By 2020, experts forecast that up to 28 billion devices will be connected to the Internet with only one third of them being computers, smartphones and tablets. The remaining two thirds will be other “devices” – sensors, terminals, household appliances, thermostats, televisions, automobiles, production machinery, urban infrastructure and many other “things”, which traditionally have not been Internet enabled.
This “Internet of Things” (IoT) represents a remarkable transformation of the way in which our world will soon interact. Much like the World Wide Web connected computers to networks, and the next evolution connected people to the Internet and other people, IoT looks poised to interconnect devices, people, environments, virtual objects and machines in ways that only science fiction writers could have imagined.
In a nutshell the Internet of Things (IoT) is the convergence of connecting people, things, data and processes is transforming our life, business and everything in between.
A fair question to ask at this point is how IoT differs from machine to machine (M2M), which has been around for decades. Is IoT simply M2M with IPv6 addresses or is it really something revolutionary?
To answer this question you need to know that M2M, built on proprietary and closed systems, was designed to move data securely in real-time and mainly used for automation, instrumentation and control. It was targeted at point solutions (for example, using sensors to monitor an oil well), deployed by technology buyers, and seldom integrated with enterprise applications to help improve corporate performance.
While, IoT, on the other hand, is built with interoperability in mind and is aimed at integrating sensor/device data with analytics and enterprise applications to provide unprecedented insights into business processes, operations, and supplier and customer relationships. IoT is therefore, a “tool” that is likely to become invaluable to CEOs, CFOs and General Managers of business units. (WPC)
The technical definition of The Internet of Things (IoT) is the network of physical objects accessed through the Internet. These objects contain embedded technology to interact with internal states or the external environment. In other words, when an object can sense and communicate, it changes how and where decisions are made, and who makes them.
Due to the great breadth in the number of industries which have begun to be or soon will be affected by IoT, it’s not right to define IoT as a unified “market”. Rather, in an abstract sense, as a technology “wave” that will sweep across many industries at different points in time. The Internet of Things (IoT) is emerging as the third wave in the development of the Internet. The 1990s’ Internet wave connected 1 billion users while the 2000s’ mobile wave connected another 2 billion. The IoT has the potential to connect 10X as many (28 billion) “things” to the Internet by 2020, ranging from bracelets to cars.
Breakthroughs in the cost of sensors, processing power and bandwidth to connect devices are enabling ubiquitous connections right now. Smart products like smart watches and thermostats (Nest) are already gaining traction as stated in Goldman Sachs Global Investment Research’s report.
IoT has key attributes that distinguish it from the “regular” Internet, as captured by Goldman Sachs’s S-E-N-S-E framework: Sensing, Efficient, Networked, Specialized, Everywhere. These attributes may tilt the direction of technology development and adoption, with significant implications for Tech companies.
Source: Goldman Sachs Global Investment Research.
A number of significant technology changes have come together to enable the rise of the IoT. These include the following:
- Cheap sensors – Sensor prices have dropped to an average 60 cents from $1.30 in the past 10 years.
- Cheap bandwidth – The cost of bandwidth has also declined precipitously, by a factor of nearly 40X over the past 10 years.
- Cheap processing – Similarly, processing costs have declined by nearly 60X over the past 10 years, enabling more devices to be not just connected, but smart enough to know what to do with all the new data they are generating or receiving.
- Smartphones – Smartphones are now becoming the personal gateway to the IoT, serving as a remote control or hub for the connected home, connected car, or the health and fitness devices consumers are increasingly starting to wear.
- Ubiquitous wireless coverage – With Wi-Fi coverage now ubiquitous, wireless connectivity is available for free or at a very low cost, given Wi-Fi utilizes unlicensed spectrum and thus does not require monthly access fees to a carrier.
- Big data – As the IoT will by definition generate voluminous amounts of unstructured data, the availability of big data analytics is a key enabler.
- IPv6 – Most networking equipment now supports IPv6, the newest version of the Internet Protocol (IP) standard that is intended to replace IPv4. IPv4 supports 32-bit addresses, which translates to about 4.3 billion addresses – a number that has become largely exhausted by all the connected devices globally. In contrast, IPv6 can support 128-bit addresses, translating to approximately 340 trillion addresses – an almost limitless number that can amply handle all conceivable IoT devices.
