BEYOND SHINY OBJECTS

The global market for the Internet of Things and the supporting ecosystem is expected to exceed $7.1 trillion by 2020. In 2013 alone, the market exceeded $1.9 trillion, with over 90% of all IoT devices in developed regions. Estimates range from 25 to 50 billion individual connected devices by 2020, with a compound annual growth rate of 17.5%. [IDC, Goldman Sachs, Gartner]

We are experiencing a Cambrian explosion of connected devices, no question. However, the Internet of Things is not simply a collection of these edge devices. There are enterprise and consumer applications, industrial automation, and an entire stack of infrastructure beneath those devices.

To make the next Nest, Sonos or Dropcam come to life, we need a powerful and stable ecosystem up and down the stack.

THREE WAVES OF COMPUTING

Center Electric believes that the Internet of Things (IoT) is the most revolutionary expansion of computing since the dawn of the personal computer. The Things themselves are a bellwether of the Internet's Third Wave. The First Wave was the prevalence of desktop connectivity. The Second Wave was the rapid connection of more screens, including laptops, mobile and tablets. The Third Wave is the expansion of connectivity to everything else, for both industrial and consumer use. Early indicators of this are the rise of cloud computing, the development of low power wireless technologies, and the initial rise of connected objects.

INFRASTRUCTURE

An infrastructure ecosystem includes power, connectivity, storage, security, routing and processing. Some components exist and can scale, and some have yet to be built. We're looking for companies that push the envelope to help scale the next generation of devices.

COMPONENTS, MANUFACTURING, SUPPLY-CHAIN

On the hardware front, an ecosystem includes design, supply-chain, manufacturing, component hardware, protocols and distribution. In the post-Kickstarter universe, what it takes to prototype, manufacture and distribute a great idea is entirely different than it was five years ago. Across the spectrum of this hardware ecosystem are opportunities emerging that were previously impossible.

HARDWARE AND DEVICES

The term "full stack" also applies to how a hardware company, manufacturing a device, approaches the market. Device companies today are also software companies, selling directly to the consumer, maintaining a relationship long past the sale. Companies developing devices, whether for consumer or enterprise, are dis-intermediating long-held monopolies on the supply-chain, distribution and service.