2017 is shaping up to be a significant and disruptive year for the development of the Internet of Things (IoT), for both technology players and the industries where IoT is being deployed. Many enterprises are still in the early stages of thinking about deploying IoT solutions, but consumers are already embracing smart home devices, such as Amazon’s Alexa, with the smart home market alone expected to grow to more than 1.4 billion units by 2021.

As enterprises wade further into incorporating IoT into additional aspects of their businesses, the increased use of low power wireless access (LPWA) technologies, security concerns, and the growing role IoT analytics will all evolve rapidly. We take a closer look at how those trends will impact key industry verticals, within the wider context of growth and development of the broader IoT horizontal and vertical ecosystems.

1. Securing the IoT ecosystem becomes the top priority

IoT security challenges are complex, given the diverse and distributed nature of the IoT. From vulnerable smart home devices (in one recent example among many, Samsung’s smart TV reportedly has a number of security holes) to the risk of connected car hacking, IoT network, data, and device security must become a primary focus for all operating within the ecosystem in 2017.

As more IoT devices are deployed, and the vulnerability of a broad, distributed, and heterogeneous network of connected devices becomes apparent, it is likely that there will be many more instances of hacked IoT networks and devices. As these points of weakness are exposed, vendors and leading service providers are gearing up to address issues and breaches. Highlighting top-of-the-line security capabilities is likely to become a more prominent selling point, especially for those purporting to offer end-to-end IoT solutions.

Vendors and service providers should help customers understand these capabilities early in the discussion, ahead of IoT deployments, and should be especially sensitive to organizations’ concerns about damage to reputation or customer relationships. Expect to help your customers with many teething issues along the way.

2. LPWA goes mainstream

LPWA technologies are coming into the market in earnest in 2017, and will be a key enabler for new types of IoT use cases. For IoT providers and end users, LPWA networks can support low-cost, long-battery life IoT devices for a variety of low data-usage applications. Those standards using licensed spectrum (NB-IoT and Cat M1) can also be reliably and securely integrated with and tracked by mobile network operators. 2017 will see the first commercial deployments of both NB-IoT and Cat M1 by service providers, as well as wider take-up of unlicensed spectrum LPWA technologies such as LoRa and Sigfox. LPWA will be a useful option for enterprises considering the most cost-effective way to deploy IoT for applications such as asset tracking, remote monitoring, and smart cities.

LPWA will become a core thread of service providers’ IoT access technology diversification plans. Supporting diverse connectivity options is proving to be a key capability for IoT service providers (and the vendors who supply them), as they look to extend their reach to a wider range of end-user industries. In some cases, service providers will look to do this through partnerships rather than own-build. Early testing of LPWA versus cellular IoT capabilities will be key to understanding the most effective use cases.

3. Distributed analytics, big data and machine learning unlock new IoT opportunities

In the same way that security solutions for IoT are requiring a more distributed approach, we are also seeing a shift to enabling IoT data processing and analytics at the IoT network edge. This distributed approach to analytics minimizes the need to transport large amounts of data back to the network core before triggering an action or alert, allowing lower latency and better performance.

Integration of IoT data streams with AI and machine-learning engines, for applications ranging from elevator maintenance to smart homes, will also be moving forward in 2017. Platform providers and service providers are increasingly delivering solutions with integrated analytics designed to feed directly into machine-learning applications, where they support the optimization and adaptation of both IoT devices, and related processes and infrastructure.

4. Using IoT to drive the growth of new as-a-service business models

Early enterprise IoT adopters will be exploring how best to make use of their IoT data, and using big data and AI tools to support the development of new, transformational IoT business models. This will have an impact across all industry verticals, but particularly for those where heavy upfront capital investment is needed for IT and infrastructure projects, and where ongoing maintenance and operation of that infrastructure is required. Enterprises are starting to use IoT capabilities and data to enable customers to purchase anything from lighting to elevators via long-term, managed service models, rather than taking on full investment and ownership of infrastructure.

Behind the hype, solid progress is being made on a number of IoT technologies, tools, and business models, setting the scene for significant evolution of the IoT throughout 2017. As the broader IoT horizontal and vertical ecosystems continues to grow and develop, the enterprises who are most fastest to act upon these trends will be the ones putting themselves in the best position for market leadership.

Alexandra Rehak is Practice Head for Ovum’s IoT team, leading IoT coverage and thought leadership agenda. She is responsible for driving Ovum’s IoT research and consulting across service provider strategies, enterprise communications, IT/technology, consumer IoT and key industry verticals.

Gavin Whitechurch is the founder of Internet of Things World, and Senior Vice President of Strategy & Innovation for informa’s communities and events business, KNect365. He leads Informa’s development in Silicon Valley and their West Coast business presence.