Analysts at IDC estimate that the worldwide Internet of Things, or IoT, market will grow from $1.3 trillion last year to more than $3 trillion in 2020. There's a lot of money to be made from this market, and BlackBerry is one of the companies that looks to make a splash.
The Internet of Things is a global movement where things become connected to the Internet. This includes cars, home appliances, wearables, billboards, credit cards, stop lights, etc. IDC estimates there will be 212 billion connected devices and sensors by 2020, far more than the 2.4 billion connected mobile devices that Gartner expects to ship in 2014. Cisco estimates the economic value of such connectivity will top $19 trillion by 2020. That's because these connected devices will continuously collect data, which will allow consumers, businesses, and government to make changes to city infrastructure, lifestyles, etc. for vast global improvements.
When investors think IoT, there are certain companies that come to mind. Apple is one, considered a key hardware player in IoT. Google is another with its software and Android operating system, and Intel because of its chips.
BlackBerry is not a company that often comes to mind. However, BlackBerry has a good opportunity to play a crucial role in the IoT as it has placed its bets on big data and security, two very important industries of the IoT.
Using data to create useful products and services
One effect of more connected devices is the accumulation of data. Then, data companies can provide services, and create more efficient products that serve certain industries. According to IDC, data will grow nearly fivefold between the years 2015 and 2020. Further, cloud-based data will account for 37% of this data, up from 16% in 2012. In other words, cloud-based data is where the real explosive growth will be created.
BlackBerry is establishing itself as a pioneer in both collecting data, and then using that data to create better products and services. According to CEO John Chen, 80% of BlackBerry users are enterprise customers, meaning the company can collect data in key industries with its connected devices. This strategy is called Project Ion , and one industry where BlackBerry is making a splash is in health care.
In health care, BlackBerry collects data from 250 hospitals and 16,000 connected medical devices. Combined, this creates more than 3 billion vital signs annually. Reportedly, BlackBerry is preparing a service that uses this information to help physicians spot signs of early illness, and to diagnose diseases more accurately. It's quite innovative, and the good thing is that, as more things are connected to the Internet and to BlackBerry's operating system, the data will only expand. As a result, BlackBerry's products and software that derive from data should also grow.
Creating a more secure IoT
One effect of having far more connected devices with personal information stored is that security will become even more important. In recent years, security has become a hot topic following high-profile attacks on the likes of Home Depot , Target , and JPMorgan . In a study by HP of Internet-connected devices, an average of 25 vulnerabilities per device were found. These ranged from weak passwords and unencrypted connections to the requirement of unnecessary personal information.
Thankfully, there is software to manage and secure mobile devices and applications. It's called mobile device management, or MDM, and BlackBerry is one of the bigger names in the space. Last week, BlackBerry unveiled its latest mobility support enterprise management software, BES12 .
According to BlackBerry, the new platform supports a whopping 25,000 devices per server, and 150,000 devices per domain. In addition to the unveiling of BES12, BlackBerry announced partnerships with Samsung and Salesforce.com , two companies that are expected to play big roles in hardware and the cloud, respectively, within the IoT. Samsung will work with BlackBerry's BES12 to offer end-to-end security for its Android hardware, and Salesforce.com will combine its cloud apps with BES12 management tools. This further strengthens BlackBerry's position in the IoT.
What gives BES12 an advantage in the IoT is it supports iOS, Android, and Windows, operating systems that will collectively control the IoT, most likely. Chen also disclosed at the company's Investor Day that a Fortune 10 client plans to use BES12 to manage non-BlackBerry devices. Finally, BlackBerry specifically designed this software for the IoT, meaning it can support the management of things, including medical diagnostic equipment, industrial machinery, and automobiles.
Something else to think about
In many ways, BlackBerry's initiatives with Project Ion and MDM work collectively. BES12 will have the capabilities to protect the software created through Project Ion. BlackBerry also has a hardware segment that has stabilized, and could also venture out into the "things" market.
BlackBerry's software revenue, which is the umbrella that BES12 and Project Ion fall under, is still small, although growing fast. Next year, BlackBerry expects to double software revenue to $500 million, less than 15% of expected full-year sales. However, the key takeaway is the rate at which the segment is growing, combined with the services that are being offered. Combined, they give BlackBerry a good shot to thrive in the IoT.
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The article BlackBerry Gets Ready for Internet of Things With BES12 and Project Ion originally appeared on Fool.com.
Brian Nichols owns shares of Apple, Google (C shares), and JPMorgan Chase. The Motley Fool recommends Apple, Google (A shares), Google (C shares), Home Depot, Intel, and Salesforce.com. The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), Intel, and JPMorgan Chase. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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