2023 represented a tipping point for IoT when the sector stepped out from under the shadows of over-ambitious market size predictions and started to deliver on the promise of an IoT-enabled world. There’s still a long way to go but mass-scale deployments are routinely happening and tens of billions of IoT connections are being added each year. This is being enabled by the confluence of available technology, wider choice of connectivity, especially in the cellular market, and more maturity in IoT security, certification, compliance and business models.
Mass-scale IoT has also benefitted from the flywheel effect of successful deployments fostering greater confidence in the landscape and, in turn, supporting further investment. On the flipside, the larger the deployments, the greater the investment required so work continues to optimise efficiency and reinforce the mass IoT business case. Overall though, IoT is more proven, more secure, more robust and more flexible than ever before and awareness of this is enabling organisations to commit to large-scale projects with confidence.
Although once bitten and twice shy, predictions relating to market size are returning. Analyst firm IoT Analytics has predicted the global number of IoT connections will double from 2022-2027. The firm reports that global IoT connections increased by 18% to 14.3 billion active endpoints in 2022, while for 2023, the firm predicted a further 16% growth to 16 billion active endpoints. At the end of its current prediction horizon, it estimates there will be more than 29 billion active IoT endpoints.
As always, such numbers should be taken with caution and definitions are important. Others have projected the size of the cellular IoT market alone. Omdia, for example, predicts there will be 5.4 billion cellular IoT connections by 2030. The firm sees 5G-related technologies such as 5G Red Cap and 5G Massive IoT driving much of this growth.
It is, however, clear that wider choice of technology is arriving in the cellular space. Red Cap is set to democratise access to 5G-like latency in a lower cost format, while LTE Cat 1 bis adds greater capability to LTE Cat 1, extending the applicability of LTE and opening up a range of IoT applications for the technology. The advanced cellular technologies available now widen choice and mean that organisations can select connectivity that provides a better fit than ever before for their use case.
This is an important driver for mass-market IoT because it means there is less wastage and organisations can readily make the trade-offs between cost, performance, security and power consumption for various cellular connectivity and select the option that matches their deployment best. This removes complexity from the IoT design and development phase and provides greater visibility into the whole-life costs of a deployment. This clarity aids financing and increases confidence of what return on investment looks like.
At the same time provisioning of connectivity has become radically simplified with the introduction of embedded and integrated SIM (eSIM and iSIM). These technologies allow the SIM to be embedded or integrated into the device at the point of manufacture with the connection initiated automatically at the point of deployment. This removes the need for a plastic SIM, the cost of a SIM tray and the management complexities of installing local operator SIMs at the point of deployment. This streamlining of the SIM process removes a further significant barrier to mass scale IoT.
With connectivity options at last becoming clearer and simple propositions now widely offered, organisations are now focusing on other critical capabilities. Security is an obvious concern because the more connected devices that make up a deployment, the greater the threat surface and the larger the risk. Security by design is embedding secure functions within devices before deployment and providing better security than retrofitted solutions, which are often too expensive or impractical for many IoT use cases to bear.
Security is significant not only for the obvious need to prevent hacks and frauds but also to assure connected device identity and inextricably link the data from the device that collected it and transmitted it. Confidence in IoT data that can be trusted is an essential part of the IoT value proposition and this is now well understood with effective solutions in place.
With connectivity simplified and security being continuously addressed, scalability challenges still exist. IoT organisations need to be able to access economies of scale in order to justify business cases and this means they need to accelerate and simplify certification, which is needed in national, regional and vertical markets in order for devices to be deployed. Certification and regulatory compliance still presents a significant bottleneck but organisations are increasingly relying on vendors to draw on their experience and smooth out the process.
There’s a growing awareness that much of this can be replicated from one device to another and it’s not necessary for every business that is engaging in IoT to become certification experts.
Similarly, organisations recognise they don’t need to be device makers and are outsourcing their IoT device manufacturing to partners. This helps them to get to market fast and handle the scale of massive IoT.
This demonstrates a new willingness to collaborate within IoT. Where once organisations would focus on attempting to do everything themselves, they now realise that this is too slow, too expensive and too complicated. Instead, there is greater appetite to partner with experts from device design to deployment and beyond. By tapping into providers of IoT as-a-service, organisations can access optimised solutions for device development and certification, manufacturing, connectivity, roll-out and support and security. There is also greater willingness to share the risk and reward.
Turning to partners that can cope with mass IoT scale and bring in-depth understanding of IoT intricacies such as power consumption, cellular network variants or security, can radically accelerate time-to-market, result in significantly improved performance and deliver transformed business value. The bigger the volumes, the greater the risk but also the richer the reward is now the attitude that IoT innovators stepping into the hyperscale era of mass IoT are taking. It’s an exciting landscape and the participants will get to success faster by travelling together.
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