KEY POINTS

  • The Internet of Things (IoT) — a vast network of internet-connected devices — is expanding rapidly. By the end of 2020, we project an installed base of 24 billion IoT devices worldwide, up from 4.2 billion in 2015. A variety of networking standards will need to be implemented to connect these diverse devices to each other and to the internet.
  • Networks play a crucial role in relaying and coordinating the flow of information across the IoT ecosystem. There are many types of IoT networks, including mesh networks like ZigBee and Z-Wave, internet networks like Wi-Fi, and cellular networks, such as 3G/4G, each with distinct use cases and benefits/limitations.
  • Several mesh-network standards are emerging to compete for low-power IoT devices. Unlike traditional networks, all the devices in a mesh network are connected to each other, so the network is decentralized. If one fails, the other devices can still transmit information externally or to each other directly. This makes mesh networks more reliable and better suited for connecting large numbers of devices with low power consumption and limited functionality like IoT devices.
  • Networks that tackle interoperability and offer IP-based connections will have the most widespread success. A lack of interoperability —  the ability of different devices to communicate and share data with each other — is one of the biggest barriers to the IoT's development. According to a June 2015 McKinsey report, 40% of the IoT's total potential economic value can be unlocked only by solving interoperability challenges.
  • Wi-Fi and Ethernet will help connect devices that stream high volumes of data. Both these networks have high data rates compared with other IoT-specific networks, and they're pervasive thanks to PCs and mobile devices.
  • Cellular networks that connect mobile devices will similarly fit the needs of highly mobile IoT devices that are meant to travel long distances. Cellular networks are used to connect the billions of mobile devices deployed around the world. These networks are ideal for IoT devices that require a connection and tend to travel long distances, or operate in more remote areas. 
  • New long-range standards like LoRaWAN may open up new possibilities for IoT device deployments over large geographic areas. Low-power wide-area networks (LPWANs) utilize little battery power on the connected devices, and their long-range capability gives them a distinct advantage over mesh networks in cases where IoT devices are connected [...]