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Three 2020 Predictions for LPWAN and IoT

June 9, 2020
What’s in store in this technology space for the second half of 2020? Semtech’s Marc Pegulu weighs in on new business models, asset tracking, and an edge/cloud hybrid.

This article appeared in Electronic Design and has been published here with permission.

As we approach the third quarter of 2020, the Internet of Things (IoT) persists as a focus area for the technology community. It’s no surprise, considering the sheer breadth of this technology across nearly every aspect of our lives.

Cisco estimates that there will be 50 billion IoT devices by 2020 and 500 billion by 2030. Not only that, but leading industry analyst firm IHS Markit anticipates that up to 43% of all low-power wide-area-network (LPWAN)-based IoT applications will be based on LoRa devices and/or LoRaWAN networks by 2023. As IoT and LPWAN technologies grow more pervasive, here are a few key things to keep in mind for the rest of 2020:

1. New Business Models Will Emerge

As more and more LPWAN and IoT devices deploy in 2020, we’ll see an increase in new business models. The traditional connectivity model that we’re accustomed to seeing will eventually represent less than 10% of all use cases.

Simply put, companies no longer want vendor lock-in. The traditional connectivity business model means a company is paying a certain amount of money for each device they have connected to the network. Driving this adoption is the need for more standardization and true open-source projects as enterprises move away from proprietary solutions.

Other factors driving this shift are evolving service-level agreement (SLA) requirements, access and ownership of data, demand for complete solutions, and ongoing requirements at the edge.

2. Growth Across Consumer and Asset-Tracking Applications

A lot of early volume in the LoRaWAN segment was in the smart-meter market. We’ve seen continued adoption in the smart building, industrial, agriculture, and oil and gas industries because of the low-power advantages of this technology.

Looking ahead, new asset-tracking systems enabled by new indoor solutions, along with the improved ROI of indoor/outdoor solutions with much lower device and infrastructure costs, will begin driving significant volume in 2020.

We’re also seeing relevant use cases in the consumer market. As IoT continues to mature, there will be a lot more convergence of industrial and consumer apps and the networks that target both of those different sectors

3. Hybrid Edge/Cloud Models Will Win Out

When it comes to the edge and the cloud, a hybrid model will emerge as the solution. A lot of enterprises require on-premises decision-making, but they also want to have some sort of ownership from an initial standpoint before they have the comfort to move to the cloud. The optimal solution to satisfy these needs is a hybrid deployment. With this type of hybrid, you should be able to make decisions to move things to the edge, and still have a connection to the cloud where you can take advantage of coverage, provisioning, and more.

If you look at this history of technology adoption, you’ll see that it’s typical for enterprises to own new solutions end-to-end before starting to contract components of the system out to the ecosystem for SLA improvements or cost reduction.

With that said, we’ll also see a rise in the role of major cloud providers within the LPWAN space. The market began with a mix of key players, including the cable operators, traditional equipment and networking providers, enterprise solution providers, and more. As the market for IoT has grown and matured, the demand for standardization and open source also rose. Cloud providers have realized that the critical way to access IoT data and volumes is to offer and abstract the complexities of wireless connectivity and device hardware.

Marc Pegulu is Vice President, IoT Strategy and Products, at Semtech.

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