Interested in connecting with Matt Hatton? Reach out to him on Linkedin!

About Transforma Insights:

Transforma Insights is a research firm focused on the world of IoT, AI and Digital Transformation (DX). Led by seasoned technology industry analysts we provide advice, recommendations and decision support tools for organizations seeking to understand how new technologies will change the markets in which they operate.

Key Questions and Topics from this Episode:

(01:42) Introduction to Matt Hatton and Transforma Insights

(04:12) Current IoT landscape

(08:32) COVID-19’s effect on IoT

(13:44) IoT connectivity landscape

(18:38) How companies are thinking about IoT

(27:02) Off-the-shelf versus customization

(38:50) Best practices for IoT adoption

(41:32) Predictions for IoT in 2022

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Transcript:

– [Voice Over] You are listening to the IoT For All Media Network.

– [Ryan] Hello everyone and welcome to another episode of the IoT For All Podcast, I’m your host Ryan Chacon. And on today’s episode we have Matt Hatton, one of the founding partners of Transforma Insights. Matt has actually been a guest before, he comes on to talk a lot about very high level predictions, trends, market kind of insights that he’s seen. Transforma Insights for those who may be unfamiliar is a firm focused on helping advise companies on IoT, AI digital transformation and alike. So we’re gonna talk a lot about the current state of the IoT market digital transformation market where we kinda see it going, biggest contributors to the success of the industry. You talk about the connectivity landscape a good bit, how that’s playing a role. We’re also talking about how people are making buying decisions. They’re kinda leaning more towards going towards platform companies now, which is interesting to talk about. And at the same time we’re gonna discuss off-shelf solutions kind of the benefits there, as well as how that compares to other types of buying offerings or getting into the customization side of things and so forth. And then we wrap up by talking high level about some adoption best practices. So the insights and trends and knowledge that Matt comes on here to share is fantastic. And I promise you won’t wanna miss this one. But before we get into this episode, if any of you out there are looking to enter the fast growing and profitable IoT market, but don’t know where to start, check out our sponsor Leverege. Leverege’s IoT solutions development platform provides everything you need to create turnkey IoT products that you can white label and resell under your own brand. To learn more, go to iotchangeseverything.com. That’s iotchangeseverything.com. And without further ado, please enjoy this episode of the IoT For All Podcast. Welcome Matt, back to the IoT For All show, thanks for being here again.

– [Matt] Thanks Ryan, my pleasure.

– [Ryan] Yeah, it’s fantastic to have you. There’s a lot of interesting things going on over at Transforma that I wanted to dive into and you’ve been putting out some great content that I thought would make a fantastic podcast for our audience. And I’m sure there’s sober audience out there who may be a little unfamiliar and I’d love it if you could start off by just giving a quick intro and some background on yourself as well as the company.

– [Matt] Yeah, absolutely. And anyone who’s not familiar with us, they will be forgiven. We’re only about two and a little bit years old. So we’re something of a child of the lockdown. We kicked off things in November, 2019. So we only had about three or four months before the whole world shut down and nobody was able to go anywhere. So we found a little bit tricky getting the message out in a face-to-face kind of a way. So we’ve done what we can to get it out there in a virtual way with some of the work that we do. Transforma Insights we’re industry analyst firm focused on what we term digital transformation, it’s a bit of a catch-all term. Now, a bit of an umbrella for a whole bunch of disruptive technologies. First and foremost of which is Internet of Things. But we also cover things like AI, robotic process automation, blockchain, a bunch of other things that enterprises might be considering using to change the way that they do business. So we work with companies that adopt new technologies and also companies that sell new technologies. But right on that edge of that disruptive space really that’s where the focus is.

– [Ryan] And would you mind sharing a little bit about your background experience kinda how you got there?

– [Matt] Yeah, absolutely. We founded, myself and Jim Morrish, we were the founders of Transforma Insights. We actually founded another analyst firm previously. So back in 2011, he and I founded Machina Research which was an IoT focused specifically, just IoT focused on this firm, which we sold to Gartner in 2016. We did a little bit of time working with Gartner a few other things in between, and then came back with Transforma Insights. Prior to that, I’d been an analyst for about 25, well, altogether about 25 years.