“The Internet of Things will give IT managers a lot to think about,” said Vernon Turner, Senior Vice President of Research at IDC. “Enterprises will have to address every IT discipline to effectively balance the deluge of data from devices that are connected to the corporate network. In addition, IoT will drive tough organizational structure changes in companies to allow innovation to be transparent to everyone, while creating new competitive business models and products.”
IoT is shaping modern business- manufacturing to marketing. A lot has been already changed since the inception of the Internet and many more will get changed with the greater Internet connectivity and reach. The global network connecting people, data and machines are transforming the modern business is also called Industrial Internet. The so called Industrial Internet had potential of $10 to $15 trillion to global GDP in next two decades.
Source: Chip Design
The “buzz” surrounding IoT has so far been more focused on the home, consumer and wearables markets, and tends to overshadow the enormous potential of Internet Protocol (IP) connected products in industrial and business/ enterprise worlds. IoT in the consumer world is effectively a greenfield opportunity with no installed base and no dominant vendors, whereas there are many examples of connected products in this arena. the definition of the “Industrial and business/enterprise Internet” for IoT purposes refers to all non-consumer applications of the Internet of Things, ranging from smart cities, smart power grids, connected health, retail, supply chain and military applications. The technologies and solutions needed for creating smart connected products and processes share many common attributes across industrial and business verticals.
Source: Cisco (smart cities)
The IoT Value Chain
The IoT value chain is broad, extremely complex and spans many industries including those as diverse as semiconductors, industrial automation, networking, wireless and wireline operators, software vendors, security and systems integrators. Because of this complexity, very few companies will be able to successfully solve all of the associated problems or exploit the potential opportunities. (WPC)
Internet of Things Predictions
According to IDC , IoT will go through a hug growth in the coming years in many directions:
- IoT and the Cloud. Within the next five years, more than 90% of all IoT data will be hosted on service provider platforms as cloud computing reduces the complexity of supporting IoT “Data Blending”.
- IoT and security. Within two years, 90% of all IT networks will have an IoT-based security breach, although many will be considered “inconveniences.” Chief Information Security Officers (CISOs) will be forced to adopt new IoT policies.
- IoT at the edge. By 2018, 40% of IoT-created data will be stored, processed, analyzed, and acted upon close to, or at the edge, of the network.
- IoT and network capacity. Within three years, 50% of IT networks will transition from having excess capacity to handle the additional IoT devices to being network constrained with nearly 10% of sites being overwhelmed.
- IoT and non-traditional infrastructure. By 2017, 90% of datacenter and enterprise systems management will rapidly adopt new business models to manage non-traditional infrastructure and BYOD device categories.
- IoT and vertical diversification. Today, over 50% of IoT activity is centered in manufacturing, transportation, smart city, and consumer applications, but within five years all industries will have rolled out IoT initiatives.
- IoT and the Smart City. Competing to build innovative and sustainable smart cities, local government will represent more than 25% of all government external spending to deploy, manage, and realize the business value of the IoT by 2018.
- IoT and embedded systems. By 2018, 60% of IT solutions originally developed as proprietary, closed-industry solutions will become open-sourced allowing a rush of vertical-driven IoT markets to form.
- IoT and wearables. Within five years, 40% of wearables will have evolved into a viable consumer mass market alternative to smartphones.
- IoT and millennials. By 2018, 16% of the population will be Millennials and will be accelerating IoT adoption due to their reality of living in a connected world.
Challenges facing IoT
IoT is shaping human life with greater connectivity and ultimate functionality through ubiquitous networking to the Internet. It will be more personal and predictive and merge the physical world and the virtual world to create a highly personalized and often predictive connected experience. With all the promises and potential, IoT still has to resolve three major issues, unified standards for devices, privacy and security. Without the consideration of strong security at all joints of the IoT and protection of data, the progress of IoT will be hindered by litigation and social resistance. The expansion of IoT will be slow without common standards for the connected devices or sensors .
- What is next for IoT?
- Internet of Things (IoT): Security, Privacy and Safety
- Internet of Things (IoT) : Myths and Facts
- Internet of Things (IoT): The Third Wave?
- Fog Computing is Vital for a Successful Internet of Things (IoT)
- The Industrial Internet of Things (IIoT): Challenges, Requirements and Benefits
- The Internet of Everything (IoE)