According to the report (register here to download):
"In our view, 2015 was the year IoT gained legitimacy. Businesses moved beyond 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 2020."
As we've seen, IoT services are the real money makers, enabling companies to develop new revenue streams beyond commoditized hardware solutions that are money losers at worst. The report quotes that Gartner estimates that “the Internet of Things (IoT) will support total services spending of $235 billion in 2016.”
Good news for entrepreneurs! "The race to usher in new business models and revenue streams through IoT shows no signs of slowing down in the near future. According to analysis conducted by our
venture capital (VC) arm, Verizon Ventures, we estimate that consumer IoT startups raised 15% more VC funding
than enterprise-focused startups in 2014. However, in 2015, roles seemed to have reversed with enterprise
outpacing consumer by around 75%. In 2016, we believe the enterprise will continue that trend, but by a much
larger order of magnitude—roughly 2 – 3 times more than consumer. 2016 will see enterprise IoT VC funding
considerably dominate that of consumer."
As the report confirms, based on our experience, this means new insights and potential acquisitions/partnerships with IoT innovators (starting at the IC level), and an expansion of technology incubators and accelerators. Incubators will provide small amounts of funding for equity, as well as providing lots of services. Accelerators provide guidance without financial support. We see this as a worldwide phenomenon, from Africa to America.
Here's Verizon's breakdown of the IoT market opportunity:
- 300M untility meters
- 100M street lights
- 1M vineyard acres
- 83.1M millenials in the US alone (think wearables, smart houses, robotics)
- 150M unconnected passenger cars
- 75B counterfeit drugs
More and more major companies are developing IoT platforms - "Apple has HomeKit, Verizon has ThingSpace, Google has Brillo, IBM has Watson and Cisco has Jasper. These and numerous other platforms populating the IoT marketplace promise a secure infrastructure and a set of tools that enable developers to build IoT applications, then manage the vast array of connected devices and the huge volumes of data those endpoints generate." Intel also offers an IoT platform.
Finally, the integration of security at the start of an IoT solution is welcome news.
The report, of course, outlines in detail Verizon's wireless IoT solutions and case studies. The report also includes discussions of: regulations, security, supply change, wireless communications in an IoT context, customized apps.
All in all, a terrific look at IoT's future, not just for consumers, but for the providers who badly need to increase innovation and revenue.