– [Ryan] Okay.

– [Matt] Just a little bit of time working for mobile operators, but mostly as an industry analyst.

– [Ryan] Fantastic, so I guess a good question to kind of start this out is just from a high level perspective, how are you viewing the IoT market? Like what’s the current market look like right now in your all’s eyes? What are you most interested in? Where are the big trends? What are you optimistic about? Maybe what concerns do you have just kind of, what are you seeing at a high level of the market in general?

– [Matt] I think it’s a market that’s somewhat dominated by the lockdown to an extent. It’s certainly had an impact on a lot of areas in terms of the verticals that are adopting. So we’re seeing a lot of movement in smart buildings. For instance, okay, you got to cope with lockdown. So the smart building starts looking very interesting. Healthcare related things, industrial, a lot of moves towards on-shoring. So that’s on-showing your production I mean. And as a result, it’s driving some growth, quite significant growth in all of those areas. But I think we’d say it was pretty robust, 2020 was a bit of a challenging year. You had challenges with, it was more supply issue rather than demand issue though, actually. But as we got through 2021, a lot of those got resolved and things started to look a little bit more positive. Thinking at a more macro level, I’d say it’s in a pretty healthy state at the moment. We’ve had a lot of changing dynamics going on in the market. We’ll talk about those a little bit. I think a lot of that comes out from the survey work that we did recently. We can go into that in a little bit. But we’ve got some interesting changing dynamics in terms of things like growth of edge computing. Where are you gonna put the processing? Where does that reside? Where is the intelligence of the IoT devices and that kind of overlapping between IoT and AI. IoT moves into automation and automation moves into something that requires a little bit more intelligence. There’s you know, quite a lot of sophistication happening in there. You’ve got increasing interest from the hyper-scalers. So I see AWS and Microsoft looming large over this space. It’s a very interesting trend in the space and certainly one that we’d expect to carry on into the next few years. So those two particularly less so Google. But certainly I agree as Microsoft looking like they’re gonna be tearing up some trees. A lot of, not more productization, we’ll talk about this in a bit as well. So on platformization. So these sets of tools that have become available over about the last decade, starting to really make some sense and drive out a lot of the complexity in deploying IoT for pretty much every enterprise. I talk about it in the context of, I talk about it as something called thin IoT, is how I describe it. You’ve got these layers, you’ve got hardware layer and you’ve got software and you got middleware on the device and you’ve got all these various different layers. And gradually over the last decade or so, we’ve seen a simplification of each of those layers, either driving out a complexity or the introduction of some new technology which is more appropriate for deploying IoT and helping with it operating constraint environment. So that might be a device OS that’s got a really small footprint or it might be things like eSIM for embedding the SIM or actually specifically eSIM, putting the SIM as a component on the device. Or it might be networks, it might be a variety of mesh networks or whatever. But across the board, across that stack, that thin IoT stack seeing the simplification really pretty much permeating through the whole of it. So I think we’re in pretty healthy shape. If the lockdown hadn’t turned up then maybe we’d be even healthier shape.

– [Ryan] Yeah, we’ve seen similar things where a lot of the use case demand has definitely shifted due to COVID. 2020 was interesting because I felt like there was a lot of uncertainty in a lot of companies minds. So projects were being slowed down or halted or kinda pushed off. But as people start to understand the pandemic and what was going to happen and kind of the future outlook was like, they seem to get back into the groove of those IoT projects, because I mean not the premise of what these products are trying to do would help them be more efficient in case they had labor shortages or they had to change their resource allocation or something along those lines. These were important, these were kind of top of mind things for these companies, but until they understood what was happening with their finances, it was something they wanted to kind of just put on hold, but it was good to see that that kinda came back in 2021. And I think that’s really gonna project us forward in 2022 in a very positive direction with a lot of new industries being involved and really considering IoT that maybe were before.

