The Potential and Challenge of IoT Explained

The Potential and Challenge of IoT Explained

Are you tired of hearing about the Internet of Things (IoT)? From smart thermostats to fitness bracelets and voice-activated tech, this buzzword has invaded boardrooms and marketing departments, saturating online business media and social media.

Don’t let the hype wear you out. IoT has profound implications for the construction industry, industrial plants, manufacturers, and commercial and urban infrastructure. In 2016, there were 6.6 billion IoT devices. Business Insider predicts by 2021 that figure will increase to 22.5 billion. Gartner estimates that 5.5 million "new things" are being connected each day, and GE predicts investment in the Industrial Internet of Things is expected to top $60 trillion (including services) over the next 15 years.

Every organization, no matter how large or technologically savvy, can expect to be affected.

What does IoT mean again?

The true essence of IoT is capturing data and turning it into insights. An IoT network connects things to things and there are billions of THINGS!

In 1999, Kevin Ashton, who was working with MIT on radio frequency identification (RFID), wrote Internet of Things as a title on a PowerPoint presentation and unwittingly coined a buzzword.

But how do devices communicate? The classic IoT misunderstanding is the toaster talking to the fridge or the toaster talking to an app to tell you the toast is ready.

What IoT is really about is technology that can gather its own information and do something useful with that data.

So instead of the fridge telling you it's empty, it would automatically order some fresh broccoli that has since spoiled from your failed all-veggie diet.

What industries will IoT impact?

The future of the IoT depends on devices moving past the consumer market. Applications like smart street lighting that turns on only when people or vehicles are present, saving cities on their energy usage. In construction, applications could include an app alert that appears when a delivery truck is set to arrive, or when inventory is running low. In the industrial vertical, there are a whole host of applications, such as monitoring the performance and uptime of assembly lines.

And there are many others. McKinsey & Co. highlighted the nine most promising settings for IoT solutions:

  • Human – wearable devices, mostly for healthcare purposes
  • Homes – home controllers and security systems (smart homes)
  • Retail environments – stores, banks, restaurants, arenas, etc.
  • Offices – energy management and security in office buildings
  • Factories – optimize repetitive work routines from assembly lines to farms
  • Worksites – mining, oil and gas, construction, trucking, pipes
  • Vehicles – trucking and transportation, aircraft, ships, personal automobiles
  • Cities – public spaces and infrastructure in urban settings
  • Outside – optimizing and automating transportation (logistics routing, self driving cars, navigation)

The future of the IoT depends on devices moving past the consumer market. Things like smart lighting that turn on to help your autonomous car navigate across town and direct you to the nearest downtown parking spot so you can catch the live show on time is where the technology is headed.

Commercial potential for IoT

For IoT to reach its full potential, it will need to overcome infrastructure challenges. Chief among them is that the growing number of devices creates a whole lot of data, and a burden for networks everywhere. Security and privacy concerns aside, networks will need to be expanded and/or upgraded to push through the 8.6 zettabytes of IP traffic predicted by 2018.

One way to help support this need is the development of edge networks. Enterprises have traditionally invested in large, centralized data centers to quickly transport large amounts of data to users. But now enterprises are shifting to smaller, regional data centers in areas of high consumption to shorten the distance data must travel.

In other words, instead of having just one large hub that routes data to everyone, an enterprise network will use several regional or "edge" hubs that are closer to users and their devices. Think of edge networks as a high performance bridge to the cloud.

Netflix is a good example. The bandwidth-hungry streaming service has partnered with ISPs to bring content closer to the consumer. This reduces buffering and increases application performance. The same idea can be applied to IoT devices. By bringing the network closer to IoT devices, data can be collected and analyzed faster at the edge before being sent to the data center or cloud.

Even as edge networks evolve, the simple fact is that IoT devices are still in their infancy. With more commercial devices launching daily to help plants, buildings and cities run more efficiently, the sophistication of IoT applications will grow. Companies will need to develop the technical expertise to enable them, and design bigger, better and more reliable networks on which IoT applications can run.

Forbes Roundup Of Internet Of Things Forecasts And Market Estimates, 2016
McKinsey & Co. Executive Summary