Both established companies and start-ups are eyeing opportunities in the IoT ecosystem. The nature of the opportunities and, importantly, the economics of each opportunity, vary quite a bit. Choosing the ‘right’ opportunity requires a fit between individual interests and the realities of the opportunity.
We see this playing out within KotahiNet too.
In the LoRaWAN network part of the company, scale economies are critical. Margins will always be thin and scale provides the financial logic. On the other hand, the solutions part is very different. Product economics dominate with our first service FruitSenz being an example of its inherent low volume, expertise-rich nature.
Dilip Sarangan has analysed the opportunities from a global perspective in Show Me The Money – Who Really Makes Money In IoT?
He takes the Frost & Sullivan view of the “fragmented” IoT ecosystem as his frame of reference. Dilip concludes opportunities lie in IoT platforms, data storage, data analytics, and device & network security.
In my opinion the first two, IoT platforms and data storage, have challenging economics for Kiwi companies. There are certainly local opportunities but need significant capital and scale to offer a compelling proposition to global markets. I think these opportunities can be started from New Zealand but will require early overseas presence and infrastructure to really get going.
The other two, data analytics and device & network security are far more attractive for Kiwi companies. Both are immensely important in the IoT ecosystem. They have the right economics and the right fit for Kiwi companies.
For most Kiwi companies looking at the IoT ecosystem for opportunities, the analysis points to starting with data analytics and device & network security. If the economics work for you, also consider IoT platforms and data storage.