Table of Contents

The Future of Connectivity- Internet of Things (IoT) —the network of connected “smart” devices that communicate seamlessly over the Internet—is transforming how we live and work. At farms, wireless IoT sensors can transmit information about soil moisture and nutrients to agricultural experts across the country. IoT alarm systems, equipped with batteries that last for years, provide homeowners with long-term protection. Wearable fitness devices—for both people and pets—can monitor activity levels and provide feedback on heart rate and respiration. Although these applications serve different purposes, they all share one characteristic: dependence on strong connectivity.

Enabling the Internet of Things

Internet of Things – The stakeholders seeking connectivity solutions include radio and chipset makers, platform vendors, device manufacturers, and companies in various industries that purchase IoT-enabled products, either for their own use or for sale to the public. These companies can now choose from more than 30 different connectivity options with different bandwidth, range, cost, reliability, and network-management features. This wide variety, combined with constantly evolving technology requirements, creates a quandary. If stakeholders bet on one connectivity option and another becomes dominant, their IoT devices, applications, and solutions could quickly become obsolete. If they hesitate to see how the connectivity landscape evolves, they could fall behind more aggressive competitors.

Cellular 5G networks—now being refined—might eventually become a universal solution for IoT connectivity. Although some global telecommunications networks and industrial applications now use 5G, this technology will not be widely available for at least five years because of high development and deployment costs. With annual economic benefits related to the Internet of Things expected to reach $3.9 trillion to $11.1 trillion by 2025, companies cannot afford to defer their IoT investment until 5G arrives. To help business leaders identify the connectivity solutions that best meet their current needs, we analyzed 13 sectors, including automotive, manufacturing, construction, and consumer, where IoT applications are common.1 In each sector, we focused on connectivity requirements for likely use cases—in other words, the tasks or activities that may be most amenable to IoT solutions. We then identified the most relevant connectivity solutions for each one. In addition, we examined business factors that may influence how the connectivity landscape evolves, as well as the elements of a strong connectivity strategy. LPWA technology has different advantages and implementation requirements. For instance, Sigfox manages its own networks, while LoRa is supported by more than 400 partners. NB-IoT relies on existing cellular infrastructure for the small pilots in which it is being tested. This will also be the case when NB-IoT becomes more widely available and is applied in larger-scale programs. Since the LPWA market is still in its early stages, it is difficult to predict which LPWA solution will emerge as the winner. Current 4G LTE technology offers high bandwidth of up to 100 megabytes per second and a large range of more than ten kilometres. Reliability and availability are also good. On the downside, 4G LTE technology is associated with high costs—several dollars or more for a module compared to less than a dollar for Wi-Fi. Cellular connectivity also has high power-consumption requirements, making it less than ideal for IoT applications, where battery life should extend over multiple years.

Extraterrestrial connectivity

This connectivity option includes satellite and other microwave technologies. IoT stakeholders generally use it only when cellular and fibre options are not feasible since it has the highest costs. For instance, organizations within national defence may use satellite connectivity for unmanned drones. Extraterrestrial options have low-to-medium bandwidth, high range, and medium-to-high reliability and availability. Only a few industries rely on extraterrestrial connectivity for IoT apps. Satellite and other extraterrestrial communication solutions will continue to play a niche role, providing connectivity only in situations where cellular or fibre technologies are not feasible.

Business factors will help determine which connectivity solutions gain the most traction.

Our analysis suggests that technological advances will not be the only force that determines which connectivity solutions become dominant. In fact, the following business factors—including those over which IoT stakeholders have little control—may play an equally important role.

Changing business models of industrial-device manufacturers

Most device manufacturers that create industrial IoT solutions originally followed a pay-per-unit business model in which they charged a single fee for each device sold and made most of their income from long-term maintenance contracts. This model inadvertently created a conflict of interest between customers, who wanted their devices to work uninterrupted, and manufacturers, who profited from servicing faulty devices. But this conflict may soon cease. Manufacturers are now transitioning to a device-as-a-service (DaaS) model in which they sell customers a subscription to their products. The subscription covers both the initial device purchase and later maintenance costs, which allows manufacturers to make money even if the products do not require service. In fact, they have the incentive to keep their devices running since service costs could reduce their revenues. To facilitate the DaaS model, manufacturers want connectivity solutions that allow them to connect, monitor, and perform updates remotely. LPWA solutions best meet their needs since unlicensed technologies such as Wi-Fi do not work well in “noisy” environments with a lot of electrical and environmental interference, including those in manufacturing plants.

What’s new with the Internet of Things?

Even connectivity technologies in the same category can have different associated costs, and this may determine what solution a company chooses. Consider the various LPWA options. While companies must build communication towers and purchase modules to deploy Sigfox connectivity, NB-IoT requires only a module purchase since it can use existing cellular infrastructure.

Supporting ecosystems

Some IoT connection options are easier to install because a solid ecosystem supports them. For example, LoRa is an appealing LPWA choice since the LoRA Alliance currently has hundreds of members and is growing.

The elements of a strong near-term connectivity strategy

As companies design their IoT strategy, they must be open to change, adapting their game plan to suit new connectivity standards and customer preferences for simplicity. Likewise, they should be prepared to investigate new business models since advances in IoT connectivity may open some surprising opportunities.

Focusing on simplicity

We have talented engineers and leading-edge technology companies to thank for the wealth of connectivity technologies now available or in development. The most sophisticated and complex solutions reflect well on the technological prowess of their creators, and they may be best suited for many products. Within IoT, however, companies must focus on use cases rather than technological sophistication when selecting connectivity solutions. That means they should be satisfied with connectivity solutions that satisfy the basic requirements for device functionality, even if more advanced options are available, if they can procure them at a lower cost.

IoT is complex by nature, with devices and apps requiring the cooperation of multiple vendors. Likewise, providing end-to-end IoT connectivity can be complicated because it requires multiple vendors, and companies may find that they need different solutions for their potential use cases. Winning companies will try to sort through the confusion and establish connectivity solutions now, even though uncertainty abounds, so they can emerge as leaders in IoT.

No comment

Leave a Reply

Your email address will not be published. Required fields are marked *