The State of the Internet of Things in 2015. And What to Expect in 2016?

December 10, 2015

Yes, it’s that time of year already when we can sit for a minute and think of what 2015 has brought and what could be next.

For the rapidly developing IoT industry the year has been good and productive: according to a recent BI Intelligence report, the installed base of IoT devices has reached 4.2 billion units worldwide. Moreover, the analysts predict that it will grow about sixfold by 2020.


One of the side effects of the fast-paced development of the IoT has been the growing number of communication standards introduced by different players, including Zigbee and Z-Wave, as well as platforms like Apple’s Homekit. In addition to those, there are also traditional ways of connecting devices like Wi-Fi and Bluetooth, as well as cellular networks.

In 2015, the number of different standards has become a significant barrier to the development of IoT. In a report by McKinsey released earlier this year, the analysts stated that “40% of the IoT’s total potential economic value can be unlocked only by solving interoperability challenges.”

According to the analysts at BI Intelligence, the most likely survivors in the battle of the IoT communications are low-power IP-based mesh networks, like Zigbee, Z-Wave, Google’s Thread and the upcoming version of Bluetooth.

Unlike other networks, mesh networks are decentralized, which means that all the devices are connected to each other. Each unit acts as a router, so that the network will stay operational even if one or several devices will fail.

IP-based mesh networks are even more reliable, as in this case they can connect to the Internet without needing a central hub, which could become a connectivity bottleneck. This also means that devices in an IP-based mesh networks can download new applications of update over the Internet, which makes them more flexible.

Unfortunately, mesh networks aren’t suitable for the uses that demand wider geographic coverage, like drones and connected cars. There are two potential ways to solve the problem: first, 3G and 4G cellular networks can be used, which do the trick but drain power very quickly. An alternative is Low-power wide-area networks (LPWAN), like Sigfox and LoRaWAN, which are being deployed in different parts of the world and hopefully will be available worldwide in the future.


What else has flourished over the year is the hardware and software infrastructure for IoT. From DIY kits and credit card-sized PCs to cloud platforms for smart homes and enterprises, IoT developers today have a wide choice of tools and solutions. We’ve done some work to structure and present all kinds of things an IoT developer needs for work over the year, including operating systems, frameworks, visualization tools, middleware and M2M communication solutions.

However, the variety of devices, services, and standards, some of which were put together rather hastily, brings security concerns, which could be among the biggest obstacles for the development of IoT in the future.

The issues include not only communication protocols, but also the hardware. In its “Internet of Things research study,” HP concluded that 80 percent of the commonly used IoT devices raised privacy concerns, while “six out of 10 devices that provide user interfaces were vulnerable to a range of issues such as persistent XSS and weak credentials.”

In another recent IoT report, Verizon encourages IoT developers to “address these privacy concerns and be prepared for changes in data protection regulation.”

It also gave a comprehensive advice on how to think of the security right way:

  • Build security in from the start of the initiative.
  • Evaluate the specific threats facing your application. The risks associated with a wearable fitness band are different to those facing a smart grid.
  • Authenticate and authorize connections; verify both identity and access rights.
  • Provide appropriate security for data transfers.
  • Consider the user experience. If security measures — such as passwords — become cumbersome, users will either circumvent them or avoid using the IoT service entirely.
  • Reduce data risk, particularly with regard to personal data.
  • Plan for what to do if something goes wrong. Understand that compromise will happen, and plan a workflow for getting compromised credentials out of the system.
  • Communicate about security and privacy. Educate employees, partners, and customers about what you’re doing to protect them, particularly if sensitive data is at risk.


When asked what does the future hold for the Internet of Things (also known as the Internet of Everything), all analysts agree on the point that it’s going to develop even faster in 2016 and won’t stop until at least 2020.

Talking about more detailed forecasting, Flexera Software’s Steve Schmidt put together a nice set of predictions:

  • Stories on IoT platforms being hacked will make headlines more often, putting more pressure on developers to improve security.
  • Manufacturers of IoT hardware will have to start thinking and acting more like software companies, leveraging the software applications they build into their products as a driver to reduce manufacturing costs, increase product innovation, and capture new revenue streams.
  • Rise in the Internet of Things device market will fuel the Third Industrial Revolution.
  • IoT will transform objects into services. As IoT manufacturers seek ways to deepen their relationships with customers, a key goal will to become more strategic and provide ongoing solutions tailored to evolving customer needs. Services will be a critical element to selling solutions. For instance, medical device makers will be able to use big-data to provide better diagnostics based on segmenting national, socio-economic or ethnic characteristics of an overall population pool.

To sum things up, now seems to be the right time for developers to dive in the Internet of Things, as this industry isn’t hyped – it’s really smoking hot and will keep growing in the foreseeable future.