Why the Internet of Things Could Be the Next Gold Mine

One trend is already earning headlines as the next massive gold mine: the Internet of Things. Here are our thoughts on why

Revolutions in technology are always fascinating to witness, and it’s exciting to try to predict where things will go. Currently, one trend is already earning headlines as the next massive gold mine: the Internet of Things.

What the Numbers Say

The McKinsey Global Institute recently published a study, and it predicts that by 2025, the Internet of Things will produce $4 trillion to $11 trillion in beneficial global economic activity — 11% of the world economy.

The report acknowledges that there is plenty of hype surrounding the Internet of Things, and their initial goal was to sift through that hype and find the truth. What they found was surprising: “Our central finding is that the hype may actually understate the full potential—but that capturing it will require an understanding of where real value can be created and a successful effort to address a set of systems issues, including interoperability.”

A Quick Tutorial on IoT

In case you need a brush-up on IoT (Internet of Things), the general principle is fairly simple: ordinary objects, everything from toothbrushes to ovens, are given digital networking capability so they can communicate with other devices and adapt to your preferences in remarkable ways.

As Business Etc writes: “IoT is where machines and devices can talk to each other to carry out actions without human input. By using WiFi or 3G/4G, sensors and software, they can exchange information with each other improving their usefulness and efficiency.”

The adjective “smart” seems to be the buzzword for an IoT object. When your fridge or tennis racket is suddenly a smart fridge or a smart tennis racket, you’ve usually entered the IoT world. Many of the devices we use today — some very obvious — are already in the IoT domain: smartphones, computers, your new smart TV, smart thermostats, and smart homes; but the connectivity is still limited.

The end-goal of IoT is for all objects to be able to interact and communicate in tandem with a common language. As one author gives for example: “Your car could tell your thermostat you’re on the way home so it would warm the house up for your arrival.”

IoT: Just a Self-Important Cure to First-World Problems or Is It Something Actually Significant?

Many people have found the declarations of IoT promoters to be over-dramatic. They see IoT as a sad commentary on Western society’s obsession with trivial comforts when there are much bigger problems to solve. To some, IoT feels like the culmination of modern society’s addiction to laziness and its obsession with luxury and instant gratification. To others, IoT just seems unnecessary.

The Atlantic, for example, published an article recently about an IoT product called GasWatch:

“Like many of the apps-and-devices that exemplify the trend known as the Internet of Things, GasWatch bills itself as nothing short of a miracle cure for a supposedly harrowing first-world problem. ‘Peace of mind,’ the Indiegogo campaign offers.

After all, GasWatch insures you never have to worry about propane again! ‘You won’t have to run to the store and get another tank in the middle of an event,’ they promise. ‘No need to take up additional space by storing an expensive spare tank,’ they assuage. It makes you wonder what we did before the Internet of Things came along to rescue us.

Except, it doesn’t. The truth is, there’s scarcely little that’s new about GasWatch at all. If you want to know how much gas is left in your standard-size, 20-pound propane tank, you’ve had a number of options for as long as there have been propane tanks.”

The writer then lists off a number of very simple solutions to the gas problem that cost nothing and require only a little know-how.

Preston Gralla of Computer World takes the complaint about IoT’s self-importance to another level: he explains why IoT could actually be an utter nightmare once it reaches its fruition of total connectivity to all the objects that surround us. He takes us through an example in which a simple attempt to connect his printer to a few “smart” IoT devices after getting a new WIFI router devolved into a hair-pulling nightmare:

“Now imagine this same scenario in the age of the IoT. You replace an old router with a new one. Your refrigerator, oven, microwave, light bulbs, heating system, air conditioner, door locks, security system, and even your toothbrushes (yes, there are already network-connected toothbrushes) were all connected to your old network. Now you need to connect them to your new one. Their Internet connections will certainly be afterthoughts, with little attention paid to help people troubleshoot them. There will be no common operating system for them, no standard way to connect and disconnect. After all, if engineers can’t even make it easy to connect a printer designed to work on a network, how easy do you think it will be to connect your stove?”

In other words,from Gralla’s point of view, you will need to be a skilled director of IT for your home just to brush your teeth. Who wants that?

The Real Value of IoT

However, the true value of IoT is not seen until you look beyond the home and beyond those little first-world problems that we love our gadgets to solve that are (frankly) trivial in the big picture.

The immense value of IoT will be discovered in the way major industries — e.g. transportation, energy, agriculture, public safety, disaster management, homeland defense, etc. — make their field operations smarter and more effective.

Take vehicles, for example. Business Etc says this about what lies in the future:

“…the real potential is what happens beyond the home. For example, one of the major areas looked at right now are vehicles. The majority of cars are left stationary and have enough energy to run different functions while they’re in this state…Some of the potential uses include using [cars] as WiFi hotspots, or an emergency response service where sensors [in cars] will activate when it senses an accident or gas leak and alerts the relevant authorities. Other cars could communicate with each other and share this info, giving authorities a better idea of the situation.”

Here are a few other possible uses for IoT:

  • manufacturing devices communicating with each other across great distances in large plants to enhance and streamline operations and monitoring
  • farmers using IoT devices to monitor livestock, crops, and growing conditions (soil, temperature, humidity, etc.)
  • oil companies using IoT to better monitor oil rigs and pipelines across vast distances

As Business Etc says: “the real question isn’t what areas it will impact, it’s what areas won’t be affected by this development.”

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