Over three-quarters of companies are now actively exploring or using the Internet of Things (IoT), with the vast majority of business leaders believing it will have a meaningful impact on how their companies conduct business. Clearly, the the IoT is reaching a tipping point.
Although the concept of an Internet of Things has been around for at least a decade, the IoT is beginning to become an important action point for the global business community. As Clint Witchalls notes in a recent report sponsored by ARM, there is no doubt that IoT-related technology is already having a broad impact across the world. Although the precise effect is likely to vary by country and by company, it is hard to imagine any sector will be left untouched by rapidly evolving Internet of Things.
Kevin Ashton who originally coined the term the “Internet of Things” (IoT) in 1999 while working at Proctor & Gamble, points out that the recent “trickle” of IoT product releases is all part of a larger plan to test market appetite.
“We are trying to understand before we get in too deep, because once you are financially invested and committed you cease to become agile. Then you really have to start building on the thing you’ve already invested in,” Ashton explains. “In the early stages of technology deployment it’s a charitable act really to explore a new technology because the return on investment isn’t there, it’s too expensive and it’s too unknown. That’s where government has a role.”
Looking ahead, investment in the IoT should continue to increase as more and more senior executives move up the IoT learning curve. According to Witchalls, the costs associated with the IoT will continue to fall concurrently – just like any nascent technology. Indeed, a number of early adopters believe that the technology is already mature enough and cheap enough to make IoT products and services viable without the need for a big upfront investment, at least for initial trials.
“You don’t need a lot of R&D, it’s more about integration,” says Honbo Zhou, a director of China’s Haier. “Everyone can build it [into their products]. It’s just a matter of finding a business model that works.”
Meanwhile, Elgar Fleisch, the deputy dean of ETH Zürich, a science and technology university, says he believes IoT adoption will be quite different from what he dubs the “Internet of people revolution.”
During the first phase of the Internet, he maintains, anyone with a good idea and a computer could start an organization with global reach. However, Fleisch sees the initial advantage in the “IoT revolution” going mainly to bricks-and mortar organizations, especially large firms with many assets to track and monitor. Meaning, we are unlikely to see another Facebook, Yahoo or eBay.
“There will be winners and losers, but we are unlikely to see entirely new big players entering the market,” Fleisch opines.
Notwithstanding the significant involvement of the physical world of assets and products, the IoT is still expected to be a less visible revolution than the traditional Internet.
“PayPal, Groupon and YouTube are well-known Internet companies, yet few people are probably aware that the smart meter in their cellar means that their home is a part of the IoT,” writes Witchalls. “As organizations move towards the ‘productization’ of the IoT, there are signs that business leaders recognize that this need not be a major hindrance: undeveloped consumer awareness is not seen as one of the top obstacles to organizations using the IoT. After all, consumers will always want products and services that are better, cheaper, greener and more convenient.”
As Ashton notes, “Consumers are not going to demand the Internet of Things. Nobody is going to demand the underlying infrastructure.”
Rather, says Ashton, consumers will demand some value and benefit.
“They’re going to demand a security system that they can control from their smartphone. You don’t go to the end user and talk about the Internet of Things. You go to the end user to talk about benefits,” he adds.