IoT security presents revenue opportunity, says Beecham Research

Security and data management for the internet of things presents a big value-add revenue opportunity for service providers

Security and data management for the internet of things (IoT) is a big value-add revenue opportunity for service providers, says Beecham Research.

Due to the growing complexity of IoT applications and trend towards consumer-driven, multi-service environments such as smart cities, cars and homes, there is a growing need to manage edge devices such as sensors, switches, smartphones and tablets, connected using a variety of short-range wireless and fixed-line technologies, according to the latest report on IoT from Beecham Research.

“With this pace of change, companies will increasingly rely on outsourcing and we expect that revenues from device authentication, device management, data management, billing and security will exceed $3bn by 2020. Out of these, we see security and data management services generating some $1.8bn alone,” said Saverio Romeo, principal analyst at Beecham Research and author of the report.

While data management for IoT is currently a small market, Beecham Research believes it has the most potential for high gross margins. But of all the enabling services, the report highlights IoT security as the most strategic, across the network, device and services domains.

“While many market players still see security as a cost rather than a business opportunity, this is changing, and we see IoT security providers offering high-value, end-to-end security to service and application providers,” said Romeo.

The report also looks at authentication, device management and billing/charging as leading indicators of the growth potential for enabling services in an IoT environment.

“Enablement services, usually configured as cloud-based platform services, cover all enabling services for IoT solutions,” said Robin Duke-Woolley, CEO at Beecham Research. “We see many changes in requirements for these enabling services in the IoT market now compared with just a few years ago,” he said.

Beecham’s current research is around assessing the impact of this on the connectivity services layer, the application enablement layer and on other services that span both.

The latest report comes five months after Beecham Research called on industry to take immediate action on security for IoT devices.

The earlier report recommended that devices must be securely managed over their entire lifecycle, to be reset if needed, and to enable remote remediation to rebuild and extend security capabilities over time.

The report said industry players should unite, from silicon semiconductor manufacturers to network operators and systems integrators, to ensure security is built in from start to finish, with particular attention to the identification, authentication and authorisation of devices and people in IoT systems.

Read more on Privacy and data protection