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Internet of Things (IoT)


The internet of Thingd (IoT) refers to a linkage of physical devices, appliances and other items coupled with electronics, software, sensors, and actuators that have network connectivity that enables these components to connect and interchange data. IoT embodies a vision that the internet can extend into the real world, thus connecting physical items from the virtual world; they can be controlled remotely.

Many experts estimate that IoT will connect about 30 billion components or objects by 2020. It has also been estimated that its global market value would reach $7.1 billion by 2020. This article covers companies that help setup the IoT infrastructure chain; these companies help provide solutions that connect these devices to the cloud, for example, Intel Capital, Qualcomm , Cisco etc. The companies covered here also include hardware and software providers, network service providers and enablers.

Device management platforms that help manage and maintain IoT devices for end use by other companies are also covered here.

Problem and Implication

The trends are in favor of this ubiquitous technology as many startups receive funding for developing newer ways of connecting devices, but there are some issues raised by the companies and customers in this sector:

  • Privacy: This ranks high on the list of problems faced. There are concerns over privacy and security and the issue of compromised data has increased the number of defaulters in the economy. •

  • Hacking and cyberattacks: Cyberattacks on IoT devices rose to about 280% in the first quarter of 2017 and the changing of IoT devices to bots controlled by the Mirai malware is an issue that plagues this industry. Many investors and users prefer to wait till it stabilizes before dipping into the landscape.

  • Customer Adoption: According to a survey done by Deloitte, adoption of a connected landscape especially when compared with other newer technology like autonomous cars and entertainment system is on a slow growth rate. This largely due to various factors like cost, doubts, and complexities involved in linking objects together.

  • Data storage and analytics: A major challenge for IoT application makers is the cleaning, processing and interpretation of the huge data collected by sensors. Bulk data requires high data acquisition requirements and currently the internet is to be held accountable for about 5% of the energy spikes involved in this process.

  • Regulatory standards: Data brokers (companies that collect and sell data) do not have a regulatory market. In the IoT market, there is a lack of transparency over who has access to the data and its usage. It is required that guidelines to put to help in the usage of data.

  • Business buy-ins: It can be hard persuading stakeholders to invest in IoT because of the perceived risk involved. Although there is an abundance of cloud based and customer-focused IoT, it does little in convincing them to invest.

Need Payoff

1380+ companies in the sector, 302 funded in last 5 years, $1.8B invested in last 2 years. Most Active Investors: Intel Capital, Techstars Central, Cisco Investments, Momenta Partners, 500 Startups. There are 4 subsectors here: Hardware and software modules, IoT Network, Security and IoT Platforms.

IoT has far reaching application in many industries as represented in the table below

Source: Ericsson, M2M Magazine 2013, Zebra Consulting/Forrester Research, IBM, McKinsey & Co., Data Informed, ZDNet

Some other benefits include:

  • Better decision making: Large chunks of data enables smarter decision making. The ability to see into system behavior and the analyzing of patterns that produce new insights and ideas often reduces testing cycles in production and manufacturing thus reducing cost. The benefits of data cannot be overemphasized.

  • Revenue Generation: IoT platforms aim at reducing cost and expenses by improving efficiency. Analysis of data can help in developing new revenue opportunities that can help startups gain competitive advantages in their competitive markets.

  • Marketing Automation: The creation of a network of customers’ knowledge (locations, preferences and buying patterns) can help in faster delivery of products and services to them. This feature or benefit has been used by major corporations like Apple and Google but their use isn’t alienated to only large business owners, as SMBs, house owners and citizen are catching up with the trend.


A recent research claims that over 29% of interviewed corporations already have IoT solutions and expect a 48% surge in 2018, as businesses start seeing benefits of IoT. The trends shows that many CEOs and large businesses are venturing into this landscape because of the cost effectiveness of ubiquitous computing, and the only word of caution to investors and entry organizations is to also invest in securing their devices.



Tracxn Report, November 2017

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