– [Matt] Yeah, it’s certainly something that we’ve seen. But one of the things that we do is ultra granular IoT market forecast. And so we dig into all of the various different use cases in IoT. And when you take something like smart metering or 2020, those countries where there was an ongoing, smart metering deployment for 2020 was a year when that more or less slowed down stopped. No I think probably because of what you’re talking about, which is absolutely right where there was some uncertainty. But just getting the right people in the right place and the supply chain related issues with getting your hardware into place, having the teams available to go and do the work. So that was obviously challenging. But you’re right about people just sort of took a breath and said, “Hey, this is probably the first time that most of us have experienced anything approaching this sort of level of pandemic. We don’t know what’s gonna happen.” Let’s sit tight and then the realization was, hang on a minute. For many people this could be pretty good for business and you know, not wanting to be too mercenary about it, but it’s been pretty good for business in some cases. Anybody serving the automotive industry, not so much, ’cause that had its struggles. People weren’t buying new cars and so on. But anybody addressing things like healthcare or smart buildings, some of those other sectors that I mentioned earlier, very positive kind of a spike on what they were doing. The tech sector, I’m happy I work in the tech sector. Right. There’s a lot worse sectors to have had to sit out the lockdown as part of hospitality and so on. Pretty challenging.

– [Ryan] Yeah, I mean and the hope is that the technology industry kind of helps propel us forward out of this, as well as set us up to handle this better if this happens again. And I think that’s where a lot of these IoT use cases with contact tracing and the smart, implementing new solutions within buildings and workplaces is something that we weren’t really thinking about as a priority two years ago, right? So, it definitely shifted the conversation on what use cases are important and also what use cases were even possible. Because again this wasn’t something that we’ve really had to deal with as a society while these technologies have been around.

– [Matt] And another one to throw in that there’s a possibility it’s been relatively short term, a couple of years in the grand scheme of history might have changed some human behavior. Well, there’s certainly been an urban to rural migration that seems to be the case has been a flight out of the cities and towards the suburbs, or even towards rural areas. And so for cities need to look at how do we make life in the city better? How can we use technology to improve the experience of living in a city to either stim that or maybe reverse the trend? And the same thing is also true in buildings, okay? Almost everybody has gone to some extent to working from home. Now, I’ve been working from home for more or less the last 10 years. So it’s made pretty much no difference to me whatsoever, but for a lot of people, it’s been quite a fundamental change. And building owners, maybe they’ve got a communications or a PR job to do to get people to go back into the office store, to want to go back into the office. And so it’s incumbent from them on facilities managers or commercial building owners to make this environment so nice that you wouldn’t wanna work from home. You wanna go work in the office and that’s gonna be about using technology. So there’s some potential high points coming up as well I’d say with those kinds of requirements.

– [Ryan] Absolutely, those are all fantastic points. I wanted to kind of shift a little bit away from kind of the high level just market discussion real quick and talk a little bit about the connectivity landscape. I’ve been having a lot of conversations through other podcast episodes about the connectivity landscape and kind of what’s happening in that space. From your perspective, what are you seeing there? Like are there any kind of key trends on the connectivity side of things? Where do you see the opportunity? What is the kind of future look like? And let’s generally just get started there around connectivity.

