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Back to the Future —
Smart Systems and IoT Evolution Challenges

Seven Obstacles We Must Overcome
to Realize the Full Potential

Many IT equipment suppliers, silicon suppliers, enterprise software players and wireless carriers have re-elevated their interest in the Smart Systems and Internet of Things arena because of the arrival of 5G wireless technologies.  Many of these players are “old hands” having focused on connected opportunities for some time and many are new faces.   It’s a bit ironic that after so many years of trying and so many distinct chapters in this ongoing market development story (i.e. pervasive computing, M2M, etc.), that it’s like being “Back to the Future.”  It looks like the new incoming class of students at a university who are trying to look “cool” but have yet to really figure out the new social order in the face of the upper classes who have all seen this before.

Because of 5G many players are making big pronouncements concerning the scale of this next generation of wireless opportunities but, as we all know, there are many hurdles and barriers to adoption of new systems that have little, if anything, to do with the core technology.

While we believe that the Smart Systems market opportunity is stepping into a new chapter technically, our experience working with many diverse players in this arena points to the many persistent challenges realizing its full potential.  Our analysis points to seven fundamental obstacles:

» 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 ecosystems that require supply-side players to relate in new and different ways.

» Fragmented 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.

When it comes to laying the groundwork for the future Smart Systems and Internet of Things market, we think most people assume that “the technologists are taking care of it.”  They take it on faith that the best possible designs for the future of smart systems will emerge from large corporations or centralized authorities. But those are big, unfounded assumptions.  In fact, most of the IT and network services players are showing little appetite for radical departures from current practice. Yet current practices will not serve the needs of a genuinely connected world.

When we say Smart Systems we are literally contemplating incorporating the Internet into physical things and infrastructure, making something like a “smart building” much easier to contemplate than ever before. The building itself is literally on the Internet and the Internet is in the very matter of the building. If this is such a good idea, why has it been so hard?

So how will all this work?  For all of this smart systems value to be realized the alignment of embedded systems technologies, intelligent device communications, network services and IT infrastructure and application services will all have to be re-thought.  The knowledgeable players in this arena today and all the newcomers will have to commune and align themselves in ways that will change all the player’s business models.

Though their business models are intermingling today, all of the major categories of “IT and network arms merchants” have historically operated within well-established business models that reflected the distinctive competencies at the core of each group. The advent of Smart Systems is causing a blurring between these legacy business models and all the existing emergent players as well as the larger IT and network players will ultimately have to re-think their strategies and relationships.

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February 21, 2019