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The NYT’s recent acquisition of Wordle shed light at the PTC HQ around the # of letter combos used within Proptech. IOT, ML, AI, SMART, FOO, NFTs, DAO, ……IOU, TLC, FBI…well maybe not the last three but you get our drift. But as the elder statesmen on the block, IOT has kind of lost its place as Proptech’s true enabler, usurped by the “sexier” conversations around web 3.0 + metaverse.
In a world that is dominated by the utilization of (big) data, AI + the ever-advancing connectivity technologies, the broad thematic of the ‘Internet of Things’ is still the key to many strategies. Without it, much of the innovation, insights + use cases for Proptech wouldn’t exist.
The Internet of Things describes physical objects with sensors, processing ability, software, and other technologies that connect and exchange data with other devices and systems over the Internet or other communications networks.
Among use-case clusters, operations optimization probably accounts for the biggest opportunity of the IoT forecasted economic value. It is projected that by 2030 the most significant value use cases is to be found with “autonomous vehicles”, “human productivity”, “condition-based maintenance” and “inventory management”.
The total IoT market is expected to grow to anywhere between $7-$12B by 2030 with the costs of sensors estimated to reduce to a mere by $0.25 per sensor. Geographically the strongest growth is seen in APAC (17% growth), N-America (14.9%) and Europe (9.7%). It is projected that this growth will accelerate even more at 26.7% (CAGR) annually. There will be an estimated 31bn IoT connections by 2025.
However, much like when we I got my Nintendo Gameboy for X-mas, (the lustre quickly dissipated when I realized my folks had scrimped on paying for the 4 batteries to power it), IoT’s biggest challenges revolve around, not the sensor’s capability itself, but the mechanisms that drive it. Delivery issues such as connectivity, reliability, accuracy, scalability, data ELT, cyber security regs and power consumption are still catching up.
Nonetheless, there is various trends we are seeing currently in market, leveraging the current capability of IOT.
Market Consolidation- the availability of cheap sensors is meaning it is much easier to understand buildings for various use cases. Leveraging this capability has widened the scope of point solution platforms to now bring in a wide range of data sets - a key design feature being the focus on users, not bending users to understand the platform. We are already seeing this drive M+A plays in the sectors.
Benchmarking - Real estate’s wonderful richness in building types makes it challenging to accurately compare. As the key data becomes more available + intertwined, the consistent analysis of performance is becoming more widespread.
Reporting - Automated reporting is not new. What is, is the key metrics for each building user. As this is still evolving, aggregated data from a variety of sources will enable better customer knowledge - particularly as we are seeing more + more asset owners move to mixed-use delivery or management in response to evolving asset usage. Structured real-time data is enabling flexibility + insight driven reporting. Meaning the move from aggregation to decisions is a lot more prevalent.
IoT will remain at the core of all Proptech strategies. Whilst new developments will always garner attention its role shouldn’t be undervalued. We are now entering a stage where we can truly leverage the value of it + that means we are now truly moving towards buildings being…T-A-S-R-M….SMART…
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