B2B IoT and B2C IoT may see different impacts from the fallout of Putin’s invasion of Ukraine. Here we consider impacts in silicon chip supply, investments, interoperability, and cybersecurity.
When Putin started firing rockets through people’s living rooms and torturing people, supply line issues and deepening of the chip crisis were forecast. Russia had been putting over 40% of the world’s palladium onto the market*, and Ukraine 70% of the world’s neon. For the chip-reliant industry of IoT, this presaged lower output, higher operating costs, and stymied innovation and growth. The strain on chip supply is still with us, even with some slowdown in the growth of demand for chips as we poke our heads through the doorway of a global economic downturn, and as consumer purchases move away from goods (like consumer electronics) and towards more services with easing pandemic restrictions.
But on the B2B side, where many IoT solutions enable greater efficiency and other benefits to the bottom line, we expect IoT investment to remain strong.
There have been recent drops in the price of oil, but natural gas and electricity prices have soared. New car sales have been dropping with supply issues and the cost of living crisis, though overall, longer term, rises of and instability in fuel prices may speed the transition to electric vehicles, in which there are myriad IoT opportunities. In a The Zebra survey**, 60% of respondents had considered buying a hybrid or EV, with 77% of that number motivated by fuel costs.
Rising energy costs are also driving new investments in renewables, with corresponding IoT needs in operations and in optimizing these energy systems.
Higher inflation, driven in large part by fuel prices, may mean spend in the consumer realm is directed more into higher priority goods and services – and many consumer IoT devices are simply about convenience. Again, however, on the B2B side, where IoT brings competitive advantages, we expect IoT investment to remain strong.
While Internet Protocol is a clear solution as a universal IoT protocol, enabling systems to interoperate more effectively, the growing global divisions emerging from Putin’s invasion increase the likelihood of difficulties making agreements on common standards and protocols across the divide. This may have some negative impact on the growth of solutions and opportunities in IoT.
While the arguments for it are unfailing, cybersecurity has long been a challenging point for investment, with, in many cases, no immediate tangible bottom-line impact. However, with growing awareness of cyber risks, buyer demands, and evermore risk owing to a mutating geopolitics, plus regulatory responses to the risks, demand for effective IoT cybersecurity is rising, and opportunities for innovation in IoT security are burgeoning.
…are something of a mixed bag, with some fuelling and some subduing of IoT opportunities; and impacts potentially differing across B2B IoT versus B2C IoT. Either way, we want to see human life, and other life, flourish, with people of Putin’s ilk stripped of power. (This article was written before Putin cut off Nord Stream 1. We’ll see how that goes. I might report back on that.)
*Survey before Putin’s latest ’excursion’.