What is the Internet of Things – and why does it matter?
The Internet of Things (IoT) at its core is simple. It’s about connecting “smart” devices, letting them talk to us, applications, and each other. The key is about data! All that data and automated use is designed to improve quality and make things more efficient.
The IoT is a network of physical devices, vehicles, buildings and other items embedded with electronics, software, sensors, and network connectivity that enables these objects to collect and exchange data.
It’s quite common for home heating and energy use. With smart meters it should means less energy usage and less cost. But IoT is more than just smart homes and connected appliances – it includes smart cities and Industry.
How will the IoT affect business and work?
Manufacturing and transportation are big users of IoT for organising tools, machines and people, and tracking where things are as well as providing lifecycle usage data to improve quality. Farmers are using connected sensors to monitor both crops and livestock to boost production and track the health of their herds. The examples are endless, and all we can predict is that connected devices will likely creep into most businesses, just the way computers and the Internet has.
Many people have smart watches or fitness bands on their wrists to track their steps or heartbeat but there are many other clever connected health ideas. Healthcare is one area where more data has the potential to save lives by preventing disease, monitoring it and by analysing it to create new treatments. Our health is also one of the most sensitive areas of our lives, so privacy and security are important.
What this means for telecommunications
The leading telecommunications vendors, i.e. Ericsson, Alcatel-Lucent and Cisco are very focused on the IoT. New Zealand service providers are also investing, and not just the two biggest, Spark and Vodafone. Kordia has announced a partnership with Thinxtra to focus on IoT and there are other smaller organisations like Kotahi.Net. They are developing technology, building infrastructure and creating services to embrace the connected world of the IoT.
Recent IDC research
According to IDC, IoT spending in the US will reach US$357 billion in 2019, up from US$232 billion this year.
“We see strong opportunities across many industries,” said Marcus Torchia, IoT Research Manager at IDC.
For example, in highly instrumented verticals like manufacturing and transportation, large data sets are used to optimize operational processes and extend the life of high capital cost assets. In other sectors like healthcare and consumer, IoT technology is being used to produce benefits that improve quality of life,”
The long term opportunity for IoT vendors is helping to identify and create immediate and residual benefits for end users through their technologies,”
IDC expects that manufacturing and transportation will be the two biggest industries for IoT investment this year, spending US$36 billion and US$25 billion respectively. Cross-industry investment, which represents IoT use cases common to all industries, such as smart buildings, for example, will see investment reach US$31 billion this year.
Remote health management, smart grid, and smart homes represent the next three largest IoT sectors. The fastest-growing sectors over the 2015-2019 forecast period are expected to be in-store contextual marketing, connected vehicles, and insurance telematics.