– [Matt] Yeah, there’s a lot of really interesting stuff happening at the moment, actually. We’ve got the likes of well to start furthest out and then work in. You know, satellites. There’s always been some use of satellite for IoT, but rarely it’s been about high value items in really remote places and it didn’t really troubled the market too much. There were a couple of specialist players, but it hasn’t been a huge bit of the market. But then you’ve got now dozens of companies who have launched or in the process of launching these networks of satellites with the hope that they’ll be able to use those for connecting IoT devices. I’m gonna reserve judgment on those and say, it’s always gonna be cheaper to connect things using a terrestrial network. And therefore there’s still always gonna be fighting out for those market segments which are that bit more remote. I mean, there might be some opportunities so say with agriculture and mining and transportation and so on. But it’s a bit challenging that space. Moving a little closer to home, the interesting dynamics are around some technologies which have been available for a little while but really starting to have an impact or starting to be understood for what they are. And that’s firstly 5G. So bit of an interesting one 5G. I mean, obviously long-term the direction of travel is towards okay, well, everything will be 5G networks. But for IoT, the big capabilities around ultra low latency and high bandwidth useful for few use cases, but it’s being able to support millions of devices. It’s that massive machine type communication capability, that’s the interesting one. When you’ve got the NB-IoT and LTE-M technologies that are starting to actually become somewhat mature. We’re still kind of on the cusp of the seeing really significant mass market adoption and understanding how that works, data with the competitor which is LoRa, which historically was deployed as private networks, but is increasingly being deployed as public networks, national public networks. So there’s some really interesting tools becoming made available for anybody who’s thinking about, okay, well, which access technology should I be using? What’s the most appropriate for me? In fact, I mentioned about this thin IoT stack, the connectivity piece is absolutely one of those and we include in that thing by those low power wide area technologies, I was talking about the NB-IoT and LTE-M, which sit under the 5G umbrella and thinking about LoRa, but particularly those three, I think. And we starting to see some of that really come through. Other things to watch eSIM, starting to get some traction now. But mostly from the virtual network operators, they seem to be the ones who are really able to embrace it, ’cause I think there’s a mentality issue. They’re very used to this idea of having commercial relationships with multiple operators and switching and connection between them and turning a connection that’s one network to a connection that’s on another network.

– That’s bread and butter for.

– For the mobile network operators, less so, and it’s taken them a little bit longer to adapt and kinda understand what this opportunity that might be presented by eSIM. So, I mean, that’s just a few things I could ramble on for hours about this stuff. I know, the connectivity space is a big one for us and one that we focus a lot of our attention.

– [Ryan] Let me also ask you this ’cause this kind of connects to I think a recent article you put out, I don’t know if it was connected to report or it was just an article itself. But it was talking around how companies, and these are more from like the buyer side the companies that are looking to adopt IoT, how they’re thinking about IoT connectivity. And it sounded like they’re thinking of it more as a feature in this context. And I wanted to see if you could expand on kind of what that means and articulated in a way that our audience could really understand how that’s changed from where it was before and why it’s so important.

