The Internet of Things may be poised to become an monolithic, economic powerhouse that will innovate the entire world, but right now, more than half of all Internet of Things designers make less than $500 a month developing it, according to a new report.
In fact, less than 10% of IoT developers make enough to support a reasonably sized team.
The latest VisionMobile Developer Economics report, which was released at the end of July, covers the latest trends in mobile, desktop, cloud services, and IoT development based on a massive developer survey of more than 13,000 participants.
According to the report’s examination of IoT revenue models, the most popular ways to make money in the IoT is to sell physical products, and to license software, which are also the most lucrative revenue models. However, only 25% of IoT designers make between $500 a month and $10,000, while 16% make over $10,000 a month. The other IoT designers — a full 59% — make less than $500 a month.
Yet, McKinsey and Co.’s “Unlocking the potential of the Internet of Things” report claims that Internet of Things could offer a potential economic impact of $4 to $11 trillion a year by 2025.
Unfortunately, that value doesn’t get realized, because its standards have logjammed its potential, and because a staggering amount of IoT data just isn’t used.
According to the McKinsey report, “Currently, most IoT data are not used. For example, on an oil rig that has 30,000 sensors, only 1 percent of the data are examined. That’s because this information is used mostly to detect and control anomalies — not for optimization and prediction, which provide the greatest value.”
And consumers may not even be at fault. The new VisionMobile Developer Economics report finds that 26% of IoT developers aren’t even sure who their audience is. In other words, more than one in four don’t fully understand the product that they’re selling.
“The internet used to be a thing,” says Tom Ajello, Founder, Makeable. “Now it flows through (or can flow through) every single thing. Whether or not this is a good thing remains to be seen – but if it is going to be a good thing the data is going to need to be sent to a server and interpreted – as any platform that produced data tends to do.”
It seems, then, that in order to fully tap into the economic potential of the IoT, developers need to take a second, and think about their audiences. If they don’t know whose problem they’re trying to solve, how can they then hope to sell the product?