Smart cities could waste US$341bn by 2025 on non-standardised IoT deployments

Machina Research analysis shows that using non-standardised versus standards-based solutions for IoT will increase the cost of deployment, hinder mass scale and adoption, and stifle technology innovation for smart city initiatives worldwide.

City authorities and their technology partners could squander US$341 billion by 2025 if they adopt a fragmented versus standardised approach to IoT solution deployment. This is the conclusion reached by Machina Research in a new white paper, commissioned by mobile technology and research company InterDigital, which analyses potential IoT deployments in smart cities. Incorporating a number of vertical domains, multiple parties, and diverse IT systems, smart cities are a microcosm and good illustration of the wider IoT. As such, they reflect the financial and operational risks associated with fragmentation and complexity in IoT deployments.

Commenting on the adoption of IoT, Jim Nolan, EVP, IoT Solutions, at InterDigital said: “The world of IoT is currently characterised by competing technologies and platforms, further complicated by numerous standards development organisations, and this fragmentation is causing a delay in the widespread adoption of IoT,”. “We can’t hope to realise any smart city ambitions until all stakeholders can agree on a common set of IoT standards. Machina Research’s analysis proves the extremely valuable business case for an open standards-based approach to IoT.”

Smart cities are a complex and multi-dimensional vertical within the IoT landscape, crossing the public and private sectors. Open standards are imperative for the development and deployment of IoT applications and services, where defining a best working practice will ensure stakeholders can maximise the opportunities presented by this rapidly evolving market. Key findings from the report include:

  • Using non-standardised IoT solutions, the cost to implement smart city deployments could reach US$1.12 trillion by 2025;
  • Adopting standardised solutions on the other hand would equate to a cost of US$781 billion – a savings of US$341 billion wordwide by 2025 – 30% of the non-standardised total;
  • Cost savings would result from interoperability, freedom from vendor lock-in, and reduced systems integration costs that IoT standardisation provides.

The benefits associated with a standards-based approach to IoT are not purely financial. The report also indicates that, by 2025, a standards-based IoT environment could also mean a 27% increase in the number of connected devices within smart cities, and could improve the speed and extent of adoption of smart city applications.

Jeremy Green, principal analyst, Machina Research
Jeremy Green, principal analyst, Machina Research

The introduction of standards-based IoT solutions would also create simpler processes for building new applications and allow easier replication of schemes, and inherent interoperability will also make data monetisation easier. Ultimately, standards-based IoT solutions will make smart cities more attractive, provide opportunities for application developers, and accelerate technology innovation.

“Government bodies investing in smart city initiatives to drive civic improvements are under constant scrutiny to ensure public funds are spent wisely. Furthermore, the existing ‘internet of silos’ approach to IoT deployment is delaying the widespread adoption of IoT solutions, including smart cities,” said Jeremy Green, principal analyst, Machina Research and lead author for this report. “Our research demonstrates that open standards can solve both challenges, ensuring money is invested more efficiently, and dramatically accelerating IoT adoption and growth.”

The full White Paper, entitled ‘Open standards in IoT deployments would accelerate growth by 27% and reduce deployment costs by 30%’, is available to download [here]

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