– [Matt] Yeah, absolutely. A little bit of context for this. So this is from a blog post that I wrote, which was based on a report that we put together for Oracle. And that was based on a survey that we did, a survey of 800 enterprise IoT adopters. Some relatively experienced IoT users. It was interesting to talk to these companies that have implemented IoT and understand about how to integrate it with back-office systems. So we spoke to these 800 companies to understand what their approaches to IoT, well, what their experiences of deploying IoT work. And so we also, obviously, it was a survey. We asked a bunch of questions that kind of goes without saying with surveys. But a lot of it was around this connectivity landscape. And one thing we asked was around some of the costs associated with deploying IoT and connectivity came out, it was the lowest cost concern. At least the lowest cost concern might not necessarily be the lowest cost, but it’s the bit of the equation that’s causing the least worry. So, you almost get to the point where that connectivity price isn’t the stumbling block isn’t the challenge. That was one interesting point. We then asked about, okay, how do you prefer to buy your connectivity? Do you want it bundled in with the solution that whoever your solution provider is giving to you? And that might be for any number of users. This might be a smart meter use case where it might be enterprise resource planning use cases, there are a whole bunch of different use cases across six or eight verticals. And 24% said they wanted that connectivity to be completely bundled. They don’t wanna see the connectivity. They don’t wanna have to even think about the connectivity, they just expect it to be bundled as part of the solution. And then another 23% said, “Yeah, I know I kind of wanna see what it is, but I’m not really that bothered about having any control over it.” So, altogether you’ve got almost 50% of companies that have said, more or less, the connectivity, I’ll let somebody else take care of the connectivity piece of it. And historically that would have been quite a significant part of the equation if you were putting together an IoT solution, you’d say, okay, well, I’m gonna have to go to these guys and buy my connectivity, and I’m gonna have to go to these other guys over here and buy my hardware. And then I’m gonna have to either develop some software or get a systems integrator in to do it, or use an existing IoT platform of some sort. But some of those component parts are kind of being subsumed into these more complete offerings from other players. And the final question that we asked about this topic was about… We asked about a bunch of things to say, okay, what do you want in an IoT solution? What’s your preference? What kind of things should your solution provider be working on to make your IoT solution as good as it possibly can be? And 43% picked as one of their top three that the connectivity should come baked in. So it’s just moving in that quite firmly in that direction of the connectivity not being a separate component part that for about half of solutions that enterprises are buying. But I think this is also moving in the direction of another interesting finding from the survey, which was that, a lot of the single most popular vendor. So we asked these enterprises, who would you go to? Who’s your vendor of choice, or what type of company is your vendor of choice? Who would your go to for IoT? And we asked about the top three and the highest ranked in there was IoT platform providers. Some like the PTC or Microsoft or these various other companies. And the implication of all of this is that more of the functionality, more of the capabilities kinda being baked in and readily accessible and easily deployed. You know, historically we would have said, who’s the first choice of enterprises for who to go to when they’re deploying IoT? It’s systems integrators. That’s number one choice. It’s always number one choice. Historically, when we did surveys, it was always SI. Because a lot of these projects are quite complicated, you’ve got, a lot of things to plug into a lot of other things. But that came, I won’t say a distant second, but certainly second. So that was 42% of the respondents picked SI as one of their top three. So quite a ways behind the platform players. And just anecdotally, this is something that the systems integrators have been struggling with a bit. Is this increasing productization, these products suites from the likes of say a Microsoft or an IBM that can be put in front of a client and that client just take that product rather than needing serious heavy lifting to build something from scratch. So we’ve kinda seen a tipping over into this more prototypes space. I mean, it’s continuation of a theme. We’ve always seen this platformization, this idea of simplifying the process by introducing these common platforms. But this seems to be taking it just that step even further where you’re going more and more in the direction of having a product rather than a service or consulting based approach.

– [Ryan] Right and I think that a large part of that from what I’ve seen is that platforms and by whatever we wanna consider a platform company, they are evolving. So they’re not just focused on providing you a tool for you to figure out how to use. A system integrator comes in and figures out how to use and build on top of. These platforms are evolving to have to take out a lot of the heavy lifting, integrate with your, whether it’s your legacy systems, things through API through your own, that you already have running in your business, whether it’s how they integrate with new hardware, how it integrates with connectivity, all the different pieces more easily. It just becomes kind of assumed that’s how it’s going to work. So these platform I think are being more sophisticated are handling all those pieces that you needed somebody else like an SI, or with a platform company to come in and help you put it all together. But this is all now becoming, they’re realizing that complexity and fragmentation in IoT was hurting adoption. And as the platform component, if we can build other pieces more easily into what we’re doing to make those integrations more easy then we are going to make adoption easier for our potential customers to then be able to provide them something that is more kind of productized. Which I think also brings us to a point of a conversation, which is good to chat about is, kind of the perception of what off-the-shelf means in IoT, as it relates to how the customization element, ’cause for as long as you can think about IoT solutions for customized, right? They’re built for specific use case, specific end user, et cetera. How are you all seeing kind of that balance shift? And I’d be interested to hear what off-the-shelf really means in your, or you’re seeing mean in the industry, as well as how that plays into the role customization is playing in application development and probably will play going forward.

