Intense competition is driving a whole new wave of innovation across the IoE, and opening doors to competitive broadsides by new players.
The search is on for the next killer applications that will turn connected devices into the next smart phone or PC.
Billions of dollars are being poured into startups and established companies, creating a spectrum of new ideas they’re trying to bring to market. Whether those investments pay off with a single application, or whether they lead to new ideas that fuse together multiple markets, remains to be seen. But at least for the moment, it’s clear that money is no object.
So far, there is no indication that anything will drive sales of 1 billion or more units a year. In fact, in this early phase of the IoE’s rollout, investments are falling into a couple of very different camps—very high-value gambles, such as smart cities and infrastructure, better approaches to managing big data and connected cars, and a whole bunch of less-expensive edge devices ranging from smart appliances to wearables. There also are a bunch of one-offs and approaches for limited markets in the industrial world, where the biggest payoff might come from something like a smart valve or meter.
Lumping these all together under the IoE umbrella is a bit of wishful thinking, because it will be years before some of these devices are connected even within their own vertical markets. But standard connectivity still opens new doors, new markets, and adds new risks that never existed before. The security issues are well documented even if they haven’t been fully addressed. What’s far less obvious, though, is the risk of being broadsided by competitors that didn’t exist six months ago using new business models no one ever considered before.
When Apple introduced the iPod in 2001, it wasn’t the slick design of its MP3 player that won the day. It was the ability to download individual songs from iTunes for $0.99 each. The Internet made the micropayments model possible, and it made Apple—which had been limping along since the introduction of Microsoft Windows and the commoditization of the PC—into the top technology company on the planet. It also reduced a lot of Apple’s one-time competitors to rubble.
Google’s meteoric rise took a similar path. By offering greater reach for advertisers, it walked off with most of the ad revenues from from classified ads that were the real profit centers of most newspapers and magazines. But as with Apple, it was one market and the competition was clearly identifiable.
The IoE is a whole different animal. It has the ability to do wreak the same kind of upsets in multiple markets at once, chipping business away from companies in diverse but connected verticals and combining them in new ways. And more likely than not, the companies that lose market share to these newcomers won’t have any idea there’s a threat because they’re not involved in the same markets.
Being successful in the IoE world isn’t about being an expert in one slice of a market. It’s about developing expertise as to how the pieces of different markets can be put together in interesting and ever-changing ways. And while that makes for some very interesting and dynamic business models, and more than likely a level of perpetual anxiety and chaos, it also makes it harder to predict where and when the next threat will appear.
With the IoE, competition will be able to cross market boundaries, not just geographic boundaries. That creates a whole new way of looking at business, and adds a dark underside to the definition of what constitutes a killer app.