One day soon, we will wake up and wonder how we ever survived in a world of “dumb” disconnected things. Our homes, including our pantries, closets, and shoe racks, and our offices, factories, and vehicles will be full of connected devices.
The World Economic Forum estimates that the number of connected devices will grow at a compound annual growth rate (CAGR) of 21.6% over the next four years from 22.9 billion in 2016 to a headline-grabbing 50.1 billion by 2020 – equivalent to almost five connected devices for every person on the planet.
By 2020, there will be an estimated 5 connected devices to every 1 person on the planet.
But that will be just the beginning. Welcome to the Internet of Things (IoT).
Underpinning the growth of IoT are tumbling prices for the sensors that turn “dumb” things into “smart” devices and capture data from the environment around them, and the vast data-centric and mostly wireless networks that connect these devices to each other and to the broader Internet.
As the sensors grow ever cheaper, and the network grows ever larger, the more data we as individuals, professionals, companies, and governments can collect and analyze to make ever more intelligent decisions.
Just like other commoditizing electronic components, fierce competition, and Moore’s Law has driven down prices, especially for accelerometers and gyroscope sensors typically used in smartphones and other mobile devices.
As a result, manufacturers can add sensor and communications modules to almost any product for a few dollars, bringing the day when everything (valued at $10 or more is) I0T-ready a big step closer.
“Our perspective is that cost of both the sensors and devices is approaching free and the size is approaching invisible,” said James Bailey, managing director of the mobility practice at Accenture, last year. “Literally everything will have IoT technology at some point.”
At the same time, the cost of embedded processors, networking and cloud-based computing – other key components in the IoT world – have all fallen.
The opportunity for transformation
IoT, particularly the Internet of Industrial Internet of Things (IoIT), is about hyperconnectivity and sensor-generated data – huge amounts of it. But the real value lies in what you can do with that data – in the outcomes it enables, rather than the collection, transmission, or storage of that data.
“We need more data-driven decision making,” said Tanja Rückert, executive vice president of Digital Assets and IoT at SAP, during the SAP Executive Summit on the Internet of Things that took place earlier this month.
Her views were echoed by Nils Herzberg, senior vice president and global co-lead of IoT Go to Market, who stressed that “data is the fuel of the 21st century.”
Nevertheless, a recent study found that while 81 percent of business executives believe that successful adoption of industrial IoT is critical to their company’s future success, only 25 percent have a clear industrial IoT strategy.
A challenge and a huge opportunity remains for those enterprise software and services companies that have the technology and tools available to help people and businesses make sense of, analyze, and harness the tsunami of data that we are about to be engulfed by.
Here’s the real business potential to add value through IoT: Companies in almost every industry will transform into digital businesses which means oversight must be powered by real-time data – fed in large part by sensors.
As Herzberg, says, the beauty of sensors that they bring real-time data to applications: “Customers run applications for business critical processes, which could run better with real-time awareness.”
Big Data analytics and machine learning will deliver personal and business insights and will enable us to make immediate decisions based on that data – rather than relying as we have in the past, on guesswork or out-of-date forecasts. “When sensors provide real-time information, customers can make better decisions, rather than using guess work,” says Herzberg.
IoT data is already helping companies track goods on their way through the supply chain and immediately alert managers in case of theft or damage, reducing waiting times in busy ports, playing a key roll in jet engine and tractor predictive maintenance, helping farmers optimize crop yields, and improving safety across a number of public and private enterprises.
So how big is the market opportunity? Cisco, the networking equipment group, predicts the global Internet of Things market will be $14.4 trillion by 2022, with the majority invested in improving customer experiences.
Cisco suggested that additional areas of investment would include reducing the time-to-market ($3T), improving supply chain and logistics ($2.7T) and cost reduction strategies ($2.5T) and increasing employee productivity ($2.5T).
But the implications of IoT and the Big Data analytics that it feeds will go far beyond traditional business models and have a profound impact on both enterprises and individuals. When combined with machine learning and cognitive computing, the insights derived from IoT data will enable us as individuals and businesses users to deploy intelligent agents empowered to make autonomous decisions and negotiate with other agents on our behalf.
This is not about machines replacing humans. Rather, intelligent apps augment humans’ ability to run the business. Predicted businesses will deploy intelligent agents across multiple areas to help all employees, from sales to suppliers to shop floor.
Things to outcomes
Ultimately, machines will help people understand connections between information by monitoring, analyzing, and correlating data that people wouldn’t see ordinarily. This helps people improve outcomes. For example, in healthcare it can mean improving patients’ recovery times.
Enterprise IoT may be Big Data’s killer app, but ultimately it is still about people.