Dermot O’Shea, Co-Founder and Joint CEO
The adoption of Internet of Things (IoT) technologies has certainly been on the rise, and just about every industry—in every corner of the globe—has made strides forward with IoT projects. We’re seeing Smart City initiatives pop up around the world, Smart Metering projects mandated by governments, healthcare initiatives developed that drive adoption of IoT devices, and so on.
However, the problem with a lot of IoT projects to date: Many of the successful ones have taken Herculean efforts and special circumstances, and oft-times serve as a model of what is possible… only if all of the stakeholders agree. One of the biggest obstacles in certain IoT verticals has been the question of “Who’s going to pay?” The solution shows tremendous potential, but who will fund it?
We are beginning to see some resolution to that question as clear value is derived from the IoT through specific use cases. However, we are not over all of the barriers that cause a lack of funds to be available to start IoT projects. Let’s take a look at a few specific examples:
Utilities: In a Smart Metering use case, it’s clear who is going to pay—eventually, it’s the consumer of the utility. In Austin, Texas, for example, the city is trialing smart water meters after thousands of complaints over skyrocketing water bills. The city has received approval for an $80 million loan to replace all meters over the course of five to seven years. The trial has already delivered results, helping homeowners discover leaks in their irrigation and other water systems, ultimately saving them money in the long run. However, it’s expected each home will see its water bill rise by 70 cents a month on average to pay for the smart meters.
In Europe, the EU’s mandate to replace at least 80 percent of electricity meters with smart meters by 2020 (wherever it is cost-effective to do so) is finding some resistance, not only from residents, but also from entire countries who have said the economic benefit isn’t there. A separate initiative in the UK is backed by European Fund for Strategic Investments (EFSI), but it’s practical to think this cost will also trickle down to taxpayers.
In my own home country of Ireland, there have been street protests and refusals to pay for water charges. Meters were installed without buy in from the consumers in a country where water is certainly not in short supply!
Healthcare: There’s no doubt that wireless IoT devices are having an impact on patient care and wellness, but many IoT devices for healthcare are out of the financial reach of average patients without the help of insurance companies. The same can be said in the hospital, where there are obvious use cases that demonstrate the benefit for the doctors, providers and the patient, but the hospitals are already working under constrained budget circumstances and can’t afford to work this new equipment into the mix.
The market may be aided in a move forward not by advances in technology, but rather by a change in marketing. By redefining many IoT devices as ‘wellness devices’ as opposed to calling them ‘medical devices’, all stakeholders in the healthcare value chain—patients, doctors, hospitals, providers and insurance companies—seem much more willing to buy into the use of and payment for IoT-enabled healthcare devices.
Smart City: There is still a barrier preventing this market from fully adopting IoT. After all, residents don’t necessarily want a “Smart City,” they just want traffic and parking congestion to ease, services to run as efficiently and cost-effectively, and their taxes to be as low as possible. The vendors expect the cities and municipalities to pay for Smart City services, hence increasing prices of services to the taxpayer. These solutions need more maturity to show how they lower costs and benefit the environment. There also needs to be more agreement from all the players in the supply chain before greater adoption can occur. Security and privacy has also always been a big concern, particularly for urban dwellers outside of the United States.
The benefits of IoT are clearly being realized, and we’ll see even more advances this year as price points continue to drop. However, the industry as a whole needs to create a more common blueprint that answers the question “Who is going to pay?” and show clear value propositions for all stakeholders for the IoT to reach its full potential.
Dermot O’Shea, co-founder and joint CEO of Taoglas, is a seasoned IoT entrepreneur, with more than 15 years’ experience in the global electronics industry spread over roles in Europe, Asia and North America. He is recognized as an expert in the antenna and wireless business. Dermot currently serves as Joint CEO of Taoglas Group and President of Taoglas USA – the leading M2M/IoT antenna solutions provider. Dermot co-founded Taoglas with Ronan Quinlan in 2003 and together they have led the company to exponential profitable growth. Dermot has also helped Taoglas earn recognition globally as the market leader for M2M and IoT antennas.
For more information visit www.taoglas.com.