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Internet Service Providers early winners in IoT gateway

By Shannon Williams, Mon 10 Aug 2015
FYI, this story is more than a year old

As the number of smart connected homes is expected to increase rapidly, with internet service providers deemed to be the early winners in what is being called the battle for the Internet of Things Home Gateway. 

According to Gartner, the hype surrounding the IoT in the home is growing quickly, as the battle for the IoT gateway in the connected home gets underway. 

Paul O'Donovan, principal research analyst at Gartner, says as home appliances have increased in smartness, cellular and cable connections improved, and pricing declined, the desire or ability to monitor and control the home as a holistic platform of devices and appliances has emerged. 

"Many IoT applications are triggered by sensors and need data management, but there is no single IoT gateway to the home," O'Donovan says.

"As Internet-connected homes become increasingly smarter, the gateway is becoming the centre for connecting the different devices and home appliances to make the management of the ecosystem happen,” he explains. 

O'Donovan says the home IoT gateway market is expanding rapidly, and the number of smart connected homes is expected to grow from between 100 million and 200 million homes now to between 500 million and 700 million homes by 2020. 

The lack of a good business model or the immaturity of home IoT products has not stopped gateway makers from trying to develop the market to grab share in the home IoT opportunity, he explains. “Cable companies, internet companies, alarm companies and mobile phone operating system providers are actively creating platforms and ecosystems in an attempt to break into the market,” says O'Donovan.

Gartner predicts that the most successful home gateway provider will develop a system that seamlessly integrates with nearly any vendor's IoT application and is relatively painless to the homeowner. “A system that locks homeowners into one specific operating system limits their opportunity, as consumers will want to exercise their preference in terms of the IoT products they choose,” O'Donovan says. 

O'Donovan says multiple home platforms have emerged, designed to capitalise on or create an ecosystem of smart home things that the gateway must connect to. “Some of the platforms are beginning to open up, or at least work with the others to minimise the different number of platforms that the consumer and the gateway must deal with,” he explains. “Some smart home solutions are even taking advantage of this void and creating hubs that act as a central command system for the smart home devices, using multiple communication protocols to connect to all of the smart devices in the home and communicate to the world through the IoT gateway.”

O'Donovan says, "As the IoT gateway market emerges, ISPs will be the early winners in the battle for the home gateway, provided they develop solutions or partner with hub manufacturers.

“The mobile phone providers will gain a smaller part of this market, but ultimately the cellular model will not have enough bandwidth to compete with the ISP solution,” he states. 

“Longer term, there will need to be an integrated device, whereby the gateway is also the hub, or integrated hub and gateway solutions will be needed."

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