The Bears: Six ways the Internet of Things may remain flat this year.
Continuing the conversation about the Top 12 Bullish and Bearish Predictions for 2016, here are Bears 3 & 4.
3. Privacy and security will continue to boondoggle the IoT.
From kids’ toys to connected cars and even medical devices, we’ve already seen numerous occasions where hackers have been able to exploit critical vulnerabilities in connected devices, and we think the coming year will be marked by several dramatic and well-publicized IoT hacks.
Part of the problem is that IoT devices tend to be relatively basic, which isn’t an issue if they exist in isolation. But since they’re connected to the Internet, hackers have easy access to exploit weak defenses. Breaching modern IoT devices is such a mundane act in the world of network security that insiders have coined a term, “junk hacking.”
What’s more, these vulnerabilities tend to be most apparent in the Smart Home market discussed in the previous section. (It has a lot going against it). Many devices do not even encrypt the data they send and receive and, even if they do use encryption, it may not be enough. One’s interactions with these devices generates a traffic signature, which can itself reveal enough information for a criminal to understand a person’s personal habits, and pry their privacy.
A humorous tale of a Forbes writer being able to “haunt” a complete stranger’s house gives some glimpse of just how far to the rear manufacturers have tended to shove privacy and security concerns in the rush to develop consumer-friendly applications. Until manufacturers turn their interest more strongly to security than meeting a quick product release cadence; and until they get serious about putting IoT devices behind network intrusion detection systems and firewalls; and until they start using Software-Defined Networking that can specify the circumstances under which a Smart Home device is allowed to communicate with the public Internet, privacy and security will continue to be a boondoggle. And it isn’t going to come around in 2016.4. Big Data breakthroughs will be slow and plodding in 2016.
On the business side of the IoT equation, so much of the value lies in being able to make sense of data collected. Management’s ability to see a clear impact is directly tied to adoption. As 2016 moves forward, don’t expect a deluge of new capabilities to emerge that can better decipher signals from noise, and don’t expect a sudden slew of devices that can inform and automate real-time decisions.
Big data coming from the IoT will continue to be a work in progress for two main reasons.
- The protracted poor state of data quality in North American enterprises, where still only 40 percent of C-level executives and data scientists are “very confident” in the quality of the data used by their organizations. Source: The State of Enterprise Data Quality: 2016, a survey by 451 Research.
The growing talent gap for data scientists, International Data Corporation (IDC), predicts a need for 181,000 people with deep data analytical skills in the U.S. by 2018, and there are five times that number in positions that carry data management and interpretation capabilities. Universities and colleges simply cannot produce enough data scientists to keep up with business demands. Companies are starting to develop ecosystems of external providers to bridge this gap while they recruit develop qualified people, but once again we expect this barrier to reign in the number of Big Data breakthroughs to come from the IoT this year. Source: Deloitte’s “Analytics Trends for 2016.”
More bearish predictions to come...