It’s no secret that the Internet of Things (IoT) is rapidly multiplying. It’s expected that there will be nearly 30+ billion connected devices by 2021, which is more than three per person on Earth. In addition, as smart sensors are placed to connect billions of “things” around the world, new IoT applications are emerging in virtually every industry, large or small.
Imagine any industry being able to purchase data generated by an IoT device (or collection of devices) anywhere in the world. It could be from sensors on an oil rig in the North Sea bought by government agencies to create better predictive weather models; or from a major airline’s jet engines for researchers to train better machine learning algorithms; or from air-conditioning units in a major office tower in Dubai bought by real estate developers trying to gain a competitive advantage over their competitors when designing new projects.
Along with these new, and in some cases, industry-disrupting IoT applications comes the dawn of the IoT Data Marketplace. Data is the most valuable asset today. And blockchain is one way the value of IoT data can be unleashed.
Blockchain is accelerating the maturity of IoT and other data exchanges by reducing the barriers to accessing data. But to do so it needs a strong storage backbone to be able to capture, preserve, access and transform data across the entire transaction ecosystem. The data is stored sequentially in blocks linked together by unbreakable chains.
How Big is the Opportunity for the IoT Data Marketplace?
Based on initial projections, by 2030, blockchain-enabled IoT data marketplace revenue could reach $4.4 billion. The market value of the data being transacted via these exchanges could rise to $3.6 trillion by 2030. By which time, more than one million organizations would be monetizing their IoT data assets and more than 12 exabytes of data would be transacted every day. That’s an impressive figure the digital equivalent of 27,000 times the entire contents the U.S. Library of Congress stores.
Within an IoT data marketplace, like in many commercial transactions, there will be buyers, sellers, and brokers that extract economic value from their assets—which, in this case, is IoT data. Buyers will be able to do things differently and create new, disruptive business models with new IoT applications. Sellers will create new revenue streams. Industries will be disrupted and, for the lucky ones, reinvented.
IoT data is virtually everywhere. Companies can choose whether or not to keep their data or create new revenue streams by selling their IoT data. According to Gartner, 80 percent of organizations fail to monetize their IoT data. There’s the saying “one man’s trash is another man’s treasure.” Look at the autonomous cars of the future, which are expected to create 2 TB of data per day captured through multiple sensors. As automotive moves to a shared economy where fewer people own cars but the cars are in use 20 hours/day, there is valuable data on board that could be sold to another industry, such as insurance or smart city planning.
Industrial, medical and automotive/transportation are among the industries driving the growth of IoT devices. By monetizing the data collected, these organizations can create new revenue streams with only an incremental additional investment.
A company planning to undertake a major capital expense on a 100,000-square-foot building can buy data from IoT devices deployed in similar structures elsewhere in the world. This data allows the company to save project costs on its new facility by accurately predicting, for example, HVAC costs, light usage, or services utilization before they invest in these systems.
In agriculture, drones can provide live temperature, soil quality and wind data. Agricultural or chemical companies could buy that data through either data licensing or direct data stream sales for specific time periods and use it as an input for their R&D efforts.
But what makes it all happen?
Storage is the Backbone of the IoT Data Marketplace
In order to make the IoT Data Marketplace, enabled by blockchain, a reality, storage is the fundamental layer for any data strategy. Clearly, larger capacities are required to support the rise in sensors and connected devices around the world. Depending on where in the data continuum– in the cloud, at the edge or in the data center — HDDs, SSDs, and other types of flash storage need to be in place to store the projected exabytes of IoT data. But it’s not just about storing the data. It’s what you can do with the insights gleamed from the data.
Artificial intelligence (AI) will enable valuable insights but has to rely on massive amounts of data collected and processed via machine learning to evolve its algorithms. A retailer, for example, would find it valuable to augment its own data with anonymized smart city and smart fleet data to help its AI and machine learning systems more effectively identify ideal locations for new stores or even target their ads better.
Blockchain is all about handling very sensitive data in a protected way. But in order to be meaningful, the data often needs to be centralized. In the case of collecting large volumes of data worldwide, blockchain could help to train AI algorithms and do so in a secure, traceable way.
Whether the data is centralized or decentralized across a network of computers, storage plays a critical role. On a typical blockchain, there could be large amounts of data and metadata on chain, or the data could reside off chain. In both cases, data needs to be accessible, traceable and trackable when changes are made. Storing data on chain, or making copies of everything, is good for redundancy but requires sufficient storage to avoid blockchain bloating. But keeping the data off chain could create a single point of failure and increase the risk of data loss.
Some additional storage considerations include where to store data and for how long? It comes down to accessing valuable data where and when you need it most. In a healthcare example, doctors on the front line may need to access data right away. They may be relying on data collected and stored at endpoints to quickly identify a patient as high risk. In another case, medical researchers may want to pull data from cold storage to see what trends have emerged in the past five years. In the case of long-term historical data, medical records need to maintain their integrity and be accessible in a secure way down the line. It is often too expensive and time intensive to push that data in cold storage to the cloud. Developing the right data strategy and the elements of storage that are foundational to it will become critical as companies and other entities are faced with these questions.
Enabling the IoT Data Marketplace
IoT is all about creating new use cases that bring real value to users. The IoT marketplace is all about creating value and new revenue streams from that data. Blockchain promises to accelerate the maturity of IoT data exchanges by reducing the barriers to accessing data. But blockchain cannot do this alone. As blockchain stores data as a transaction across multiple links in a chain, storage has to be optimized at every step of the way.