"We are seeing adoption of IoT begin," said Mark Bartolomeo, vice president of IoT at Verizon, in an interview. "There are now use cases for IoT and less of an industry focus on the technology. The biggest macro trend lately is how IT can use the data [from IoT] more effectively to run a better business for customers."
The carrier launched its ThingSpace development platform last October for companies to create and manage IoT applications more efficiently. In February, Verizon announced it had more than 4,000 developers using ThingSpace, and would open the software to third-party network and tech providers.
Both Verizon and AT&T, the two biggest U.S. carriers, have been aggressively pushing their IoT prowess as a source of new revenue. Both companies saw 5% declines in wireless service revenues in the fourth quarter of 2015 and see IoT and machine-to-machine technologies as "a big growth engine," TBR analyst Chris Antlitz said recently.
Both AT&T and Verizon are a natural fit to sell the benefits of IoT, since they run enormous wired and wireless networks and have global reach. Analyst firm IDC puts such networks at the center of the growing IoT ecosystem using this network-centric definition: "IoT is a network of networks of uniquely identifiable end points (or things) that communicate without human interaction using IP connectivity — be it locally or globally."
In turn, network service providers rely heavily on large companies such as IBM, Microsoft, Cisco, Intel, Ericsson and GE to power the entire networking and IoT ecosystem, from hardware, like routers and servers, to software and cloud services. Additionally, hundreds of companies sell components and modules, including sensors for products as varied as smartwatches and driverless cars, demonstrating how vast the IoT system is becoming.
IDC projects the financial value of IoT products will soar from $655 billion in 2014 to $1.7 trillion in 2020. IDC analyst Vernon Turner has tracked what he calls a "tidal shift" in just the last year from planning to execution of IoT projects.
Verizon focused on a number of IoT projects in a "State of the Market" report released Wednesday in conjunction with its developer conference where it declared, "companies of all industries now have IoT squarely on their radar." The report cited IDC's projection that there were 9.7 billion devices in the IoT ecosystem in 2014, and that the number will jump to 30 billion in 2020.
While such growth is widely forecast, Verizon also sponsored a survey by Oxford Economics that found that only a small number of businesses are taking advantage of the data produced by connected devices. The survey of 500 senior level executives in 14 countries, including the U.S, found that just 8% of businesses are using 25% of their IoT data. That 8% is expected to rise to 50% in less than three years.
The survey also supports a premise that Gartner and other analyst firms have espoused that companies are increasingly using IoT data to gain insights into markets and to create and sell new services. In the past, the focus of IoT was primarily on collecting and using data for improving the operational efficiency of a corporation itself.
In addition to recognizing the ability to create new services, other factors are expected to push IoT growth, including new government regulations. Verizon's Bartolomeo noted that the federal Drug Supply Chain Security Act will require drug makers, starting in late 2017, to electronically transfer prescription drug shipment information across the U.S. drug supply chain.
For smart cities, federal dollars will be used on highway improvements that will provide smart traffic signals and other technologies designed to reduce traffic congestion, Bartelomeo said.
In agriculture, Verizon unveiled a case study with Ward Aquafarms in Falmouth, Mass., on Cape Cod, to monitor the safety of oyster harvests. Verizon's ThingSpace is used by Ward along with thermal radiometry sensor-enabled cameras made by Mobotix AG that can measure sub-tidal water temperatures, chlorophyll content and other information that can be combined with satellite imagery. All this data is combined to monitor the safety of the oyster harvest and predict oyster growth, Verizon said.