– [Ryan] That’s a really interesting question. How do we see off-the-shelf? Well, let me preface that by saying about, based on the survey we did ask about, okay. Do you want an off-the-shelf solution or do you want somebody to come in and build this for you? And about 2/3 of respondents said, we want this off-the-shelf, right. But then there’s an element of, they would say that wouldn’t they? Because the implication of off-the-shelf it’s much easier. It was cheaper, right? It just is. But I think that’s following the market, right? What you were saying earlier was absolutely right. We are seeing the platform companies kinda raising their game, or moving deeper into the value chain if you like. But there is a limit to how far they can go to my mind. So you look at somebody like Microsoft. Microsoft introduced these industry-focused sets of solutions, the idea being they’re still gonna keep shy of actually doing consulting, right? They’ll do it a little bit just to prove the use case or to test the waters for a particular solution. But ultimately what they wanna do is they want a replicable product offering, which is gonna be fine for certain clients, right? Somebody wants something that isn’t bespoke by almost by definition, well- Absolutely my definition, which is fine maybe if you’re a challenger. If you’re a smaller player. You’re someone who needs to keep your costs low, and you don’t mind so much that you’re putting all your eggs in one basket by committing to somebody as a supplier, and also happy that if the solution isn’t gonna be exactly what you need, but it’s gonna be 95% of the way there. And therefore you can get maybe a leg up against the competition who are probably bigger than you, and probably develop this stuff customized and in-house, and that will be slow moving. It’ll cost them more money, but ultimately they’ll probably get something that’s that 5% better. And the question is, in your market, is 5% better actually give you a significant leg up versus the competition. In some markets I’m sure it does because if you’re tight margins then it probably makes a whole lot of difference. So retail may be your financial services, maybe it does make a bit, a lot of difference. So it’s gonna be very specific to the verticals, I think the extent to which it has an impact. But I think it’s not so much that it’s a binary state either you’re taking off-the-shelf solution or you’re taking a customized solution. It’s a question of degree. And what we’re seeing is the degree of having something off-the-shelf, something it’s an existing product is increasing.

– [Ryan] I completely agree. I think the way I’ve kind of thought about it is as these platform companies and become more raising their game like you were saying, they’re able to build a lot of the necessary components for kind of that application layer for a particular use case to be in a sense off-the-shelf. But then there’s that customization layer that goes kind of on top of it to make it exactly what a particular end user or company would need for their business. But by doing all of that stuff early on, building your libraries of tools, libraries of different components that you can easily kind of plug and play into building something that feels off-the-shelf before you get into the customization piece, which then brings down I think the cost of the customization so people aren’t scared off when they hear customization they think high costs anymore. I think all of that are things that are contributing to more likely adoption across different industries and use cases. I think you’re gonna start to see a lot of platform companies focus a bit more into a particular use case. They’ve been more domain expertise in and also have maybe all the moving pieces already in place. They just need to put them together and slap a little customization onto it to make it perfect. I think if you could start to do that and make it feel the experience feel less complex than IoT has felt over the years, and with stuff we talked about before having the connectivity baked in, having hardware already pre-integrated or the selection of hardware pre-integrated into your system. All those different pieces you make it easier so the end user when they buy it, the feel, even though it may not be this way, but the feel is that it’s more turnkey, it’s more off-the-shelf with that little bit of, customization on to it. I think you’re gonna see people not only adopt but understand IoT a bit better. Understand the value of IoT a bit better as to how it applies to them as opposed to trying to push a platform and saying, hey, you can use this platform to build anything. It’s kind of like, well, we don’t even know how IoT can benefit us yet. Can you tell us a little bit more specifically of what these use cases are in applications for my business specifically? Because I only care about that. I don’t care about all these different capabilities, all these technology things, I care about does this do what I need for my individual business so I can go back to worry about my business.

