Startups and entrepreneurs, not technology providers, consumer goods companies or enterprises, will drive the use and growth in the Internet of Things through the creation of many niche applications, according to Gartner Inc.

The firm predicts that by 2017, 50 percent of IoT offerings (typically a product combined with a service) will originate in startups that are less than three years old.

"Conventional wisdom is that the growth of the Internet of Things is driven by large enterprises,” Pete Basiliere, research vice president at Gartner, said in a statement. “As is always the case, there is an element of truth in conventional wisdom and major consumer goods companies, utilities, manufacturers and other large enterprises are indeed developing IoT product offerings."

But Gartner's research finds that it is the inventors and startups that will shape the IoT. “Individuals and small companies that span the globe are developing IoT solutions to real-world, often niche problems,” Basiliere said. “They are taking advantage of low-cost electronics, traditional manufacturing and 3D printing tools, and open- and closed-source hardware and software to create IoT devices that improve processes and lives."

Managers often assume the IoT is about business-to-business and business-to-consumer opportunities, relying on technologists within their enterprises to develop the needed systems and connected items, Basiliere said. “However, these firms are slow-moving elephants that cannot react quickly to what is happening underneath their feet,” he said.

Senior management and emerging technology strategists within large enterprises need to transform their product discovery processes, encourage entrepreneurs within their organizations to develop IoT concepts, and examine the feasibility of transferring the underlying ideas into their own organizations, Basiliere said.

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