The DLA Piper European Technology Summit 2016 has been a groundbreaking event, bringing together thought leaders from across the European and wider technology industry.

Here are my main takeaways from the panel on the Internet of Things (IoT) which I had the pleasure of moderating at this Summit in London, one which included, as panelists: Mike Sutcliff, Group CEO at Accenture Digital; Ludovico Fassati, Head of Vertical Market Development at Vodafone; Mark Darbyshire, VP Platform – Integration at SAP; and Sanjay Pradhan, Principal Solutions Engineer at Salesforce.

The discussion was very interesting and among the key insights that surfaced were the following:

1. The IoT market has not yet reached its peak

There was an unanimous opinion that the IoT market is still far from reaching maturity. A number of companies did not fully understand the potential of IoT technologies and appear to be maintaining a ‘wait and see’ approach, monitoring what their competitors are doing. As an ‘evangelist’ on IoT matters, it’s my belief that such companies need to be supported in order to more deeply appreciate the transformative potential of the IoT for their company’s competitive advantage, whilst also acknowledging that such change often brings with it new legal issues and liabilities.

At the same time, there are professional services companies which have over 100 IoT products in the pipeline and are doubling revenues deriving from the IoT sector year on year. The IoT market itself is set to evolve considerably over the next few years.

2. Cyber risks are an issue, however customer trust rather than standards alone are the solution

The increase in cyberattacks is a threat for IoT technologies whose core consists of large databases and connected data. But the solution to cyber-attacks cannot be:

  • either granting the full control of a platform to the same supplier, since IoT requires the creation of a connected environment of different suppliers
  • or the approval by regulators of standards of security since standards will always lag behind the capabilities of hackers.

It is therefore essential for enterprise to create trust in the customer experience of its products. Such trust demands a sustained investment in innovation in order to limit the potential risks.

Standardisation might be the response to limit potential liabilities towards authorities and customers, especially in the light of the upcoming EU Data Protection Regulation. But the success of IoT technologies requires a relationship of trust between suppliers and customers.

3. The market will force interoperability between IoT platforms

There are currently over 360 IoT platforms and 100 protocols of communication between such platforms. However, this would appear to be a transitional phase which may soon evolve with the consolidation of a few platforms.

The potential cyber risks should not alone be considered a sufficient rationale for avoiding the necessary integration required for a connected environment.

Data is the critical foundation for IoT technologies and closed platforms will struggle to survive as they might not exploit the full potential of the IoT.

4. European privacy laws might be both a disadvantage and an advantage for IoT technologies

European data protection rules are considerably more restrictive than the privacy regulations in other jurisdictions. The scenario may grow yet more challenging with the EU Data Protection Regulation, which is set to increase the applicable sanctions to 4% of the global turnover of the breaching entity.

There is no doubt that such regulatory restrictions might hinder or even prevent the launch of some IoT technologies in the European Union. At the same time, they might become a competitive advantage because a higher level of compliance will lead to more trust by consumers in these technologies, which would thereby circumvent the ‘Big Brother’ effect.

The negotiation between industry and data protection authorities will be crucial. They will need to identify solutions that balance business needs with privacy compliance obligations.

5. IoT will not have a single winner

None of the panelists was of the opinion that there will be a ‘Google of IoT’. Our panelists’ belief was that it is more likely that there will be market leaders in the different segments of IoT which will require a ‘concertation’ between different platforms. IoT has such a broad scope that no company will be in a position to exert absolute control over all of it.

Open data regulations might not be the panacea that boosts the growth of the IoT, however governments will have a key role to play in ensuring all stakeholders understand the underlying public interest in the exploitation of such technologies.