With the continued maturation of low power wide area networks (LPWANs) and the Internet of Things (IoT), here are my predictions for the coming year:
1. LPWAN and IoT devices deployed in 2020 under a traditional connectivity model will represent less than ten percent
A connectivity business model (that is, paying X dollars per month for each device connected to a network) is the most familiar business model in the communications industry. However, the majority of enterprise and volume use cases for the IoT are moving to other business models. The driving factors behind these alternative business models are:
- SLA requirements
- Access and ownership of data
- Demand for complete solutions
- Edge requirements
2. Asset tracking will be the “key app” for LPWAN
The highest-volume use cases in 2019 fell into the smart building and smart metering vertical markets. New asset tracking systems enabled by new indoor solutions, along with the improved return on investment (ROI) of indoor/outdoor solutions with much lower device and infrastructure costs, will start to drive significant volume in 2020, moving asset tracking ahead of other use cases.
3. Half of all enterprise deployments will deploy on-premises LPWAN network solutions at the edge before moving to Cloud-based network solutions
The driving factors behind on-premises and edge solution requirements are:
- Ease of deployment with LPWAN
- Data/network security
- Critical low latency edge decision making
- Availability or quality of backhaul
- Interfacing with existing on-premises systems
If you look at this history of technology adoption, you’ll see that it is 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. One historic example of this is in data storage: most companies started with on-premises data storage before moving to the Cloud. Hybrid solutions that offer both edge/Cloud options and transition between them will win the majority share of volume.
4. Satellite will play a significant role in LPWAN going forward
There is flurry of activity in the satellite space. This is driven by small, lightweight satellite designs and new low-cost deployment services. In addition to traditional players, there are approximately 20 new start-ups in the low-cost low Earth orbit (LEO) space, all with designs for satellites that are about the size of a basketball. Companies in this sector are projecting that worldwide coverage is attainable for a cost of approximately $20-25 million, making it very cost-competitive compared to traditional tower deployment models in use today.
5. Large Cloud providers will start to play a major role in LPWAN
Mobile operators, cable operators, semiconductor companies, telecommunication equipment providers, enterprise solution providers, start-ups, and new market entrants have been the primary drivers of the LPWAN market to date. Major 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.