IoT—Internet of Things: Talk about a broad term. It’s like air—it’s everywhere, and everyone knows it’s important, but there’s no consistent way to discuss it.
Bill Cosby, back when he was associated with comedy, poked fun at the different perspectives of air. He said philosophy majors ponder why air exists, but physical education majors know that air exists to fill volleyballs, basketballs and footballs.
Clearly, it’s a matter of perspective, so let me attempt to organize the IoT opportunity into three containers: consumer, government and enterprise.
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The consumer stuff is going to be big, but dull. Yes, there will be some big developments in products such as thermostats and toothbrushes. I may even buy a few. But that’s not what excites me about IoT. The consumer sector will be limited for two reasons.
First, consumers are buying fewer things. Many of the products we used to buy are disappearing. CDs, records, DVDs, calculators, navigation systems, watches, radios and many other items are being absorbed into software or apps. Of course we still buy things, such as smartphones and earbuds, but overall we buy fewer of them.
Second, most of these connected devices have a gee-wow factor that lasts for about 1/72 of a product’s lifespan. Consider the LED lights that allow a user to adjust colors from a smartphone app. LED bulbs can last 25 years! During that time, smartphones change, kids grow up, homeowners change, Wi-Fi standards change and so on. These bulbs may spark some excitement today, but the thrill becomes baggage.
Case in point, owners seem to lose interest in Fitbits and smartwatches after just a few months. Not long ago these were consumer IoT category busters.
The government category is more interesting, but it’s mostly about safety and efficiency. The connected city will use IoT to monitor (and improve) traffic, air quality, noise, water quality, parking and much more. All told, IoT will reduce crime and improve safety, which adds up to achieving traditional government goals using new tools. It is important, but the scale and customers will ensure this sector evolves slowly.
The action is in enterprise IoT
However, it’s enterprise IoT where I expect to see most of the action and drama. Enterprises have the perfect storm—relatively speaking, they are operating in the dark, so they will generate a strong return that justifies IoT investments. That said, I believe enterprise IoT investments will equal the combined spend of government and consumer IoT investments.
Enterprises will use IoT in many ways. Robots are already heavily used in manufacturing, but that’s just the beginning. Amazon recently reported it has 45,000 robots across its fulfillment centers. That’s up 50 percent from last year. Robots will be used in construction, cooking, security and, of course, driving—if you consider autonomous vehicles as robots.
Even bigger than robots will be sensors that will become prevalent across enterprises. Enterprises spend a considerable amount of time and cost forecasting and guessing. The more data a business can collect about its operation, the more intelligent decisions it can make. Sensors measure thousands of attributes, such as light, motion, people, sound, location and moisture. Sensors continue to shrink in cost and size—even dust-sized sensors can now be embedded into coatings, planted, and sewn into clothing.
Walmart changed retail in the 1990s by tying its registers directly to inventory and ordering systems. IoT will make that accomplishment look like child’s play. Every industry is looking to IoT for game-changing approaches:
- The retail industry is evaluating all kinds of IoT technologies that span across advertising, point of sale, theft prevention and dynamic pricing. Big areas include self-checkout systems, video recognition systems and Bluetooth beacons.
- The oil industry will install sensors in drilling rigs, refineries, pipelines and gas pumps to achieve a full end-to-end, real-time view of its world.
- Healthcare is expected to see huge changes as it moves to embrace not only consumer technologies such as fitness trackers, but also new medical gear that enables patients to report home-based lab results.
- Agriculture is looking at connected farms that adjust practices based on microanalysis of moisture, crops, soil, prices, costs and weather.
- The insurance industry anticipates embracing usage-based and real-time performance monitors. Why should people pay the same price for insurance if the car is at home vs. in rush-hour traffic on the interstate?
In short, IoT will change how business gets done. Never before have these kinds of feedback loops been possible. IoT will give the modern enterprise unprecedented information about production, distribution and usage of its products and services—at least for the enterprises that embrace IoT—and that's not a matter of perspective.
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