The Internet of Things (IoT) market is growing rapidly, but most of the data exists in proprietary siloes. The Economy of Things (EoT) represents a new way to share data across ecosystems, unlocking new monetisation opportunities. We forecast EoT will reach an inflection point within the next few years with over 10% of IoT devices being EoT-enabled by 2030.
Progressing the Economy of Things (EoT)
The Internet of Things (IoT) has rapidly gained traction in the last decade. Many billions of IoT devices and machine-to-machine (M2M) applications have been developed creating efficiencies and enabling more intelligent, informed and automated decision-making in industries as diverse as manufacturing, healthcare, and transportation. Despite this, telcos are struggling to unlock significant IoT revenues today .
The unfulfilled potential of the IoT
The true value of IoT data today is unrealised and not business enabled. Today, data insights generated from IoT are typically focused on improving internal efficiencies within one organisation. In the future, IoT should both drive internal efficiencies and create new revenue opportunities through making some of the data available for external organisations to purchase.
The fact that the IoT data generated cannot be shared across different IoT devices and systems, is missing a great opportunity to unlock wider collective value across a broad network of connected devices. Most IoT devices are closed command and control solutions where only the device and the manager of the device can communicate. This siloed approach means that opportunities are missed to combine data sources to create more contextualised insights with deeper value.
For example, while a coffee company may know what coffee you order (data collected from your connected coffee machine), without sharing that data across a broader network (such as data also collected from your connected smart metre, fridge and car), they will lack the wider context of your other habits/likes/dislikes which limits the targeted advertising they can achieve. Device owners are also often unwilling to share their IoT data with other businesses citing concerns around data security and authorisation and the difficulty in providing an immutable track record of each transaction.
So, how can data generated from IoT devices be monetised and shared across the wider ecosystem?
Economy of Things: The natural next step
The answer could lie in EoT. The term was coined by the IBM Institute for Business Value and represents the ”liquification of the physical world” where physical assets (the ”things”) in IoT become participants in digital markets . EoT signifies a network of participating connected “things” that can interact and communicate with each other to trade and transact autonomously. EoT offers the ability to anchor an identity to an IoT device to be able to transact autonomously. EoT provides true interoperability that can redefine the limits of a traditional IoT ecosystem.
Driving the transition from IoT to EoT relies on creating a platform that creates open participation and collaboration between a cross-industry ecosystem of partners. This interoperable infrastructure helps bring EoT into reality, providing the fundamental brokerage of data products, services and IoT data across the platform.
We are expecting to see the inflection point by 2028 as businesses look towards the EoT to enable the monetisation of their IoT data. This inflection is partly being driven by the sheer number of connected IoT devices that exist today within close proximity to each other. Each are capturing transactional data that could be of value to the other, rather than from larger data sets from distributed sources.
We forecast that the number of EoT devices will grow at a compound annual growth rate of nearly 70% from 2024 to 2030, representing up to 10% of total IoT devices by 2030. Of these EoT devices, up to 20% will be cellular connected devices by 2030.
Table of Contents
- Executive Summary
- The unfulfilled potential of the IoT
- Economy of Things: The natural next step
- Transitioning to the Economy of Things
- Enter Vodafone DAB platform
- Initial EoT use cases focus on mobility
- Vodafone debut use case: EV charging
- Supply chain monitoring is another leading EoT use case
- There are endless potential use cases
- Primary revenue stream revolves around data monetisation
- Recommendations for enterprises
- A message from our sponsor
- A3 for enterprise: Where should telcos focus?
- IoT security: The foundation for growth beyond connectivity
- Innovation leader case study: Telefónica Tech AI of Things