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Our physical world is being colonized by digital technology that seeks to sense, interpret, interface, and augment the human experience. Across the built environment, connected devices promise to feed advanced AI systems with all manner of data on the real world to bring about advanced automation and actionable insight. However, the sheer scale of the potential markets in cities and buildings has created large and fragmented industries with diverse selections of players, partnerships, and perspectives. 

Consequently, interoperability problems reign in the fragmented smart cities and smart buildings sectors, resulting in limited market penetration and glacial growth relative to industry ambitions and market potential. The ubiquity of cities and buildings in human life allows us to compare and contrast them with sweeping technological shifts like personal computing, mobile, and smart telephony, or the internet. Had the industries behind those revolutionary technologies not overcome interoperability issues, the world would probably be very different today.

“From the very beginning, he was clear that if the [internet] technology had been proprietary and under his total control, it probably wouldn’t have taken off,” said Gianni Minetti, CEO at Paradox Engineering, about Sir Tim Berners-Lee’s invention of the World Wide Web in the 1980s. “Today, none of us would buy a laptop or a smartphone which could only connect to a legacy network. It is more or less the same for cities on their smart journey: there isn’t much value in being tied to a single vendor or a proprietary technology.”

Be it in smart cities or smart buildings, the IoT has an interoperability problem that is holding back tech adoption, value creation, and our evolution to a smart cyber-physical world. From a hardware perspective, devices made by different manufacturers don’t integrate, connectivity meanwhile presents a range of incompatible protocols, but the most significant challenge comes from the data itself. Without set rules or standards at the application level, it becomes impossible to combine and complement the data gathered from different families of sensors and devices.

Data is the key asset in smart cities, and it is important to enable data sharing between multiple systems,” wrote Srikanth Chandrasekaran, senior director and foundational technologies practice lead at the IEEE Standards Association. “Frictionless movement of data between multiple physical, digital, and human systems is the holy grail as it generates value.”

By 2025, the world will be fitted with 41.7 billion IoT devices that transmit 73.1 zettabytes of data, according to IDC, but up to $4 trillion per year of the potential economic impact of that data is held back by interoperability issues, according to McKinsey & Co. Buildings and cities should make up a significant proportion of those forecasted devices and zettabytes, but their consumers find themselves in a high-cost maze of compatibility considerations, vendor lock-in issues, and all too often, poor return on investment. 

“It is estimated that smart city projects using proprietary technology cost 30% more than those using interoperable technology and standards like 6LoWPAN,” continued Minetti, in an article for Cities Today. “That is because legacy systems generate more complexity and can lead to duplicated implementation and maintenance costs, as well as incurring impossible or expensive integration with other systems. They also run the risk of obsolescence and ultimately a poor return on investment. Further, 6LoWPAN offers free unlicensed bands with no recurring fees or costs, and it is natively designed to be energy-efficient.”

A range of associations, consortiums, and standards organizations have emerged in both smart cities and buildings, all identifying the same interoperability problem but divided by their choice of solution. From hardware integration to connectivity and data formatting, interoperability is already technically possible. The real issue holding back the interoperability of the IoT in smart buildings and cities is cooperation in the industry & entrenched knowledge silos.

“There are so many competing government organizations, standards bodies, industry coalitions, corporations, academic institutions, and even individual contributors making contributions in this space, with significant variance by industry and even location sometimes in the same industry,” said Shawn Chandler, Former Associate Editor of IEEE Communications Society’s IoT Magazine. “Interoperability does exist, but it is challenged today as a result of sustained innovation outpacing the standards industry, which seeks to provide well-vetted templates of communication, methods, and protocols, to govern information exchange, data privacy, and security.”

“Global standards organizations such as IEEE spend significant effort forming teams of industry experts to evaluate needs as they emerge, forming approaches, developing guides and recommended practices in a hierarchy of increasingly meaningful frameworks, which result in a set of accepted standards,” continued Chandler. “In this way, interoperability for IoT becomes a native expectation across industries, rather than contrived through a collection of devices and artifacts requiring significant customization for every new feature.”

The smart buildings and cities markets continue to attract new vendors, device providers, platform enablers, and service-based ecosystems, further fragmenting the industry and further reducing interoperability. Major players like Google, Apple, Amazon, and Samsung have the ability to create interoperable ecosystems that open up the market to a wide world of third-party solution providers. Instead, each builds their own ecosystem until they feel they are positioned to take the lion’s share of that new open landscape. This battle between open standards and closed ecosystems seems set to continue to strangle market growth until a significant shift in industry cooperation or some disruptive innovation.