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The DLA Piper Technology Summit 2016 has been a ground breaking event bringing together thought leaders from across the European and wider technology and other key industries.
Here are my main takeaways from the panel on the Internet of Things (IoT) which I had the pleasure of moderating at the DLA Piper Tech Summit in London with these great panelists: Mike Sutcliff, Group CEO at Accenture Digital; Ludovico Fassati, Head of Vertical Market Development at Vodafone; Mark Darbyshire, VP Platform – Integration at SAP; and Sanjay Pradhan, Principal Solutions Engineer at Salesforce.
The discussion was very interesting and, from my perspective at least, the key insights that surfaced were the following:
1. The IoT market has not yet reached its hype
There was unanimous opinion that the IoT market is still far from reaching maturity. A number of companies did not fully understand the potentials of IoT technologies and would appear to be maintaining a “wait and see” approach, monitoring what their competitors are doing. Such companies need to be “evangelized” in order to more deeply appreciate the impact of IoT technologies on their business, which at the same time will lead to new legal issues and liabilities.
At the same time, there are companies like Accenture which have over 100 IoT products in their pipeline and which is doubling the revenues it is deriving from the IoT sector year on year.
2. Cyber risks are an issue, however customers’ trust rather than solely standards are the solution
The increase in cyber-attacks is a threat for IoT technologies whose backbone consists of large databases and connected data. But the solution to cyber-attacks cannot be:
- either granting the full control of a platform to the same supplier, since the IoT requires the creation of a connected environment of different suppliers;
- or the approval by regulators of standards of security since standards will always lag behind the capabilities of hackers.
It is essential for companies to create a relationship of trust with their customers on their products. And such trust requires a continuous investment in innovation in order to limit the potential risks.
Standardization might be the response to limit potential liabilities towards authorities and customers, especially in the light of the upcoming EU Data Protection Regulation. But the success of IoT technologies requires a relationship of trust between suppliers and customers.
3. The market will force interoperability between IoT platforms
There are, currently, over 360 IoT platforms and 100 protocols of communication between such platforms. However, this would appear to be a transitional phase which may soon evolve with the consolidation of a few platforms.
The potential cyber risks should not, alone, be considered a sufficient reason for avoiding the necessary integration inherently required for a connected environment.
Data is the critical foundation for IoT technologies and closed platforms will struggle to survive as they might not exploit the full potential of the IoT.
4. European privacy laws might be both a disadvantage and an advantage for IoT technologies
European data protection rules are considerably more restrictive than the privacy regulations of other jurisdictions. The scenario may grow yet more challenging with the EU Data Protection Regulation which is set to increase the applicable sanctions by up to 4% of the global turnover of the breaching entity.
There is, arguably, no doubt that such regulatory restrictions might hinder or even prevent the launch of some IoT technologies in the European Union. At the same time, they might become a competitive advantage because a higher level of compliance will lead to more trust by consumers in these technologies, which would thereby circumvent the so called “big brother” effect.
The negotiation between industry and data protection authorities will be crucial insofar as it will need to identify solutions that stand to balance business needs with privacy compliance obligations. In this respect, the contribution of associations like IoTItaly will be crucial in the negotiations with privacy regulators.
5. The IoT will not have a single winner
None of the panelists was of the opinion that there will be a “Google of the IoT”. Our panelists’ belief was that it is more likely that there will be market leaders in the different segments of the IoT which will require a “concertation” between different platforms. The IoT has such a broad scope that no company will be in a position to exert absolute control over all of it.
Open data regulations might not be the panacea that boosts the growth of the IoT, however, Governments will play a key role in ensuring all stakeholders understand the underlying public interest in the exploitation of such technologies. And again associations like IoTItaly might be a valid representative of the industry in the discussions with public authorities.
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