The Internet of Things (IoT) is the latest technology buzzword doing the rounds but what does it mean exactly, and why is it exciting consumers and businesses?
The Internet of Things is already a strange phenomenon. As a term, it often confuses consumers, excites developers, and rouses and terrifies end-user businesses in equal measure.
There are a number of reasons for this, as we’ll detail shortly, but there’s little doubting at least that IoT has a huge future as our lives become increasingly digitalised.
Some market figures back this up; Cisco has labelled IoT as an $19 trillion opportunity for companies and industries, while a TechNavio report estimates that the global IoT market will grow at a CAGR of 31.72 percent from 2014-2019.
IDC and Intel, meanwhile, predict that there will be over 200 billion ‘things’ in circulation by 2020, with Gartner’s acclaimed Hype Circle putting IoT at the ‘peak of inflated expectations’ – the time where new technology starts to see real business benefits.
So what is it?
These figures are impressive and yet, there does seem confusion around the Internet of Things and what the term means. To different people it means different things, from expensive ‘connected’ toys to the ability to collect huge datasets from legacy enterprise systems connected to the Internet, and using this information for numerous different purposes.
According to the Oxford dictionary, the Internet of Things refers to “the interconnection via the Internet of computing devices embedded in everyday objects, enabling them to send and receive data”. Wikipedia rather surprisingly adds that the Internet of Things (IoT) “is the network of physical objects or “things” embedded with electronics, software, sensors, and network connectivity, which enables these objects to collect and exchange data.”
SAS offers a more simplified version, saying that IoT is a network of “everyday objects – from industrial machines to consumer goods– that can share information and complete tasks while you are busy with other activities, like work, sleep or exercise.”
In truth, IoT is all of the above; It’s about ‘smart’ everyday objects connecting to the Internet, identifying themselves to other devices through communication protocols like RFID, Wi-Fi, Bluetooth, QR codes, and acting upon that information without human intervention.
This increased connection is a sign of increased machine-to-machine (M2M) communication which is built on cloud computing and networks of data-gathering sensors. It’s mobile, virtual, and instantaneous connection.
British entrepreneur Kevin Ashton coined the term in 1999, and in a recent interview with Diginomica said that the future is bright.
“What the Internet of Things is really about is information technology that can gather its own information. Often what it does with that information is not tell a human being something, it [just] does something.
“It’s the difference between, ‘Oh, my fridge is empty, my fridge is going to tell me, ‘I’m empty,’ and a system which observes things and takes action based on those observations and doesn’t need to trouble you with that information. That’s really where we’re headed.”
It’s not new
Despite all this early buzz, much of the technology behind IoT has arguably been around for years.
Near-Field-Communication (NFC), Bluetooth, robotics and artificial intelligence, as well as telemetry (a precursor of telematics) can be traced back decades – while the first IoT hardware goes back to 1982. The first connected-toaster came to market in 1989.
Some industry verticals could also argue that they’ve been doing IoT under a different name for years; manufacturing has had automated, predictive maintenance for years, insurance has adopted telematics and retailers have looked to harness social and smartphone data.
Benefits for business
A lot of the media attention has focused on the consumer benefits of IoT and rightly so. Wearables, in particular, offer a massive potentially to keep us fit, while Nest and Hive thermostats help us save money on heating. Cameras like Dropcam let us monitor the home. IoT is ultimately about user convenience.
But it’s clear this is the very tip of the iceberg, especially as far as business is concerned.
There have been a number of early IoT case studies across all industries, from retailers and banks using Apple iBeacons to offer tailor ads, and airlines with sensors for predictive maintenance, to insurers determining insurance premiums by tracking data from black boxes in cars or smartphones.
This move to IoT is changing business models, revenue streams and how companies interact with their customers.
It’s clear that this is just the start, as innovation expert Daniel Burrus suggested recently in a piece for Wired magazine.
“It’s about upending old models entirely, creating new services and new products. There is no one sector where the Internet of Things is making the biggest impact; it will disrupt every industry imaginable, including agriculture, energy, security, disaster management, and healthcare, just to name a few.”
The Internet of Things age is here – are you ready for the disruption?