The new report digs into five macro trends: data monetization, consumer expectations, the regulatory landscape, network connectivity/IoT platforms and security.

Lorna Garey

April 5, 2016

5 Min Read
Verizon IoT Report: Revenue Growth No. 1 Driver

Lorna GareyA new report released Tuesday by Verizon paints a compelling case for the carriers’ channel partners to jump into IoT: a projected 25.6 billion connected devices in 2019, up from 9.7 billion in 2014 and on track for 30 billion in 2020; dramatic underutilization of IoT data; and VC investments in enterprise-focused IoT startups outpacing consumer buy-ins to the tune of 75 percent.

The State of the Market: Internet of Things 2016 report combines Verizon usage data, including new IoT connections, with Oxford Economics research commissioned by Verizon, interviews with customers working on IoT projects in the private and public sectors, case studies, and insights from Verizon subject matter experts and third-party research firms.

Verizon's Mary Beth HallIt’s not surprising that Verizon and other connectivity providers are working to sell their partner communities on IoT: The company estimated 2015 revenue from IoT and telematics offerings at more than $495 million and has invested heavily in its ThingSpace IoT platform and a range of open APIs exposing everything from maps to security. But none of that matters without wired or, increasingly, wireless links.

“Connectivity is our foot in the door,” said Mary Beth Hall, director, connected solutions, M2M product marketing for Verizon, in a briefing. “We’re going to grow from there.”

Hall cited a range of real-world use cases, including property management software maker working with a luxury high-rise to notify tenants when there’s open equipment in the onsite gym or laundry area. The app was built on the ThingSpace platform using APIs and sensors placed on washers and dryers and treadmills.{ad}

“We are really simplifying the ability to create IoT applications for our partners and customers,” said Hall, adding that there are now 5,000 developers and 2,000 partners in the ecosystem. On the horizon are a ThingSpace Market, where coders and Verizon can sell IoT solutions, and a ThingSpace Portal for over-the-air software releases to IoT devices where manual upgrades aren’t practical.

“The ability to manage your devices once you’re a customer, with reports and alerts, will also be in this platform,” said Hall. “We’re going to launch that by the second quarter.”

“Verizon’s expansion into IoT positions it to sustain long-term wireless revenue growth in a saturating smartphone market,” noted TBR research analyst Steve Vachon. “Verizon is developing solutions for industries with high demand for IoT connectivity including energy and transportation.”

Data, Standards, Security

One missing piece in many current IoT deployments is analytics.  

The report estimates that only 8 percent of businesses currently use more than 25 percent of their IoT data, and that usage rate will top out at 48 percent of data being analyzed over the next two to three years. Best-case, more than half of collected data is …


… sitting idle, consuming storage resources. Worst case, it becomes a goldmine for attackers.

Hall says Verizon plans to address analytics in ThingSpace, but not in a prescriptive way. Rather, the platform will allow for customization so partners can work with customers to decide how to tease out business insights.

“They’re getting so much data, but it’s not meaningful,” she said. “They don’t know what to do with it. By giving them the tools, we can make it not only meaningful but unique and customized.”

As for hardware standards, Hall says Verizon has no plans to join the Industrial Internet Consortium but is active in the GSMA’s Embedded SIM Specification, which seeks to provide a standard mechanism for remote provisioning and management of M2M connections.

“As an organization, we’ll influence where it makes sense,” she says. “Our mantra has been that we want to provide customers with a lot of opportunity and a lot of choices. We never want to be geared toward one solution or one way of doing things.”

She likens the strategy to offering iPhones and a variety of Android devices on the Verizon network; by being hardware-agnostic for SIM cards, modules and sensors, partners can choose what works best for customers.

While Hall sees software advances outpacing hardware innovation, she says chipsets and modules are becoming steadily smaller and less expensive.

“OEMs are getting better at IoT,” she said, adding that Verizon is building out its IoT core network and focusing on 5G with an eye to minimizing touch points. “That reduces device cost and size because OEMs won’t need as many radios,” she said. Fewer radios should also increase battery life and durability.

While security is often cited as holding back the IoT, Hall says most Verizon customers use private networks.

“We also have IoT credentialing,” she says. “That’s a kernel that sits on the device and adds additional authentication.”

Open to All

IoT platforms like ThingSpace, as well as Cisco Jasper, Google Brillo, IBM Bluemix and Microsoft Azure IoT Suite, are designed to cater to developers. For example, with just two mouse clicks, any of the 5,000 developers working within ThingSpace can access the platform’s library of APIs as well as advanced data analytics tools. However, Hall says the goal is a single portal where OEMs and partners can also be part of an IoT community, sharing code and ideas.

“We think it’s the way IoT is going,” said Hall, adding that feedback from Verizon partners on ThingSpace has been positive so far. “They like that it’s open and they can go try it before they buy it.” 

Follow editor-in-chief @LornaGarey on Twitter.

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