April 5, 2016

The Growth of IOT: From Analytics to Security and Beyond [REPORT]

This week, Verizon published a new report on the state of the Internet of Things. IoT encompasses almost everything that’s digitally connected on the planet. Whether it’s sensors in soil to monitor moisture, cameras at road intersections to monitor traffic, or flow meters in a pipe to monitor oil distribution, they are all generating data. With a little bit of analytics on top of that data layer, consumers, business owners, and enterprises can understand their respective environments. And taking that one step further, they can even influence those environments so that the soil can be watered if too dry, the traffic flow can be diverted if there’s an accident, or the flow valve can be turned off if oil prices drop below a certain value. This is the complexity of the vast IOT ecosystem.

From an investor’s point of view, the IOT represents a similar vast opportunity. At Verizon Ventures, we’ve already made big bets on companies in the IOT ecosystem including Veniam, who’s powering the internet of moving things through mesh networks to Filament, who’s building IoT applications for industrial settings.

Today, we see two key areas that have featured prominently in investors’ deal flow: analytics and security. Investment in enterprise IoT has grown dramatically in the past 12 months when compared to the preceding 12 months. This is the result of the number of connections in markets such as agriculture, smart cities, and smart energy growing by 33%, 43%, and 58%, respectively. 

The growth of data, and therefore understanding, within those sectors means there is a thirst to do something with that data. And startups are working to slake that thirst with solutions in analytics. Beyond just dashboards that describe the current state of affairs in a business, startups are now developing solutions to predict future trends and beyond that, prescribe actions and recommendations that business owners can follow.

Along with all of the growth in connections, data, and analytics, investors have also been focused on IoT security. Given the breadth that IoT covers, securing how a solution functions is critical. Whether it is gathering the correct data that influences future decisions, or controlling the valve on a process input, any tampering across data, control, and therefore decision making may result in harmful and potentially catastrophic results. 

Due to the speed and scale at which IoT is growing, solution developers are struggling at managing it all, and security is sometimes left as an afterthought. Devices that are super cheap, and therefore disposable or replaceable mean that developers do not invest in basic functionality such as software and firmware updates. To combat this issue, startups that work to protect data inputs or a device’s primary logic and functionality from being compromised are seeing great traction from investors in this growing market.

While analytics and security are receiving a large share of investors’ attention in the world of IoT, they are not the only solutions that stakeholders should consider from a development or investment standpoint. Whether it’s the onboarding of new devices to a network, managing and creating the connective tissue across all of those devices, or building the applications to support a vertical market, there are many opportunities in IoT. And this is what makes it an interesting time as a startup founder or investor.

To access and read the full report, click here.


Related posts from Verizon Ventures:

Verizon Ventures Helps Filament Enable A Decentralized IoT Economy

Transform Your Business with the Internet of Things

Verizon Venture Forum: IoT – Connecting Devices To Drive Solutions

Tags: Analytics , IoT , Daniel Chui , Security , Verizon