Most of us have seen the commercials. Microsoft, Intel, Cisco, IBM (and many others) – all touting the benefits of the brave new world of ubiquitous computing (A.K.A The Internet of Things, or The Internet of Everything). A world where everything from the appliances in your home to the city you live in are now ‘smart’; interconnected in ways never before imagined, unlocking experiences and insights once thought relegated to the world of science fiction.
Yet for many consumers these notions still remain Jetson-esque – tomorrow’s ever-elusive promise of flying cars, jetpacks, and wise-cracking robot maids. But the times they are a changin’. Advances in wearable technology (e.g. Jawbone Up, Apple Watch), connected cars and home appliances (e.g. Nest thermostats) have begun to inject Internet of Things’ concepts into the consumer mass consciousness.
And, this is just the beginning.
What is the Internet of Things?
Despite these inroads, confusion persists regarding the Internet of Things (IoT) among both consumers and business. A study by SOASTA found nearly three of four (73%) of US adults were unfamiliar with the IoT. While not even half of the global IoT Decision Makers surveyed in the U.S. (43%) are familiar with the concept of IoT.
At the most basic level, the Internet of Things is a network of systems, platforms, applications, and physical objects that contain embedded technology to communicate and share data with each other, the external environment and with users. This can be anything from refrigerators, thermostats, TV’s or toothbrushes; if you have something that is marketed as ‘smart’, it is part of the internet of things.
To simplify further; The Internet of Things refers to objects that can…
1. Transmit and/or receive data (and)
2. Operate without direct human interaction.
In many instances these gadgets collect data about how you use them and help you make lifestyle improvements along the way. For example, a tennis racket or golf club with an embedded sensor to determine how you swing and why you keep hitting the ball poorly.
Some household items are already connected. Samsung already offers a connected refrigerator which tweets and plays music from Pandora. The Nest thermostat (acquired by Google for $3.2 Billion) is another recent entrant to the market. Nest learns your preferences and cools or warms your house automatically. The goal eventually is for these objects to all work together for a fully connected, or ‘Smart’ home / work / life.
Just How Big is the Internet of Things?
In a word? BIG. In fact, in 2008 the number of connected devices surpassed the number of people on the planet. And, growth is accelerating…
Just how pervasive this next wave of technology may be is still a matter of much debate, but the outlook is bright. Analyst estimates of the number of connected devices in 2020 range from 31 to 80 Billion (yes that’s billion with a ‘B’) devices. This means that there will be between 4 and 10 connected devices for each of the estimated 7.7 billion men, women, and children on the planet, in a mere 5 years’ time.
The looming ubiquity of these devices represent significant economic implications, to the tune of over $7 trillion in estimated IoT revenue in 2020. The greatest impact is expected to be felt in the Asia Pacific region as rising Asian populations, influence, and purchasing power is expected to result in $2.6 trillion in revenue.
While $7 trillion may seem outlandish to some, other analysts are even more bullish in their predictions. Cisco Systems predicts $19 trillion in new revenue (private sector accounts for $14.4 trillion) within the greater IoT market by 2022.
Consumers: Crazed & Confused
While consumers may not totally understand the IoT, there are certain use cases which have them intrigued.
In a recent survey by SOASTA, consumers were asked to identify the IoT technologies they are most looking forward to. It should come as no surprise that the top two most anticipated technology use cases which consumers are clamoring for are those they interact with every day: Connected Cars and Smart Home Appliances. For many consumers these use cases may still seem futuristic, but in reality the future is much closer than they imagine.
For instance, within two years (2017) 90% of all Samsung products will be IoT enabled, by 2020 100% will be connected. At the same time, consumers can expect to see an estimated 250 Million connected cars on the road.
What’s The Catch: Interoperability, Security & Privacy
There are some challenges to having a fully connected life. For instance, what happens when your Samsung fridge can’t speak to your Sony TV (both companies are working on proprietary platforms), and your Belkin coffee maker is giving the silent treatment to your HEX3 alarm clock? Major other consumer concerns are privacy and security; for instance could a user’s home be infected by a virus? Can a user’s car be hijacked mid-drive? And, who owns a user’s data?
A recent survey by Survey Sampling International regarding consumer security concerns highlights the gap between corporate efforts and consumer perceptions of digital security. Only 18% of respondents feel companies do enough to protect digital privacy, a further 52% of respondents felt companies somewhat protect their digital privacy but would like it to be more easily communicated. Clearly increased efforts by corporations are required to not only ensure adequate digital security, but to clearly communicate those protections to consumers.
Are Organizations Ready?
Consumers have a right to be concerned; woefully few organizations actually appear ready for the IoT world. While a study by IDC confirms that a majority (60%) of Global IoT Decision Makers acknowledge the strategic importance of IoT to their organizations, an Accenture study reveals 88% of market leaders say they do not understand the underlying business models and long term implications of the IoT.
In looking deeper, one of the most oft cited consumer concerns remains security/privacy, and in this case it does not appear organizations are any more prepared.
In a recent study concerning IoT security by Atomic Research, a mere 24% of UK and US retail executives surveyed believe IoT devices on their company networks are 100% protected. Furthermore when asked about the security of specific IoT device categories (e.g. POS devices vs. Smart Appliances) over a third (34%) of respondents indicated no confidence in the secure configuration of any IoT devices on their networks.
While the inability to properly secure IoT devices is a huge problem in and of itself, what’s more troubling is nearly half (49%) of U.S. and UK retail executives surveyed are unable to effectively communicate the security risks of IoT devices to corporate managers. If organizations can’t even communicate the problem effectively internally how challenging will it be to develop a successful solution? How are consumers expected to have faith in those IoT products and services?
Act Now or Forever Hold Your Peace
Despite the strenuous nature of these challenges, erudite organizations know that in order to get their share of the $7 Trillion+ IoT market they cannot afford to be timid in their strategy and approach. Organizations best able to identify, market and capitalize on the opportunities presented by this brave new connected world will be those reaping the benefits of a more personalized economy powered by a happier, healthier and more informed population.
The adoption of the IoT is being enabled by the improved availability and affordability of sensors, processors and other technologies that have helped facilitate capture of and access to real-time information.
Future articles in this series will continue to explore the development and proliferation of the Internet of Things; how the IoT will impact various industries (from Agriculture to Zoology), consumer use cases (Wearable Technology, Home Automation), and much more, stay tuned!