Internet of Things Enablers and Bottlenecks

A recent report by Berg Insights forecasts a 20.1% compound annual growth rate for shipments of cellular IoT devices. By 2020, there will be almost 240 million units in the market. This indicator is just the latest in a series of signals that IoT will soon be reshaping our lives and how we do business. Provided, of course, that IT infrastructure allows for it.

Behind The Data

The Berg Insight forecast notes that sales of long-term evolution (LTE) devices “started to take off this year” and LTE devices are on track to surpass the number of GPRS devices in the market by 2019. Easing the diffusion of LTE devices is the introduction of technological interim networks, which until now have served as barriers to transitioning away from 2G mobile networks.

More barriers remain, and over the next 2-3 years there is sure to be several incremental network improvements, meaning that new devices will have to be designed for full-on 4G compatibility, while at the same time being functional on the interim network.

Berg Insights states that a transition phase made up largely of 3G networks will peak in 2018, after which the advent of 4G mobile networks will predominate. 4G should deliver faster Internet speeds and lower latencies, but again, realizing these gains on a consistent basis may take a few more years.

Our Take

Mobile network speeds impact business operations in numerous ways, and by focusing on the disruptive potential of “digital transformation” that IoT beckons, some ITO industry watchers assume efficient and rapid adoption. In truth, businesses in many parts of the world face serious barriers when it comes to IT infrastructure.

In rich markets, transitions from 2G to 4G, indeed to 5G, are too often assumed as a given. Just recently Gartner announced its “Top 10” list of technology trends for 2016; topping the list is the “device mesh,” built around IoT. Yet today most mobile carriers in the U.S. and other developed markets still are not rolling out real 4G networks.

Instead, what’s often billed as 4G is not, even though the ITU has redefined “4G” in order to allow a broader series of networks to count under the sobriquet. Emerging markets are in general even further off when it comes to having the latest mobile networks. Business processes can’t neglect the infrastructure challenges that are likely to persist, and factoring for these challenges may delay adoption of IoT.