Cisco’s Internet Business Solutions Group has predicted that by 2015 there will be 25 billion connected devices and by 2020 that number will have increased to 50 billion. All these connected devices are forming ‘The Internet of Things’ (IoT).
The sheer scale indicated by this prediction tells us that the IoT is going to be a significant development in all of our lives.
So what is the Internet of Things and what impact will it have on us both at home and at work?
Simply put, the IoT is a phrase for when everyday objects are connected to the internet and participating together on a system (though it also means the convergence of conventional connected devices and smart appliances).
By devices, we are not referring to just smartphones and tablets. A device means everything. For example, a start-up company ‘Sparked’ in The Netherlands is using wireless sensors on cattle so that when one is sick or pregnant, it sends a message to the farmer.
High profile developments in the IoT are generating interest in the mainstream media. A lot of publicity has been given to the Google acquisition of Nest- manufacturers of smart thermostats and smoke detectors. Along with the availability of items such as fit bands sending data to your mobile device about your daily activity, it is easy to assume that the IoT is primarily a consumer development.
This cannot be further from the truth. Although these high profile products demonstrate the use of the IoT and increase understanding of its existence and potential, it can be argued that the IoT will have a far greater impact in business and industrial markets.
By embedding sensors and actuators in machines and other physical objects to bring them into the connected world, enables monitoring of the product flow through a factory, to measuring the moisture in a field of crops or tracking the flow of water through utility pipes, for example.
The IoT allows businesses and public sector organisations to manage assets, optimise performance and create new business models.
With remote monitoring, the IoT also has great potential to improve the health of patients with chronic illnesses and attack a major cause of rising health care costs.
The aim is to have people or organisations seamlessly retrieve knowledge and function on a day-to-day basis without having to sit down at a computer desk or talk to another human. It’s like ubiquitous computing, but goes beyond Google Glass and extends to every home, car, business, building and system in the world.
Cisco predicts that the IoT’s potential value will be $14.4 trillion for companies and industries worldwide in the next decade. More specifically, over the next 10 years, this potential value represents an opportunity to increase global corporate profits by about 21%.
In other words, between 2013 and 2022, $14.4 trillion of value (net profit) will be “up for grabs” for enterprises globally driven by the IoT. The IoT will create new value and redistribute value among leaders and laggards, based on how well companies take advantage of the opportunities presented by the IoT.
The IoT will make it possible for everybody and everything to be connected at all times, receiving and processing information in real time. This will result in new ways of making decisions, backed by the availability of information.
The option of being online and traceable at all times has also led to the emergence of a new generation of consumers who demand new products and services based on ubiquity and interconnection.
These changes in production and consumption patterns are changing the relationship between all the elements of the supply chain. This enables a whole host of opportunities to design and offer new products and services, to make more efficient use of existing assets. This provides a fertile ground for leading-edge technology and manufacturing companies to take advantage of this rapidly developing phenomenon.
The IoT is an enormous subject and still in the early stages of its development and potential. Over the coming weeks we will take a look at some applications of the IoT and finish by assessing the positives and negatives of this technological upheaval.
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