The Internet of Things took some big leaps forward in 2015, and 2016 is shaping up to be another terrific year of innovation. The industry is moving quickly, with an increasing number of devices and applications coming on line to support IoT initiatives across a number of vertical markets, from consumer-facing initiatives such as smart homes and connected cars, to industrial applications in industries such as oil and gas, shipping, and maritime.

However, despite this rapid growth, we’ll also continue to see challenges as people and companies try to tie together all the pieces of the IoT ecosystem to find solutions that work for their companies. From my perspective, three key factors will impact the IoT in 2016:

1. The 2G sunset will cause companies of all kinds—including all of the IoT and M2M early adopters—to scramble for new solutions as carriers transition their networks and their customers to 3G, 4G, 5G, and beyond. It’s not a simple upgrade, it’s a wholesale change to replace 2G-based equipment with the “next generation.” Companies across all verticals need to rethink their strategy immediately for how to approach this 2G sunset or they’ll see operations interrupted when these networks go dark. Some companies may choose not to go the cellular route and work instead with low-power, wide-area (LPWA) providers to avoid potential future sunsets and to have a network that better matches the needs of their IoT traffic. Cellular networks were built for communications between people, not between machines. Machine communications have different requirements than voice and high-speed data traffic, and these new networks were built specifically and exclusively for that machine traffic.
2. When companies do place their IoT connectivity bets, many will be looking for the same benefits they had with 2G—namely, the ability to “set it and forget it.” Remember, a bulk of IoT traffic is from sensors placed on remote assets placed out in the field long-term and are pinged once a day, once a week, or even less frequently. These assets are too expensive to service regularly, mostly because of location. Companies need low-maintenance solutions, and that means they need solutions with long battery life. Tremendous strides in battery technology have already been made, and we’ll see companies deploying solutions with a battery life of 10 or 20 years or more.
3. Partnerships will be key to helping the growing demand that IoT traffic is putting on networks. The ability to deliver an end-to-end experience for customers is something that’s seriously lacking in the IoT space, and filling those holes is crucial to moving the industry forward. I expect to see an increasing number of announcements—and consolidation—in the industry in 2016.

The IoT is starting to make serious inroads across all industries, and as we look ahead to 2016, the future looks bright. Companies that can successfully overcome the current industry challenges will find great success in this market, next year and well into the future.

John Horn is the CEO of Ingenu, With more than 20 years of experience in the telecomm and wireless industries, Horn is recognized as an M2M/IoT pioneer and leader. Previously, he served as President of RacoWireless.