Smart cities could waste $341 billion by 2025 on non-standard IoT deployments

Machina Research analysis argues 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

Smart cities could waste $341 billion by 2025 on non-standard IoT deployments

City authorities and their technology partners could squander $341 billion by 2025 if they adopt a fragmented versus standardised approach to IoT solution deployment, a new white paper by Machina Research argues.

The white paper, commissioned by mobile technology and research company InterDigital, analyses potential IoT deployments in smart cities. It incorporates a number of vertical domains, multiple parties, and diverse IT systems.

It takes the view that 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, according to the white paper’s conclusions.

“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,” said Jim Nolan, executive vice president, IoT Solutions, at InterDigital.

“We can’t hope to realize 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.”

The white paper takes the view that 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 Machina Research report include:

• Using non-standardised IoT solutions, the cost to implement smart city deployments could reach $1.12 trillion by 2025
• Adopting standardised solutions on the other hand would equate to a cost of $781 billion – a savings of $341 billion worldwide 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 Machina Research 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.

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, the Machina Research report argues.

“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 report’s conclusions will not make welcome reading for the so called non-standardised IoT standards, most of which tend to be in the low power, wide area (LPWA) end of IoT and rely on non-licensed Wi-Fi spectrum. A number of standards including Sigfox, LoRa, Ingenu and Weightless operate in the LPWA sector and have been developed to provide a low cost alternative to expensive cellular spectrum.

However, 3GPP has been working to develop cellular equivalents to the ‘non-standardised’ LPWAN alternatives using licensed spectrum. Two families are being developed: Narrowband IoT (NB-IoT) – due for certification in June 2016, and the machine type communications family options of Cat.1 (currently the only commercially available standard), Cat.0 and Cat-M (due for commercial availability in 2017).

Others have argued that because of their particular attributes, there is room for both the cellular-based ‘standard’ solutions and the so called ‘non-standardised’ IoT solutions. Speaking at M2M World Congress in London, UK on 26 April, Robin Duke Woolley, CEO of Beecham Research, argued: ‘LPWA is very complementary to the other connectivity solutions and the likes of LoRa, SigFox, Ingenu and Weightless all have strengths and weakness that will suit some applications but not others, so there is no need for the technologies to be fighting each other.’

He added that the industry is only at the beginning of developing this part of the market at the moment and that users need to decide the right compromise for them to achieve the cheapest and lowest power consuming connectivity service within the coverage required.

InterDigital’s involvement in the IoT space includes the development of wireless technologies for mobile devices, networks, and services. It is a key contributor to global wireless standards, designing and developing a wide range of innovations that are used in digital cellular and wireless products and networks, including IoT, 2G, 3G, 4G and IEEE 802-related products and networks.

InterDigital's oneMPOWER platform is driving the oneTRANSPORT initiative, an innovative smart city project focused on addressing the challenges in transportation systems with IoT technology. It enables transport information to be shared by a number of stakeholders including transport authorities, municipal authorities, and new third parties, to optimize transport networks across towns and cities.

The project, being run by InterDigital and 10 partners, integrates a multitude of previously fragmented and isolated data assets and data services into a holistic application that sets the foundation for more efficient transportation systems for cities and travelers alike.

“InterDigital has long recognized the inherent value that open standards can bring across many domains. As curiosity and development around IoT grows, it’s in the interests of all stakeholders that standards are created and implemented that increase adoption and protect against wasted investment.

“Our approach to open standards for IoT is already being realized through oneMPOWER and the oneTRANSPORT initiative. Testament to this approach is the trial and adoption of the platform by a number of municipal authorities in the United Kingdom. We expect InterDigital will play a full role in the standardization of solutions to help ensure the IoT becomes a reality,” concluded Jim Nolan.

The full Machina Research report, 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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