– [Matt] Yeah, I think our expectation has been for the last few years that these things verticalize a little bit. The market verticalizes a little bit. Because ultimately, yes. If you talk to pretty much any IoT vendor and say, can you do X? The answer will be, yes, we can. If you’d ask them, have you done X? Well, probably the response is in many cases will be slightly different. And we would tend to encourage adopters to look for companies that have got experience in the vertical in which they operate, right? You don’t want your supplier to be doing their learning on your time. You want somebody who’s got expertise in this area already. Which naturally means that, okay, if I’ve built a lot of expertise in the industrial sector, well, people are gonna keep coming back to me for things relating to the industrial sector. And you get this kind of virtuous circle within those verticals. That means that certain vendors would tend to gravitate towards certain vertical sectors, in part because they might have some specific capabilities that are particularly focused on those areas, but maybe a lot of the time just because they happen to have built up their expertise in those areas. I mean, I’ll give you a good example, not an IoT example but robotic process automation. So automating some manual PC-based tasks, it might be sending invoices out or processing spreadsheets and taking data out of one spreadsheet and putting it into another spreadsheet, right? 95% of it is probably common across all of the RPA vendors, they do pretty much the same sort of stuff. But there’s also some specific stuff for understanding what an invoice is and what the nuances are of invoicing companies and receiving and sending of invoices. And if you can get to grips with those better than others, then you probably migrating better in the direction of addressing those kinds of verticals, rather than I don’t know, legal or some other. And I think we see that in IoT to a certain extent. We certainly see it in what we term data exchange. So there’s this idea of having these multi-tenanted platforms which will effectively ingest data from multiple sources and make it available to third parties on a commercial basis. There’s a number of different ways in which can work, but that’s a sense of fear. And the expectation is, you get a critical mass, you build a critical mass in one area, you win a contract in healthcare, well, then the other people who were in the healthcare space are gonna say, oh well, those guys have got, good at handling healthcare data, we’ll work with them. And you naturally get this sort of snow snowball effect That cuts across IoT, to a certain extent. I mean, I don’t think we’ll be completely cut and dry, but I think we’ll start seeing some emerging trends like that.

– [Ryan] Yeah, I think we’ll start to also see some consolidation around the industry, as we start to find or companies start to really focus their offerings around certain use cases or applications, and really carve out that niche for themselves and kind of take a leadership stake there. I think it would be harder for other companies who are taking a more broader approach to say, hey, we have a platform that does everything. To get into those when you’re comparing them, like you’re saying to somebody who has domain expertise, as well as experience building for this or something that’s already more ready to go that helps bring down cost, time to market all those kinds of benefits. I think all of that combined allows those companies to really have a leg up in these kinds of conversations.

– [Matt] I think that’s generally right. I think the one cloud on the horizon is maybe the fact that there’s so much VCM, private equity money chasing so many companies. It kind of mitigates against and M&A that’s based on the, you know, a reasonable valuation of the company or the valuation of the company within another company. But rather it’s predicated on this is a potential unicorn. It could be worth 20x what we’re investing in it at the moment. And so we’re seeing this across quite a few sectors, there’s over valuation of companies in the IoT space. Not to say that companies in the IoT space aren’t valuable, but we’re saying valuations are probably double comparably what we might’ve seen five years ago. And that’s crazy if what you’re looking at is the long-term run rate and what you might expect to make off that organization if you brought it into a bigger organization. So I agree that what you were talking about should be the trend, but I think there’s kind of that cloud on the horizon.

– [Ryan] Yeah, I’m definitely interested to kind of see how that injection of funding kind of influences not just evaluations of companies, but kind of the direction of the market in general. So that’ll be very interesting to see. As we wrap up here, I have two kind of just final questions to quickly get through. One is, from what everything that you’ve seen, what are some of the kind of high level best practices for IoT adoption from your perspective? Which is definitely a different perspective than a lot of the companies I’ve spoken to before. So I wanted to kind of get your thoughts on that. And then I wanted to wrap up by just asking what kind of projections you have for the future of the market kind of going forward? But let’s start with that adoption best practices, just a couple points that you think are important for people to be considering as they’re, looking into adopting IoT.

– [Matt] Yeah, I mean, there’s a whole bunch. But in fact we ran a webinar back last year. That was, so I recommend taking a look at that. But it’s things like the, well, I talked about vendor selection. That’s a good one for picking who your suppliers are gonna be. Look for companies that have done the kind of thing that you want to do. That’s one. Another is, don’t underestimate the internal changes that might be necessary. We think about IoT and there’s sort of two elements of IoT or two types of IoT deployments. One is kind of not nice to have cost cutting does some useful stuff on the side. That’s not gonna be particularly transformational for the organization, but it’s useful to do. But what we’re seeing, and in fact, this came out from the survey was a bit more of a shift towards the rather more transformational approach. So things like, okay, if you’re tracking pallets, say, well, tracking pallets is useful just to make sure you’re not spending too much on pallets and you can find your pallets when you need them, but it’s not gonna, not gonna change the business. But if you’re a manufacturer of a piece of heavy equipment and you decide actually I wanna switch from selling this to sending it as a service or providing as a service using IoT, connecting the device and charge rate per whatever, per tons of potatoes sorted, per kilometer of whatever delivered, that kind of thing. And if you’re taking the latter approach which more and more companies are, it’s gonna be transformational for everything that you do. Your finance is gonna change, your operations are gonna change, all of those kinds of things. And so being aware of that and having a change management plan is absolutely critical. And there’s just a couple, I mean, I could rattle on.

