Due to a fortunate combination of technological, economic and physical factors, 2014 will be an important year for the consumer and industrial Internet of Things.
This places us at the cusp of enormous consumer and industrial opportunities, making 2014 a key year for the IoT. Mainstream adoption of several industrial and consumer IoT products and technologies will drive increased connectivity, richer user experience, improved efficiencies and higher collaboration across the ecosystem. In an industrial context, the IoT enables the connectivity of intelligent devices to drive higher efficiency through better visibility, collaboration, automation and optimization, and drives the ecosystem's advantages of decision-making over a complex set of platforms.
According to GE, 46 percent of the global economy will benefit from the industrial Internet. Manufacturing contributes to 16 percent of the current global GDP, and the impact of the industrial Internet will reach beyond manufacturing and into different services sectors. And savings in industrial efficiency could range from $320–640 billion per annum. And while these numbers seem huge, they are not out of context. Every day, an incredible amount of waste happens in the current business systems due to suboptimal inventory planning, production, supply-chain and ordering systems. These could be improved or eliminated if intelligent devices and machines were to communicate with one another in a secure, real-time manner and make analytics-driven decisions.
Welcome to the Connected-Life Market
The IoT in a consumer context is even more fascinating. Consumer-oriented IoT products like smart watches, smart thermostats and home-security systems, smart white goods, and smart TVs and entertainment platforms are expected to have a fast adoption rate, with people embracing connected devices, and enriched user experiences, that address real-world situations. The low unit price point of many of these smart products is also a critical issue as adoption will suffer if consumers do not buy and use these smart products daily. And the more consumers use these smart products, the more data companies will have to improve subsequent devives and platforms. A Business Insider report says "the connected life market" will be a $2.5 trillion opportunity by 2020. In the near future, these IoT consumer products will be an integral part of our lives, much like smartphones are today.
Consumer IoT technology is taking the early lead, with a smorgasbord of products already on the market, and with consumer acceptance and adoption broadening every month. This is especially true with comparatively inexpensive endpoint devices like smart watches, fitness bracelets or other health-related wearable devices. Consumer devices with higher price points, like white goods and cars, will advance in acceptable as consumer confidence grows, prices come down, and services are developed the products to increase their utility.
Industrial IoT, on the other hand, is expected to follow the trend, but lag behind. The key reason for this slower growth is the required large financial investments, making business cases far more complicated and difficult to gain approval for. However, the industrial IoT will grow exponentially toward the later part of the next decade as businesses become convinced of its advantages.
Of course, the Internet of Things is not possible without the creation of new standards from industry leaders and extensive collaboration and cooperation between them. IoT development is currently fragmented, and while this is common for an emerging technology, the issue needs to be quickly addressed. In particular, IoT security regulations are essential to the technology's success. Connected devices, by the very nature of their operations, handle a lot of sensitive data. Robust security standards and protocols will be required to give customers the confidence to adopt IoT without worrying unduly about it. These not insubstantial variables will influence how fast we will see the intertwined futures promised by the consumer and industrial IoT. I, for one, can't wait.
About the Author
Sandeep Kishore is corporate vice president and global head of sales and practice for engineering and research and development services, HCL Technologies.
To read his previous article for CIO Insight, "The Approaching Era of Hyper-Personalization," click here.
This article was originally published on 04-10-2014