As 2017 comes to a close, some of us at SAP put our heads together to predict the trends we think we’ll see in the Internet of Things space for the next 12 months. Here they are, in no particular order:

1)The IoT Hype Is Over—But the Trough of Disillusionment Typically Precedes Mainstream Adoption.

Customers have by now generally accepted IoT as a main driver of digital transformation. However, in 2018, they will be looking for business value and outcomes in every project. There is no doubt that all newly released products and installed assets will be connected with an increasing amount of sensors and intelligence embedded.

Source: Google Trends

2)The IoT Cloud Platform Market Will Consolidate Quickly.

Microsoft Azure and Amazon AWS will probably take the largest shares. IBM Cloud, Google Cloud Platform, SAP Cloud Platform, and Oracle Cloud will be runners up. Most other IoT vendors will move (or have ported) their IoT offering onto a leading cloud platform-as-a-service stack (GE, Siemens).

3)IoT Vendors Will Refocus and Lead with IoT Solutions Delivering Value to their Installed Base.

GE Predix (see GE Investor Update page 18) is now focusing on selected verticals and asset-intensive industries, while Microsoft is looking to manufacturing (with new focus on OPC-UA).

4)IoT Architecture Will Evolve from Data Ingestion and Analytics to an Intelligent Event-Driven Solution for End Users.

Data science, machine learning, and physics-based models will extract meaningful events from IoT data for users to take prescriptive action.

5)The Edge Will Move from Connectivity to Distributed Intelligence.

Edge solutions are becoming increasingly intelligent and autonomous, adding analytics and machine learning, while distributed edge-cloud programming paradigms emerge.

6)Digital Twins Will Evolve from Concepts to Blueprint and Implementation for Data-Sharing within and across Companies.

While many early IoT projects focus on efficiency and cost reduction, the long-term business value of IoT is in the network of business partners and digital twins. Marketplaces start to emerge to monetize IoT data while blockchain technologies ensure data provenance and device traceability (and payment).

7)Integration Will Remain Challenging Despite Advances in Open Standards and Architectures.

Industry standards will slowly emerge to address semantic integration (OPC-UA, RAMI), but take longer to get fully adopted.

8)Security and Privacy Will Remain Key Concerns.

The standalone IoT security market is dead, but IoT security will be embedded into hardware, network, and systems, with IoT security becoming a dedicated threat domain. Data privacy legislation and concerns (specifically in Europe and China) will impact IoT architecture.

I hope these predictions will give you some food for thought over the holiday season.

Learn More

For more on what you can expect in 2018, see More Than Noise: Digital Trends That Are Bigger Than You Think.

This post was originally published on TomRaftery.com

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