The development of the Internet of Things (IoT) is being held back by a lack of credible business models, according to one IBM executive.
"The Internet of Things needs a reboot already," said Rob van den Dam, global telecommunications industry leader at IBM, at CommunicAsia on Tuesday.
Despite industry predictions of significant growth in the IoT space in the coming years, van den Dam believes the space will fail to live up to its potential.
Specialist consultancy Machina Research predicts the world will be home to 26 billion connected devices by 2023, up from 4 billion last year, while Gartner puts the figure at 26 billion by 2020 and IDC forecasts 28.1 billion by the end of the decade.
But the IoT will not scale to hundreds of billions of devices "because of the high cost, because of the lack of privacy, because it is not future proof, and because the business models are broken," van den Dam warns.
He notes that the replacement cycle for many potential connected devices means the technology needs to be much more future proof. While a user might buy a new iPad every 18-36 months, the lifespan of a car could be 10 years, an aircraft 40 years, and a house even longer.
"You’re not going to change your doorknob every three years," van den Dam said.
Perhaps even more critical is what van den Dam terms "the lack of functional value" the end user can derive from a connected device.
He used the perhaps far-fetched example of a connected toaster to illustrate his point, explaining that a user would not want to pay an annual subscription to get software updates for their toaster, nor would they want to receive advertising burnt into their breakfast or have the data from said toaster sent to their insurance company alerting it to their "heavy consumption of Pop Tarts!"
"We have an issue here with the business models," he said.
The answer, he said, is for the industry to improve the endurance of business models and develop offers that are truly useful to the end user in order to foster IoT growth, as well as reducing costs, making sure devices work together so no one company can own the sp ace, and addressing issues around privacy.
