Business Opportunity? Somebody says “Internet of Things” – Part 1

By, Krunal Barabde

An Entrepreneur is generally an agent who introduces innovation in the system in the form of a product or a service, in order to create value for its target audience and for the company itself. Therefore, these agents deliberately try to keep track of “The Next Big Thing” to gain the early movers advantage.

Today, when we browse through any information database (newspapers or news feeds or entrepreneur forums) we hear the buzz  – “Internet of Things”( IoT).  IoT has exploded the galaxy of imagination, where every other object surrounded by us is communicating with every other thing in the ecosystem, just like of the sci-fi Hollywood movies, where you can see your car telling you the possible threat and directing your GPS to the bad guy’s location, without asking you.

Just like sports, we are going to view this phenomenon/notion with a bird eye or rather see a holistic view.

In today’s world, many things, such as phones, cars, laptops, TV, thermostats, appliances etc, surround us. Some of these, things currently operate on automation (an assembly of sensors and control units). Generally, the data collected in automation process is communicated from machine to man (For example- Car Electronic Control Units communicate the issues related to driver and mechanic). However, with IoT, this communication can occur between two machines (things), termed as M2M communication.

M2M is one form of communication under the IoT umbrella, including other existing forms such as, RFID, Wireless Sensor Network (WSN), Human Machine Interface (HMI), Supervisory Control and Data Acquisition (SCADA).

Limit tends to infinity for IoT applications; however, as per Mckinsey report it can be classified in following manner.

Information and Analysis

Automation and Control

Tracking Behavior  Enhanced Situational Awareness  Sensor Driven decision analytics Process Optimization Optimized Resource Consumption Complex Autonomous System
Monitoring the performance of persons, things or data through  space and timeExample:Presence-based advertising and payments based on locations of consumers Achieving real-time awareness of physical environmentExample:Simpler detection using direction of sound to locate shoorters Assisting human decision making through deep analysis and data visualizationExample:Oil field site planning with 3D visualization and simulation


Automated control of closed systemsExample:Maximization of throughput through wireless sensors Control of consumption to optimize resource use of across the networkExamples:Smart meters and energy grids Automated control in the open environment with great uncertaintyExamples:Driverless cars


International Data Corporation forecasts the worldwide solutions for IoT Solutions will grow to $7.1 trillion with economic value of $1.7 trillion by 2020. Approx 26 billion devices will be connected using IoT platform.

We will scroll through the Value chain of the connectivity system, and deduce the possible strategic and business implications of IoT on each layer.


Backbone Providers:



At the base of the pyramid are the backhaul network providers (Backhaul-Roads carrying data), such as Fiber, Copper Cable (T1, T3, OC3), Wireless Backbone, GPS, Sensors, Actuators, etc.

In the industry, network backbone is classified as:

Independent fiber network companies (Dark Fiber Companies-Fiber Network available for lease). Companies: Google, Zayo Group, FiberLight, LightTower, Integra etc.

Service Providers with their own cable and fiber network.                                                                                                 Companies:  At&t, Verizon, Comcast, British Telecom Services, Cox Business, Sprint Nextel, Windstream.

Wireless backbone services (Backhaul) which provide data connectivity wirelessly in geographically isolated areas.                                                                                                                                                Companies: At&t, Verizon, Century link, Windstream, Frontier, Fairpoint are at forefront.

Network of sensors, actuators, GPS deployed in infrastructure and devices at important points to provide connectivity and generate crucial data to analyze.                                                                                                                                                       Companies: Small players guide this market across the globe.

As Internet of Things consolidates, demand for high-speed connectivity to billions of devices is going to be imperative; any latency can defy the purpose and value preposition to the users.

Similarly, network of sensors and actuator, especially Nanosensors is going to be revolutionary base for Implementation of Internet of Things, for example a simple polo t-shirt might contain a health-monitoring nanosensor, which is communicating with your insurance company, and medical data center through your cell phone[i]

Network Providers & Managers:

These are the midfielders of the Soccer Game (Real Football); they are consistently dodging all odds on the back of innovation to create a passage (Platform) for the concept of IoT. Companies in this segment have done huge R&D investments and merger and acquisitions to consolidate to position strategically for future

Different types of players serve this layer:

–          Middleware– As the name suggests it has to do with some kind of mediation; middleware integrates/mediates between two/more different software platforms. Each device (System) has different language of communication middleware will facilitate the communication by language (protocol) translation. Companies such as ProSyst, IBM, Oracle, HP etc. have dived in this pool.

–          Cloud Infrastructure- Billions of connected devices will generate continuous data. This data will be warehoused and analyzed in the cloud (server infrastructure), to observe trends and behavior pattern of users and make the device and network more intelligent than before. For example, data collected from smart meter is analyzed to understand your power consumption pattern/behavior and  optimize the service reducing cost to the user.

–          Network Infrastructure OEM’s– Any type of Network (LAN, WAN, Cellular) requires infrastructure and Equipments to establish trade. Equipments such as Base Stations, Antennas, Routers, Switches, Gateways, Towers etc and billing and operation infrastructure for service providers.

Most of these companies have invested in the 5G innovation, development of Multi-Layer Architecture (A set of protocol for M2M Communication-Cisco IOx platform).

–          Network Management & Consultancy– IoT even though, an old concept has unknown and ambigious level of application across the sector. Some of the companies provide consulting services to forecast network requirements define solution and processes and access Customer experience.

Companies in this segment are cutting lanes to gain the strategic position for the future developments. For example, Ericsson collaboration with IBM to develop 5G antennas and acquisition of Smart Meter companies like Ambient Corporation.

List of companies in this layer are, Cisco, Ericsson, Huawei, ZTE, IBM, Microsoft, HP, Alcatel Lucent, Nokia etc.

Service Providers:

Service providers are enhancers of services by managing customer experience.

Service Providers are the face of the Internet of Things experience. They are spectrum or bandwidth owners and deliver last mile connectivity to the user. These companies are creating a platform to provide umbrella coverage(Bundling of Services) to the users.

For example, Verizon has FiOS and Cellular Network. FiOS delivers TV, Internet, and Telephone and Cellular Network provides mobile communication and connected car services.

Most of the Service providers are collaborating across the industries to deliver customized experience to the users, for example, alliance between GE (Software) with Verizon, Intel, and Cisco to cater Industrial requirements of connectivity.

AT&T with IBM is creating a new set of cloud-based services so the companies that are developing mobile phone apps can call those functions in the cloud for geolocation and voice-recognition

Companies in this segment are Comcast, At&t, Verizon, Time Warner Cable, Sprint, T-Mobile etc.

Device Manufacturer:

Electronic Device Manufactures such as Apple, Samsung, Google, Lenovo, Intel etc. make the end user devices, which enable the access of the network connectivity. These devices are gateway for the information gathering and generation.

Device manufacturers engage the customers with the usage of internet of things, by providing convenience and customized experience. For example, health monitoring app on iPhone monitors your daily activity creates logs and communicates with your refrigerator to alert you when you are consuming unhealthy foods.

We will see the various challenges faced by IoT, the future of I0T in the next part of this article. So readers, please stay tuned for Part -2 .



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