Rising importance of Unlicensed Networks in IoT
Gartner predicts 6.4Bn connected things around us by the end of 2016, a 30% y-o-y increase from the previous year. This clearly shows that things have already crossed the human population on Earth to connect to the Internet and will continue doing so with around 50Bn connections to be reached by 2020 (predicted 50bn devices). As the scope of connected things around, from manhole covers to pet trackers keeps growing, we need to look at what really is driving this growth in the IoT Value Chain.
For billions of devices to communicate, there are two basic aspects
1. They need to be wirelessly connected.
2. Secure transmission of data.
Both these aspects are dependent on the underlying network infrastructure and modules connecting them.
How are the devices currently connected and trends
The current IoT Ecosystem sees a wide range of IoT Communication Technologies majorly summed up as below:
The network connectivity choice for any IoT application is highly dependent on the nature of application. However, the IoT ecosystem seems to be converging more towards relying on the Unlicensed and Mesh Networks. Since the beginning of 2015, the Unlicensed Network Providers have seen the most funding among the Network Providers, of around $300M which covers a major chunk of 65%. This is followed by funding worth $145M to the the Mesh Network Providers, that uses the unlicensed WiFi networks and device modules. While the Licensed Network providers saw a funding of $28M last year.
The Unlicensed network providers have seen some major players coming up through their Open Standard technology and Partnerships with the IOT device providers, OEMs, etc. Sigfox already claims to have grown its network in over 20 countries and continues to connect devices through its cloud. It has been named the most promising IOT network provider by Frost & Sullivan. (Link). While, the LoRa alliance which marked coverage to the 100th US city a few weeks back (Link) has a big sponsor list including members like Orange, Cisco, STMicroelectronics, IBM, Semtech and many others.
What does the difference between Licensed and Unlicensed Network mean to IOT Devices and Applications
The foremost reason, which explains the increase in unlicensed network providers for IOT over licensed network providers is the cost issue. The unlicensed networks like Sigfox and LoRa alliance in the Low Power Wide Area Network (LPWAN) are gaining more popularity due their lower data rates and easier scalability which leads to a lower barrier to entry as more machines and things begin to communicate, which is not the case with licensed and cellular data network providers (Link).
Secondly, the functionalities essential to IOT can be more easily provided by Unlicensed Networks like better network coverage For instance, an application like Earthquake detection can require coverage at remote locations where telecom network might not be available at all or might be too costly to set up. Similarly, a mesh network also solves the problem of network dead zones with better interconnectivity between the device nodes in a mesh network than relying on a single network source.
Another factor which makes the unlicensed network take an edge is the battery consumption of the device. IOT Applications require technology running on low battery like GPS-enabled devices for applications like real-time remote tracking (Link)
Moreover the fact that IOT device require networks majorly for data communication which are different from telecom cellular network providers which use Licensed Networks. IOT finds its applications centering around data — collection, monitoring, exchange, etc from different devices following different communication protocols. Also, there is a need for network which is protocol and standard agnostic and enables devices to communicate without any technology barrier. Silver Spring Networks, one of the largest players in IOT networks has grown through its open standards and hardware independent technology as it has expanded its network across geographies for smart grid applications with over 22 million connected devices.
These reasons do explain why the Japanese based Soracom, a Mobile-based Virtual Network Operator for 3G and LTE which is one of the highest funded company among the Licensed Network Providers itself has ventured out to the Unlicensed Category by becoming a member of LoRaWAN just a few days back — (Link) It will only be interesting to know how the big players in the licensed and cellular network area modify their technology strategy to continue in the IOT party, as it looks so by the recent launch of NarrowBand NB-IOT, a LPWA Technology (Link) by Vodafone and Huwaei.
- Frost & Sullivan’s recent paper on autonomous device network challenges the common central layer as is the case of internet network.
2. The IoT Value Chain
Objects -> Connectivity Modules -> Underlying Connectivity Network -> Cloud -> Applications