04 May 2016

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

City authorities and their technology partners could squander USD341 billion by 2025 if they adopt a fragmented versus standardized 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 analyzes 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, Executive Vice President, IoT Solutions, at InterDigital said: “The world of IoT is currently characterized by competing technologies and platforms, further complicated by numerous standards development organizations, and this fragmentation is causing a delay in the widespread adoption of IoT,”. “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.”

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 maximize the opportunities presented by this rapidly evolving market. Key findings from the report include:

  • Using non-standardized IoT solutions, the cost to implement smart city deployments could reach USD1.12 trillion by 2025;
  • Adopting standardized solutions on the other hand would equate to a cost of USD781 billion – a savings of USD341 billion worldwide by 2025 – 30% of the non-standardized total;
  • Cost savings would result from interoperability, freedom from vendor lock-in, and reduced systems integration costs that IoT standardization 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.

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 monetization 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].

About Machina Research

Machina Research is the world’s leading provider of strategic advice on the newly emerging Internet of Things, M2M and Big Data markets. Our Advisory Service provides comprehensive support for any organisation interested in these opportunities. Our vertical market information and forecasts cover sectors such as Industry, Healthcare, Cars and Cities. Furthermore, we provide guidance on commercial and technical best practice supporting all stakeholders in the sector including users, manufacturers, service providers, investors and regulators. In addition to our syndicated Advisory Service research we also undertake a wide range of client-specific custom research projects ranging from White Papers through to full go-to-market strategies. Machina Research is staffed by the leading industry analysts in the sector.

About InterDigital

InterDigital develops mobile technologies that are at the core of devices, networks, and services worldwide. We solve many of the industry's most critical and complex technical challenges, inventing solutions for more efficient broadband networks and a richer multimedia experience years ahead of market deployment. InterDigital has licenses and strategic relationships with many of the world's leading wireless companies. Founded in 1972, InterDigital is listed on NASDAQ and is included in the S&P MidCap 400® index.

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