– [Ryan] Sure, sure, that’s fantastic.

– [Matt] One things we’d advise

– [Ryan] Yeah, we can refer people to the webinars as well, and just other content you’ll put out, which is always fantastic. The last thing I wanted to ask, just kind of, what are your thoughts going forward in 2022? I know we kind of briefly touched on kinda where we are now, where we’ve come from over the last couple of years and slightly where we’re going, but, just to kind of sum it up in your minds, where do you see IoT going in 2022?

– [Matt] It’s gonna be a bumpy year. I think. We’ve got, well, okay. It’s very difficult to predict what’s gonna happen with coronavirus and so on. But it does seem like things are taking a turn for the better. And there’s quite a lot of pent up demand. We saw demand depressed in 2020. It’s rebounded somewhat in 2021, but I think there was still room for improvement. But I think as things opened up even more in 2022, I expect it to be a strong year. I mentioned about these thin IoT stack and getting all of those capabilities in place. And it feels like that’s in a strong position. You’ve got things like AWS and Microsoft taking this space much, much more seriously, really, okay. Regardless of what I think the fact that those guys have now decided, okay, this is mature enough as a space. This isn’t, we’re not at the bleeding edge anymore. This is a mature space, and this is worth our while getting into an understanding. I think that’s a pretty good indicator that 2022 is looking strong, Not without its challenges though. I mean things like you’ve got a lot on the connectivity side of things, we talk about connectivity a lot, but on the continuity side of things, you’ve got a lot of price pressure. We’d talk historically about $1 per month for connecting a device to cellular and that’s heading in the direction of a dollar per year. So you’ve got those kinds of challenges associated with the market. But I think in terms from the enterprise standpoint, from anybody who’s adopting, well, the array of tools that’s available is fantastic now, and really does simplify the process of getting this stuff deployed.

– [Ryan] That’s fantastic. Matt, this has been a great conversation. I really appreciate your time again.

– [Matt] Thank you, Ryan.

– [Ryan] We’ll have to make this more of a regular occurrence because the insights you all share are great. The articles you have written are fantastic and the reports you guys put out are very valuable. So how can our audience learn more about Transforma Insights, kind of read the content, follow along with kind of everything you’re putting out. ‘Cause this is not a plug in any way outside of just the fact that I, and many people I know find a lot of value in what you guys put out in the market.

– [Matt] Absolutely, you can find this on our website, Transforma Insights, that’s Transforma with an ‘a’ rather than ‘er’, transformainsights.com.

– [Matt] Or you can follow us on Twitter @transformatweet And you pretty much find whatever you need there. I’d recommend taking a look at the blog. So a lot of the stuff that we’ve been talking about, they probably pretty much all of what we’ve been talking about today is available on the blog. We’ve also got a free level of access to our site where you can get access to white papers and webinars and so on.

– [Ryan] Great.

– [Matt] That’s all on there, so sign up there.

– [Ryan] Fantastic, well, Matt, thanks again so much for your time and appreciate it, it’s been a great conversation.

– [Matt] My pleasure.

– [Ryan] All right, everyone, thanks again for watching that episode of the IoT For All Podcast. If you enjoyed the episode, please click the thumbs up button, subscribe to our channel and be sure to hit the bell notification so you get the latest episodes as soon as they become available. Other than that, thanks again for watching and we’ll see you next time.