Momentum keeps building for the Internet of Things (IoT) market—even if the concept is overhyped. Recent moves by market stakeholders point to significant investments and noteworthy strategies. In addition, there are important implications for the utility sector, particularly the residential segment.
Google’s strategy combines hardware and software elements for connecting things in the home. The company is expected to release Brillo, a slimmed-down version of the Android operating system designed for smart home applications, by year’s end. Brillo will be coupled with Weave, a protocol developed by Nest Labs, which is to be integrated into OnHub, a router that can control IoT devices. As part of Nest’s initiative with Weave, General Eletric (GE) and Procter & Gamble will be partners in the effort.
Comcast has made the IoT a key part of its strategy over the past year. Executives with the cable giant have said they want to become the conduit, or highway, that carries all the data back and forth among IoT devices. Also, the company’s Xfinity service is being positioned as a platform for IoT functionality, with the company having announced partnerships with Nest, August (locks), and Lutron for lighting.
Also, Intel is acquiring chipmaker Altera for nearly $17 billion with the aim of enabling new classes of products “that meet customer needs in the data center and Internet of Things (IoT) market segments,” according to a release. Altera is an attractive buy for Intel because its chips are used widely for networking and wireless applications. Similarly, United Kingdom-based Dialog Semiconductor, which supplies chips to Apple, announced in September its acquisition of Atmel for $4.6 billion in a deal to strengthen both companies’ efforts to compete in the IoT space.
Furthermore, the Smart Grid Interoperability Panel (SGIP) says it will expand its cooperation with the Industrial Internet Consortium (IIC) to focus on technologies and testing to promote the adoption of the IoT in the energy sector. The two organizations plan to identify ways members can take part in an array of new and established testing activities.
Among utilities, Commonwealth Edison (ComEd) in Illinois has a partnership with Comcast to leverage the interconnectedness of smart thermostats in a demand response program. The program, similar to other bring-your-own-thermostat (BYOT) setups, is a basic example of linking things, thermostats in this case, with as service that can increase energy efficiency.
With this kind of momentum, it seems clear the IoT trend has legs, but there are hurdles that could inhibit market adoption. First, there are many protocols in play, such as ZigBee, Z-Wave, Bluetooth, and Wi-Fi. These present interoperability issues. Second, many IoT devices are more costly than current alternatives, such as high-end smart thermostats. Third, some consumers have real concerns about potential loss of privacy or security breaches when so many devices are interconnected.
Despite these hurdles, the IoT market drivers seem strong, and important companies are placing big bets on it. Navigant Research expects global revenue attributed to residential IoT devices to grow from $7.3 billion in 2015 to $67.7 billion in 2025, based on our own focused definition on the built environment of things. For those interested in learning more about the IoT market, Navigant is hosting a webinar highlighting IoT trends on October 20 at 2:00 PM EST. My colleague Ben Freas, senior research analyst, will bring his building automation perspective, and we will be joined by Matt Smith, senior director of utility solutions at Silver Spring Networks, who will discuss the utility’s role in the connected IoT home.
Tags: Internet of Things, Residential Energy Innovations, Smart Thermostats, Utility Transformations
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