Over the years, the Internet of Things (IoT) has evolved into something much greater: the Economy of Things (EoT). The number of connected things surpassed the number of connected humans for the first time in 2022. The number of IoT connected devices are growing in practically every industry, and is even predicted to reach 29 billion worldwide by 2030.
IoT has quite literally become a household name as it is a key component in everyday items, such as appliances, cars and consumer products. Additionally, IoT has become a critical part for the streamlining, simplification and overall technological capabilities for enterprises.
These IoT connected devices form a critical backbone of data for industry. But what if those devices—and their data—are unlocked to autonomously share, monetize and transact on their own generated value? What new organizational, cross-industry or societal innovation could be generated as a result? And what is the role telecommunications service providers play in enabling and scaling the EoT?
The Economy of Things has arrived
The EoT is enabled by artificial intelligence, data, IoT and blockchain, bringing liquidity to the IoT. It signals the move beyond context-aware connected IoT devices to one where IoT devices have themselves become digital assets, capable of real-time discoverability, indexing and autonomous transactions.
Telcos play a central role in enabling and scaling the EoT, and they are uniquely positioned to do so. Similar to how our own digital data is currently exchanged, traded and monetized by third parties, providing connected devices with a unique identity and an ability to transact through a digital wallet unlocks the digital assetization or liquification of IoT. The anchor identity of the device along with metadata about the device itself, data about its locatio and transactions made on its own behalf is its own unit of value.
For example, a fleet truck outfitted with an EoT-secure identity and wallet is able to pay for its own fuel at a similarly EoT-enabled fuel pump without the driver having to open an app or provide a credit card. The transaction linking that specific vehicle to that fuel pump is a unit of value representing participants, location, time and transaction amount.
By connecting together related units of value within an ecosystem of service providers, we build value chains that can span industries and form the basis of cross-industry innovation in processes, operations and business models.
The engines of growth and innovation from the EoT lies in three parts:
- Hyper-connected, collective value-based ecosystems that solve complex persona-based challenges and drive the next reinvention of industry;
- These new value chains are underpinned by a common, interoperable infrastructure, service platforms that facilitate services and data exchange solutions; and
- Data owners are incentivized to share data whilst preserving privacy to drive collective value for all participants.
Telcos at the heart of the EoT
Telcos play a central role in leading the transition from the IoT to the EoT as a technology enabler as well as a convenor of ecosystems and collective value.
The widespread adoption of EoT requires a quantum-secure IoT network (sensor, edge device, core or cloud system) grounded in the zero-trust concept of “never trust, always verify.” Telcos can extend secure enterprise data and AI capabilities to the edge of their networks, supporting real-time discovery, usage and monetization of compliant EoT data and use cases.
Telcos can also play the role of data providers as well as data marketplace and brokerage operators within the ecosystem. Vertical data platforms owned and operated by telcos and targeting a specific industry such as automotive, agriculture or financial services already exist today. By linking EoT platforms with these vertical data platforms, Telcos can readily unlock industry-specific EoT use cases, generating new, “adjacent to core” revenue streams.
Telcos also play an important role as a convenor and anchor participant in viable EoT ecosystems, bringing to bear their enterprise and IoT customer and consumer segments. Mobile devices become an additional participant in the EoT as digital extensions of consumers and users. Consumer ownership and control over identity and personal data is a key amplifier and enabler of EoT ecosystem value and the unlocking of B2B2C and B2C2B business models and innovation.
The EoT is ahead of us and represents a critical opportunity for Telcos. Championing the evolution to the EoT enables telcos to move beyond connectivity to being the heart of entire new market platforms that bring and extend new digital and transactional services across industries.
Hyperconnected ecosystems drive cross-industry innovation
Solving complex challenges is not done in isolation. Capitalizing on the innovation opportunity from the Economy of Things requires new methods of exchanging collective value between users, devices and industries. It is important to break down barriers across industries to create new value chains that are outcomes-driven.
The EoT requires interoperable marketplaces of exchangeable value based on verifiable, trusted data that can be surfaced at the right time and in the right channel.
These marketplaces of value can take the form of data, asset or developer marketplaces. For example, you can build upon the initial fleet truck and have an aggregated view of the whole fleet and its fueling, mobility and payments history. That particular data is valuable internally—providing insights to optimize fuel costs, vehicle refresh, route recommendations and general driver well-being. It is also valuable externally: to fuel companies, vehicle manufacturers, retailers and other brands wanting to engage in connected driving experiences for the fleet.
As a participant in an EoT data marketplace, the fleet owner can publish and monetize data assets underpinned by smart contracts that govern its accessibility and use to ensure compliance. It may also decide to publish data services in the form of APIs to facilitate third party developer solutions leveraging the EoT data.
The collective value lies in the represented, connected ecosystem of EoT devices, users, cross-industry participants with the network effect triggered through adoption at scale. As more participants onboard onto the EoT ecosystem, the higher the potential value and collective outcome from use cases.
Data ownership redraws value models
EoT data owners provide behavior, usage and interaction context. Data brokerage services, which governed by data owner permissions and data sovereignty rules, facilitate the discovery, exploration and use of permissioned data across relevant ecosystem participants.
At the heart of the EoT lies permissioned consent of IoT user-data owners that enable and grow marketplaces of value. Data owners, whether they are consumers or enterprises, provide the essential behavioral, usage and interaction insights that elevates and amplifies the value of EoT device data. Data owners therefore should be incentivized to share their generated/owned data to drive further value for the ecosystem and be able to do so whilst preserving privacy.
A key enabler is the adoption of decentralized identity and digital wallets for data owners and IoT devices that provide both an anchor identity and a means to transact with connected devices and assets.
In the case of the fleet vehicles, connecting a specific driver to a specific vehicle would unlock driver-specific behavior patterns and fleet vehicle usage. This pairing would generate insights to specific driver well-being as well as contextualized, personalized recommendations for that driver from the fleet company or its ecosystem partners. The driver being the data owner of their behavior patterns should be properly incentivized to share their anonymized data with the ecosystem, either through value added services or loyalty program offers.
The future of EoT
The ubiquity of connected devices creates an ever-expanding market for sourcing, blending and refining data into actionable, real-world insights. The EoT needs to be built on open innovation platforms grounded in interoperable infrastructure, common standards and a connective fabric of data and services. Engineering of these open innovation platforms is a collective exercise, grounded in key principles of open systems, resiliency and low barriers to entry. Access to this infrastructure is enabled by marketplaces of microservices and toolkits where a key value layer is composed of data, data services and data products.
For a more in-depth look at how the EoT is being realized, read the IBM for Business Value report below.
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