Harbor Research - Smart systems and Internet of Things forecast

Machine-to-machine (M2M) communications and the new world of Smart Systems are ushering in an era where people, machines, devices, sensors, and businesses are all connected and able to in- teract with one another. As these previously dis- aggregated parties come together, new modes of collaboration and intelligence will abound foster- ing a trend that we call “Smart Business”. M2M is merely the starting point. The development of Smart Systems and Services will enable a truly connected “Smart World”.

The intersection of Information and Communications Technology (ICT) and device connectivity creates value at two disparate ends of the business spectrum. New IT technologies like cloud computing are moving to the enterprise and rapidly being embraced. Managed IT services will increasingly dominate ICT systems and networked services development.
At the other end of the spectrum, the rise of the machine-to-machine (M2M) and the “Internet of Things” has helped transform product companies into value-added service companies. Manufacturers are learning that by putting products on networks they are essentially placing themselves into continuous contact with their customers, thereby enabling them to better understand their customer’s needs and act appropriately.
The intersection of these two trends creates an opportunity for new differentiated business models by cleverly combining the potential of both. The two need to be interwoven and mutually supportive, and increasingly, success in either goes to the player that effectively utilizes the combined potential of both.
A new generation of systems architecture (hardware, software, network technologies and managed services) that provide real-time awareness based on inputs from machines, people, video streams, maps, newsfeeds, sensors, and more that integrate people, processes, and knowledge to enable collective awareness and better decision making.
Harbor Research believes there is substantially greater recognition of the technological capabilities and the potential benefits of connecting devices to the Internet today than at any other time. However, our analysis and, more importantly, our experience working with many diverse players in this arena points to the many challenges in realizing such growth, including:
  • Challenges with developing an effective cross-industry technology reference architecture that will allow for true interoperability and ease of deployment.
  • Complex services and solution delivery eco-systems that require supply-side players to relate in new and different ways
  • Fragmented M2M and Smart Systems vendor landscape that is not yet well aligned with the larger IT infrastructure and network services players.
  • Requirement for vertically focused solutions from a supply-side world that historically has been far more horizontally driven.
  • Technology disruption causing shifts across value chains in where revenue and profits are realized.
  • Challenges in adopting new business models and making the business case to support investments.
  • Anticipation of new product, service and systems innovation modes that are not widely adopted today.
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