The Internet of Things enjoyed a large growth spurt last week with a little-noticed announcement that several million home-security systems in Spain will soon connect to a nearly completed network built by Sigfox. The startup specializes in understanding the particular communications needs of water meters, electronic billboards, and burglar alarms. It’s the kind of work likely to become common.
There will be over 20 million devices designed to automatically relay information over the Internet by 2022, according to Machina Research. For most of these “Things,” traditional wireless Internet networks will be a pretty poor choice. Wireless carriers such as Verizon (VZ) and AT&T (T) have dedicated most of their resources to building advanced cellular networks that are designed to carry huge amounts of data to and from smartphones. Maintaining a connection to these networks burns through batteries, and wireless operators charge large sums for monthly data plans.
“The connection solutions we have today weren’t built for the Internet of Things,” says Thomas Nicholls, head of marketing for Sigfox. “They were built for smartphones.”
For smarthome devices, Wi-Fi or Bluetooth are reasonable substitutes. But a different solution is needed for a company trying to gather small amounts of information on a regular basis from, say, thousands of solar panels in remote locations. Sigfox is the leader in a world of startups working to connect these kinds of devices. It has already built nationwide networks in France and the Netherlands and is working on one for the San Francisco Bay Area and another for somewhere on the East Coast, although it won’t specify where.
By infrastructure standards, these are pretty easy projects. Sigfox’s Spanish network cost less than €15 million ($19.3 million) and will take about seven months to complete. It avoids one of the major costs of building a cell network—purchasing the rights to use spectrum—by using frequencies that don’t require licenses. The company then sells data plans for between $1 and $12 per device annually. Batteries in these devices can last for years. There are limits to what this buys—the plans only get you 140 messages of 12 bytes per day—but for many connected devices, that’s all you need.
Additional wireless companies are devoted to the special needs of things. A California-based company called On-Ramp Wireless builds custom networks for such customers as oil field operators while startups LinkLabs and Iotera are attempting to spark interest in their nascent networks by developing GPS trackersthat can be tied around a dog’s neck or thrown into a backpack.
Brian Ray, the founder of Link Labs, says the company is building a network covering the Washington area that should be operational in months. The 27-antenna network cost several hundred thousand dollars to build, and Link Labs plans on charging prices comparable to Sigfox’s. Such low networking prices could raise privacy concerns if, for example, appliance manufacturers were to decide it’s worth a dollar a year to get daily updates about the performance of their devices in the wild. “When you buy an air conditioner,” Ray asks, “do you have the right to know that it is sending out data without your consent?”
Sigfox’s networks in France are already used to connect electronic billboards, water meters, and tracking devices that monitor elderly people who live alone. While the alarm systems are the only devices using the network in Spain at the moment, Nicholls says the company should soon have other clients connecting. “The network is there so anyone can use it,” he says.