2020 was a year of reckoning for the IoT

The biggest IoT story of 2020 was how much the internet of things struggled. From VentureBeat’s deep-dive into Sigfox’s challenges to the Wall Street Journal’s story on Cisco’s decision to end its smart city product, it felt like the media was writing from the bottom of Gartner’s trough of disillusionment.

As an example, several stories cited Gartner’s IoT prediction from 2015 that there would be 25 billion IoT devices by 2020. The actual number of connected devices? About 5.8 billion. So has the IoT hit a wall? I don’t think so. Instead, what we’re seeing is the result of numerous impediments to the widescale adoption of an essential technology. It’s not that IoT has hit a wall; rather, tech companies responsible for developing and selling the technology have been tapping the brakes as they find ways to create closed tracks where their products can run in isolation, ensuring vendor control and profits.

The internet of things isn’t a market; it’s an enabling infrastructure that companies, cities, and individuals need to put in place in order to take advantage of the insights generated by all the data those connected “things” provide. It’s like how we needed more PCs, both at work and in the home, before the internet became appealing. And how beyond those PCs we needed applications that made people want to sign up for broadband and buy those computers in the first place.

Luckily we had email, and then browsers. The beauty of the original broadband and PC revolution was that established protocols made it possible to send emails to anyone, even people who used different email applications or different computers. That meant people could invest in hardware and a network without worrying about getting locked into only using certain software on certain machines. After all, it would have been nearly impossible to convince someone to spend $40 a month (in 1996) for dial-up and between $5,000 and $6,000 in today’s dollars to buy a computer if they were also worried that they might pick a machine that couldn’t access the world wide web or display emails from their friends.

Of course, making a simple video call or IMing someone now requires a conversation about logistics that could drive any reasonable person insane. And I mean that literally. Figuring out on which platform to use to connect with my family for Christmas involved an exchange of text messages in which I had to note that not everyone has FaceTime, then tracking down the one family member with a Zoom account after it was explained to me that no one has Skype on their machines in 2020 — all before we could even settle on a call time.

The point isn’t to bemoan the web’s current walled gardens (OK that might be part of it), but to demonstrate that neither computers nor the web started out fragmented, with high costs of entry and walled gardens. The internet of things, on the other hand, has gone down the same path as videoconferencing in 2020 — only it’s even more complicated.

There are numerous types of data-gathering devices, multiple networks, and thousands of use cases, and everyone expects returns on them RIGHT NOW. The internet of things is a platform. It’s basic infrastructure. When we get it right we’ll know because we won’t be writing about it as some actual thing. Like broadband, like the mobile web, and even like roads, we’ll take it for granted and build the software and services that provide the real value on top of the sensors, networks, and underlying protocols.

What’s stopped us from getting it right so far is greed, namely resistance to investment in infrastructure that creates benefits for what might be low margins. Moreover, I think businesses and consumers are still struggling to understand what the IoT is for, exactly.

Businesses that can articulate the benefits (such as of those so-called killer apps) will find success. On the consumer side, Amazon’s investment in Alexa is one example of how adding connectivity to a simple product (a speaker) has opened up voice recognition, home control, and more. Peloton is another example of a company that saw connectivity fundamentally change the way it could approach the stationary bike as a product. Meanwhile, in the enterprise, Schneider Electric is doing a good job of applying connectivity to its customers’ operations (and its own) in order to deliver value that goes beyond predictive maintenance, helping businesses save on energy costs and reduce their carbon impact.

As we move forward into 2021, and hopefully out of the trough of disillusionment, we’ll see more companies provide a compelling reason to embrace smart products and services. And we’ll see standards and networks arrive that let companies and consumers invest in those products without fear of lock-in.

For another perspective on this topic, I recommend you read Alicia Asín’s essay on the current state of IoT. Asín is the CEO and co-founder of Libelium, a Spanish company that has been building the IoT for more than a decade.