ThingWorx for $112m and Axeda for $170m, Google acquired Nest for $3.2bn, Zebra acquired Motorola Solutions for $3.4bn, Samsung acquired SmartThings for $200m, IBM and AT&T announced an alliance to develop IoT platforms and solutions, Vista Equity acquired telematics provider Omnitracs for $800m cash, Renova Group bought Octo Telematics for €405m, and Huawei acquired Neul.

We see continued strong growth in RFID in retail and other sectors. UHF tag volumes will reach 5 billion or more in 2015. The sheer scale of adoption of RFID propels a virtuous cycle where tag prices are being driven ever lower, in some cases below a nickel each, and more and more applications become cost-justifiable, driving volumes even higher and costs even lower.

Last year saw a quantum jump in the level of interest and investment from large corporations. Examples include:

• Industrial Manufacturers—such as GE, Caterpillar, TRANE, Joy Global, and hundreds of other G2000 manufacturers building IoT into many of their products.

• Telecommunications Service Providers—Verizon, AT&T, Vodafone, Deutsche Telekom, T-Mobile, Sprint, Telefónica and others all investing heavily in IoT-related services and partnerships.

• Networking Equipment Manufacturers—Cisco is the big gorilla investing heavily in IoT, but Huawei, Juniper Networks, Alcatel-Lucent and others are jumping on the bandwagon.

Technology Firms—All manner of firms such as IBM, Google, Microsoft, Intel, Google, HP, and Dell have IoT products and services.

The presence of these giants is a major force providing the marketing muscle behind IoT, propelling awareness and adoption.

The Outlook

Hype peaks in 2015, but IoT is here to stay. New solutions and services flood the market in 2015; significant market consolidation happens later, in 2016 and beyond. Standards for IoT interoperability and semantics start to become important this year. Even more IoT-themed conferences pop up, but in 2016 many start to fail. The easiest prediction: IoT continues to grow for decades, eventually being a part of almost all products, services and human activities.

As described in What Is This Thing Called the 'Internet of Things?', a ChainLink report, the recent surge in IoT is largely a marketing phenomenon, whereas IoT as technology and application phenomena have been steadily evolving and maturing over decades. We might be near the peak of the marketing hype cycle, but IoT, like the internet itself, is going to be with us for a long, long time after the hype is gone. There were many notable milestones and happenings for IoT in 2014.

In autonomous vehicles, Google’s self-driving cars passed the 800,000-mile mark. Rio Tinto’s driverless trucks have logged almost 3 million miles and hauled nearly 250 million tons of ore. SpaceX built an autonomous ship as a landing pad for their reusable rockets.

Indeed, 2014 saw a virtual explosion of IoT-themed trade shows and conferences, another sign that the hype cycle is in full bloom. A site dedicated to IoT-related shows lists more than 30 IoT conferences, and there are scores more.

There were lots of acquisitions at robust prices such as: PTC acquired ThingWorx for $112m and Axeda for $170m, Google acquired Nest for $3.2bn, Zebra acquired Motorola Solutions for $3.4bn, Samsung acquired SmartThings for $200m, IBM and AT&T announced an alliance to develop IoT platforms and solutions, Vista Equity acquired telematics provider Omnitracs for $800m cash, Renova Group bought Octo Telematics for €405m, and Huawei acquired Neul.

We see continued strong growth in RFID in retail and other sectors. UHF tag volumes will reach 5 billion or more in 2015. The sheer scale of adoption of RFID propels a virtuous cycle where tag prices are being driven ever lower, in some cases below a nickel each, and more and more applications become cost-justifiable, driving volumes even higher and costs even lower.

Last year saw a quantum jump in the level of interest and investment from large corporations. Examples include:

• Industrial Manufacturers—such as GE, Caterpillar, TRANE, Joy Global, and hundreds of other G2000 manufacturers building IoT into many of their products.

• Telecommunications Service Providers—Verizon, AT&T, Vodafone, Deutsche Telekom, T-Mobile, Sprint, Telefónica and others all investing heavily in IoT-related services and partnerships.

• Networking Equipment Manufacturers—Cisco is the big gorilla investing heavily in IoT, but Huawei, Juniper Networks, Alcatel-Lucent and others are jumping on the bandwagon.

Technology Firms—All manner of firms such as IBM, Google, Microsoft, Intel, Google, HP, and Dell have IoT products and services.

The presence of these giants is a major force providing the marketing muscle behind IoT, propelling awareness and adoption.

The Outlook

Hype peaks in 2015, but IoT is here to stay. New solutions and services flood the market in 2015; significant market consolidation happens later, in 2016 and beyond. Standards for IoT interoperability and semantics start to become important this year. Even more IoT-themed conferences pop up, but in 2016 many start to fail. The easiest prediction: IoT continues to grow for decades, eventually being a part of almost all products, services and human activities.

Hype Peaks for the Internet of Things – But It's Here to Stay