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Three Reasons Why IoT is Poised to be the Next Hundred Billion Dollar Market
Article Written by Kevin Roberts, director of platform technology at FinancialForce

IoT 

The Internet of Things, or IoT, is the latest metatrend to shake the tech industry to its core. Like its recent predecessors, "big data," "cloud," and even "open source," nobody's arguing the substance of the technology, nor its transformative potential. Instead, like its recent predecessors, it's fair to say that the hype cycle has exceeded the trend's actual application to date. Google "IoT" + "next big thing" and you'll find substantive results dating back to at least 2012, when IoT was first supposed to emerge.

While 2016 may not be the year that the IoT market tops $100 billion, the pieces are beginning to fall into place to make this a reality in the near-term. It's not hard to figure out why in today's gadget-obsessed, data-driven society, but there are several specific market forces that are combining to make this an increasing reality.

Evolution of Revenue Models

Revenue recognition, forecasting and management, and most significantly, the technologies that power them, have improved drastically in recent years. Businesses recognize the importance of building new revenue streams, especially recurring revenue. IoT is perfectly suited to enhance this model, given the data-centric, consumption-based nature of most IoT devices.

This is by no means to say that innovative revenue models are limited to IoT; companies across the board are embracing the predictive, reliable nature of recurring revenue for building out more accurate projections.

Rise of the Service Economy

The shift in revenue models is in many ways directly correlated to the rise of the service economy. Businesses across the board are evolving their offerings to shift from a product-oriented model to a more service-oriented model. The goal in most cases is to increase recurring revenues, since they're much more reliable when projecting future business performance. Businesses that used to focus on one-time sales are starting to sell ongoing services to stay competitive. This is leading more and more businesses that didn't previously think they were in the services industry to shift their thinking.

IoT ties directly into this model, as it has enabled a diverse array legacy businesses, from Apple and AT&T to General Electric and John Deere, to modernize existing products, build out new lines and, most importantly, develop new revenue streams. The consumption-based nature of IoT has also fostered a fast-growing ecosystem of newer, consumer-focused companies like Canary and Nest that have realized impressive early growth and inspired an ecosystem of similar companies.

Maturation of the "Wearables" Market

When discussing IoT, one would be remiss not to mention wearables. Once largely confined to early adopter tech enthusiasts and/or CES attendees, the wearables market has taken off in recent years as we all know. Headlined by upstart companies like Fitbit and Oculus, and of course offerings from 800-pound gorillas like Apple, Google and Samsung, Internet-enabled, "wearable" technology has undoubtedly hit the mainstream. And the wearables market is only getting bigger; according to CCS Insight, it will be a $34 billion market by 2020.

Make no mistake: this phenomenon is not limited to the consumer market. There's an even bigger, emerging market in the business world. Just as consumer health tracking has taken off, business health monitoring will surface as a way for organizations to instantly monitor their reports and dashboards on-the-go. Managers will be able to make swift, strategic decisions and immediately react when something requires attention. Workplace notifications will continue to support wearable adoption in 2016 and beyond because of their ability to cut through the noise and let employees determine when something is worth their time and attention. Whether it's a customer support issue, time-off request, logging hours at a client site or reacting to an urgent update from a sales call, all departments of an organization will find value in wearables at work.

Conclusion

The stars appear to be (finally) aligning to enable IoT's real-world application to catch up with its hype cycle. Between new revenue models, a general shift to service models and increased market traction for IoT pioneers, the time for this market seems to be "now," not "when." And if you're reading this in the future, from a wristwatch or a pair of glasses, it's safe to say that the IoT era has arrived in full!

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About the Author

Kevin Roberts is director of platform technology at FinancialForce, a leading cloud ERP provider.

Published Wednesday, March 09, 2016 6:31 AM by David Marshall
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Comments
March FinancialForce PR Picks - FinancialForce Blog - (Author's Link) - June 22, 2017 5:58 AM
March FinancialForce PR Picks - FinancialForce Blog - (Author's Link) - January 22, 2018 10:32 AM
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