The emergence of Data Service Exchanges: liquidity for the IoT
M2M applications are at the core of the M2M opportunity. Every connected device must have an associated application, and the development of those applications and the provision of supporting capabilities (such as, for example, data analytics, data mining and other data services) represent real commercial opportunities for a range of players. Whilst the industry has recognised that the M2M marketplace is highly verticalised and fragmented, few participants are yet taking the contrarian approach of seeking out opportunities based on particular horizontal capabilities and then seeking to differentiate on the basis of those capabilities.
We expect that this more-horizontal perspective on M2M markets will become a dominant theme. Up until now the M2M market has been dominated by industry behemoths. As smaller players enter the market they will naturally look for ways to differentiate by developing specific capabilities. The mass market phase of M2M (and IoT) adoption will be characterised by a more differentiated ‘horizontal first’ approach.
Data Service Exchanges (DSEs) are the entities that will provide the ‘liquidity’ required to make such a market function. Data Service Exchanges will allow niche providers to easily ‘plug-in’ to larger and less differentiated service providers (and vice versa). This will usher in a phase of development of the IoT that is characterised by the establishment of an ecosystem of differentiated data service and platform players. Ultimately, products are better than services in the IoT market, and the market will be strengthened when participants play to their strengths.
In this White Paper, we seek to provide a new perspective on the Internet of Things, characterising it as a network of ‘Subnets of Things’. From the perspective of this network of Subnet of Things (SoT) characterisation of the IoT, it is clear that a market opportunity exists for a new kind of data service exchange player.
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