Hod Fleishman, Global Head of IoT, BCG Digital Ventures, discusses what 2018 will hold for IoT.

The hourglass is running out on 2017. It’s time to take out the old crystal ball, dust it off and have a look inside, asking: What will 2018 hold for IoT?

Throughout 2017, IoT has continued to make steady progress. With sustained investment in both the corporate and startup sectors, we’ve seen the landscape of products, platforms and services only becoming richer. We’ve also seen edge computing becoming a reality, opening up a world of use-cases previously out of reach. Perhaps most importantly, we’ve seen IoT strategy becoming a topic of discussion for more and more companies.

The question we’ve been hearing in various formats throughout the year:

Can we deliver more value out of electromechanical products (in industry, health, mining, automotive, etc.), or should we start leveraging IoT for building digital capabilities on top of the physical assets we sell and use?  

The answer, by now, is clear: The value electromechanical products can deliver is capped by physics. To generate more value, physical objects need to become cyber-physical, or IoT-enabled objects, and new business models that unlock the value of cyber-physical products will need to be put in place.

So, with that in mind, here’s what the crystal ball has to say about 2018.

  1. IoT will continue to suffer from schizophrenia: IoT vs. IIoT

On the one hand, IoT products are typically identified as low-cost products that focus on sensing a few data streams, do not send out a lot of data and generally use a technology stack similar to the stack of digital products. But let’s not be mistaken; simple, with few data points and low-cost does not equate to low value. There is a lot of innovation and value opportunity to be captured by deploying simple solutions at critical junctions that will help solve laser-focused problems.

On the flip side of IoT’s personality we have Industrial IoT, or IIoT. The technology landscape in IIoT is more complex than IoT, as machines tend to generate a lot of data which needs to be processed before being sent to The Cloud. Whether it be an industrial CNC machine or an autonomous car, machines work at high speeds, and it’s not possible to wait for a response from The Cloud for their continuous operation. To solve for data quantity and latency challenges on this side of the spectrum, edge computing solutions need to be deployed.

So, while IoT can cater to small data/low cost solutions, IIoT offers sophisticated solutions that deal with mountains of data that require a higher investment to implement. In 2018, we expect to see more of this dichotomy emerge. In the case of IoT, we’ll see lower cost sensors coupled with better battery technology. In the case of IIoT, we’ll continue to see more and more use-cases for edge computing.

But, will the two merge? Will the cost of edge computing come down to the point that even low-cost solutions will have high end functionality and capabilities? I’m optimistic. Technology is moving at ever-growing speeds. Before the end of 2018 the gap between IoT and Edge/IIoT will shrink significantly.

  1.  IoT will die

IoT as a standalone “thing” is dead. A few years ago, the big innovation was our capability to collect useful data with simple devices, utilizing low energy and low-cost sensors, such as with the Fitbit. But the value has shifted from simply capturing the data, to making use of the data. To this end, IoT will never be just IoT again—it will always be coupled with something else: IoT and ML; IoT and AI, IoT and blockchain technology and so on.

In one of my first startups we used accelerometers to detect driver behavior. “All” we had to do (at the time this was quite sophisticated) was to show the data we captured to fleet managers. It was their job to make sense of the data and decide what to do with it. But IoT and IIoT are capturing so much data now that, in order to convert it into insights and actions, automation must be put in place. As a result, IoT as a part of a system that automatically turns data into actions will become the generator of tremendous value, and IoT in its original form will cease to exist.

  1. IoT will become child’s play

And this is probably the best news ever. Why is it that a 12-year-old can think of an app in the morning, set up the necessary toolchain by the afternoon and upload his or her app to the App Store by evening? It’s because digital has become commoditized. And this is very good, because the barriers to innovation have come down. As a result, more people can participate, innovate and generate new growth engines. IoT isn’t there yet, but in 2018 it will continue and move in this direction. It’s already relatively easy to build IoT MVP’s using off-the-shelf evaluation boards or Arduino type products.  

With solutions like  Amazon GreenGrass, it’s becoming simpler to code edge devices. A strictly proprietary world is now being opened up to entrepreneurs and innovators. The industrial world is being revolutionized as the wall between the IT and OT worlds is coming down. It’s time for today’s children who will soon be tomorrow’s teenagers to step in and innovate using IoT.

Word of caution: the crystal ball I’m using is of an early model. It’s not connected, does not use IoT, Edge computing, ML or AI for its predictions. We will have to wait another 12 months from now to see how well it works.


To learn more about our work with IoT and edge computing, read here.