Verizon is making a big bet on the Internet of Things, a category the company said will fundamentally change the way we live.
At an event in San Francisco Wednesday, Mike Lanman, senior VP-enterprise products at Verizon, said there are a number of hurdles holding the IoT world back from being widely adopted. To help facilitate adopting and simplify the process from development to customer use, Verizon unveiled a slew of products and services related to IoT, including ThingSpace, a web-based platform the company said would make it easy for companies large and small to develop apps, for customers to manage their devices, partners to market their services, and Verizon to launch integrated vertical solutions.
Mr. Lanman also said one of the biggest struggles for IoT widespread use of the network connection is cost of the network connection, particularly to a wide area network versus WiFi or Bluetooth, and complications of connecting. He noted that noncellular connected devices typically connect to a network through a router, but that complicated setup for consumers and introduces potential for failure or unnecessary complication. Verizon is introducing an IoT network within its LTE architecture to enable easy connections. It's also offering LTE chipsets in a range of devices to make it easier to "automate the provisioning process and make it faster to deploy IoT devices on its wide-area network," the company said in a statement.
In short, it's creating the tools and infrastructure to hopefully enable more rapid adoption of connected devices and data -- everything from cars to home appliances to data that services the health-care industry.
"We really believe the market is underserved," said Mr. Lanman, noting that companies in this space are getting double-digit improvement in profitability, and cities have "tremendous" opportunity to cut costs, but the infrastructure, data and security isn't there or accessible. "With all the hype and babble, why aren't people executing faster against this space?"
Because IoT is still too complex, too fragmented, too expensive to connect and too hard to scale, he said. That's where Verizon comes in, he said.
Verizon also said data and security is another big issue impeding adoption, given some companies don't necessarily understand how to manage data in order to address customer needs.
"To help businesses and consumers gain more actionable insights, Verizon is powering IoT technology with its sophisticated big data engine," the company said in a statement. "One of the most advanced data and analytics operations of any industry, Verizon's platform is designed to consume massive amounts of data generated by IoT devices and other machines, analyze it at extremely high speeds and use scalable machine-learning to turn raw data into usable intelligence.
The big investment in IoT comes just after the company reported its third-quarter earnings last week. A small but growing source of revenue so far this year for the company is IoT, which brought in about $495 million year to date. In the third quarter, IoT revenue was up about 6.1% to $175 million.
Among one of the biggest areas of opportunities in the IoT is the connected car. Old guard automakers are working on connected cars, as are Google, Uber, and likely even Apple. Verizon this year has also worked to essentially retrofit old cars for a connected world. In August, Verizon launched Hum, a device that allows old unconnected cars to become a connected one. The company originally unveiled it earlier this year as Verizon Vehicle, but rebranded it at launch in August. It costs $15 a month and works with any carrier and collects fuel-economy data and battery levels, among other things, and then sends the data to the cloud, later showing up in an app on the car owner's phone.
At the event Wednesday, Verizon said it's already working with a number of partners, including Hahn Family Wines, which is using connected sensors for its crops and production, and the Innova car-sharing fleet.