Enterprise IoT Hitting Its Stride, Says Verizon Report

The telecommunications provider documents the state of the Internet of Things market and finds that while enterprise applications are taking root faster than consumer-facing ones, companies still have plenty of value to wring from IoT data.
By Mary Catherine O'Connor
Apr 06, 2016

In its inaugural "State of the Market: Internet of Things" report, published in 2015, Verizon focused on the complexity of the Internet of Things, the fragmentation of the marketplace and slow adoption. Its sophomore report, which the telecommunications giant released on Tuesday, paints a somewhat different picture, says Mark Bartolomeo, the company's VP of Internet of Things and connected solutions. "Based on our own research, research from contributors and from Verizon customers," he states, "we've seen a shift away from just talking about [the IoT] and toward [deploying] use cases."

That is, with one caveat: This is happening in the enterprise world, far more than in the consumer one.

"Enterprises have started completing their investments in open platforms that allow the use of APIs [application programming interfaces] to expose data streams from different service providers," Bartolomeo says. This allows an end user to manage all data culled from disparate IoT devices and systems in a central place.

Bartolomeo says he has not seen companies in the consumer marketplace make that shift to open platforms. However, he notes, he sees some hopeful signs, such as home security provider ADT's new Canopy platform, which integrates connected lights, doorbells, cameras and other smart-home devices into a common platform.

The report indicates that enterprise applications are also seeing the lion's share of venture support, reversing a trend. Says the report: "According to analysis conducted by our venture capital arm, Verizon Ventures, we estimate that consumer IoT startups raised 15 percent more VC funding than enterprise-focused startups in 2014. However, in 2015, roles seemed to have reversed with enterprise outpacing consumer by around 75 percent. In 2016, we believe the enterprise will continue that trend, but by a much larger order of magnitude—roughly 2 to 3 times more than consumer. 2016 will see enterprise IoT VC funding considerably dominate that of consumer."

Next Wave: Analytics
For the "State of the Market" report, Verizon commissioned research firm Oxford Economics to survey early adopters of IoT technology. It found that companies are investing in IoT technology chiefly as a means of revenue growth, and that data monetization, enabled by analytics, is among the most promising paths to revenue generation. However, it also found a great deal of money sitting on the table. Only 8 percent of the businesses that Oxford Economics queried are using more than a quarter of the data they collect via IoT networks.

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