All the companies interviewed by IDC that are active in the IoE indicated they have yet to actually quantify any concrete benefits they aim to achieve.
The Internet of Energy (IoE) ecosystem is unfolding, revealing new participants on a daily basis. IoE ecosystem players include white-goods manufacturers, technology companies, utilities, telcos and communication service providers, entertainment and over the top content providers, insurance companies, and property market developers. This is a very promising sign as it indicates that the value of the IoE is being recognised.
The buzz of interest in the IoE ecosystem might also be its greatest challenge, as there is a lack of clarity about who will do what, with players uncertain of which role or game they want to play. Most IoE players are focused on carving out a space for themselves in this transforming sphere and are almost exclusively driven by a need to succeed in the short term, selling more of their own products and grasping any revenue stream they can get their hands on.
However, across the board there is a lack of real understanding about the potential gains, both in the short and long term. Companies of all types continue to dip their toes into various areas of IoE, and are busy in a “trial and error” phase for new products and value-added services. They expect to continue these activities over the next two years, after which they hope to have more insight into what products, value-added services, and business models work best for them and which ones they should pursue in the long run.
All the companies interviewed by IDC that are active in the IoE indicated they have yet to actually quantify any concrete benefits they aim to achieve, for themselves or their customers. On top of the hard benefits of new revenue streams, they also aim to tap into the soft benefits. For instance, several companies indicated that they are exploring what value-added services they can offer for free to improve their customers’ perception of their company, improving their customers’ loyalty and helping to reduce churn.
Notably, there are a growing number of consumers that are investing in EVs and solar panels with home batteries and which are opting to join community energy systems that promise some level of integration. This is a threat to the IoE industry, which is running out of time to cautiously trial and test. The first-mover advantage may differentiate future IoE leaders.
The IoE presents a myriad of opportunities for companies and organisations that finally move beyond the trial and test phases. There will be rewards for first movers and future IoE leaders. As the IoE ecosystem evolves, new participants that do not even exist today are expected to emerge. The major benefits for some of the key stakeholders in the IoE ecosystem are highlighted in the figure below.
For instance, IDC forecasts that the home automation use case of IoT (specifically hardware, software, services, and connectivity) could be worth almost $10 billion by 2020, growing over the next three years at a CAGR (Compound Annual Growth Rate) of more than 35%. The IoT market (specifically hardware, software, services, and connectivity) for smart large appliances is expected to grow more than 50% between now and 2020, reaching $3.2 billion.
This blog has been extracted from the whitepaper “The Internet of Energy – Enabling Residential Demand Management” produced independently by the IDC (International Data Corporation). You can download a full version of the whitepaper here.
If you would like to explore the topics discussed in this white paper in more detail, please contact geo by phone on +44(0)1223 850 210 or by email at email@example.com.
The buzz of interest in the IoE ecosystem might also be its greatest challenge, as there is a lack of clarity about who will do what, with players uncertain of which role or game they want to play.