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What is Internet of Things (IoT) And How Does It Impact You?

What is Internet of Things (IoT) And How Does It Impact You?

The term ‘IoT’ was first used in 2006, but it was only in the past couple of years that we started to see the real benefits of this connected world. The internet allows us to do business globally, access information and stay connected with others, and IoT extends that by allowing us to do all of those things on smart devices that we carry around with us all the time.

The Internet of things (IoT) is a phrase used to describe the internet working together with everyday physical objects, colloquially referred to as ‘smart things’. In practice, this can mean connecting all sorts of devices and gizmos (e.g. phones, tablets, etc.) to the web via Wi-Fi or Bluetooth—as well as the traditional computers, laptops, and servers.

But what does that mean practically? Let’s take a look.

The Rise Of The ‘IoT Industry’

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Certainly, one of the hallmarks of the ‘IoT era’ has been the explosive growth of small and mid-sized businesses in the space. According to the research firm, Research and Markets, the worldwide market value of IoT products and services is projected to hit nearly US$16 billion by next year.

The lion’s share of this revenue—$13.9 billion—is forecast to come from within the telecom sector. That’s due mainly to the fact that telecom providers have been driving the industry forward, with some notable early entrants setting the standard for what would come to be known as the ‘IoT industry’.

For instance, in 2012, Cisco Systems purchased a company called Object Labs for a whopping US$16.7 billion to get a leg up on the competition. After the acquisition, Cisco Systems launched several products specifically designed for use within the IoT ecosystem. Some of these IoT-focused products include the CCTV-3100, the Multi-Point Control Unit (MCU)—used to control up to 100 security cameras from a single dashboard—and the NetWorker 8300, a dedicated firewall for IoT networks.

Why Are Telecom Providers In Demand?

According to Gartner, Inc., a research and advisory firm specializing in information technology, at least 25% of a manufacturer’s revenue in the coming year will come from the sale of IoT devices and services.

If you take a look at any technology marketplace, you’ll see that IoT devices tend to be the bread and butter of early-stage manufacturers, whereas major firms tend to stay far removed from this space, preferring to focus on developing and selling software or servers to enterprises.

Yet, the demand for IoT-oriented products from enterprise-level vendors is expected to more than double in the next three years.

IoT And The Cloud

What is Internet of Things (IoT) And How Does It Impact You?

The cloud is now a central part of our digital landscape. Indeed, according to Gartner, over 90% of IoT product and service revenues are anticipated to come from products and services sold as a cloud-based offering.

But what exactly does that mean in practice? Let’s look at some examples.

Take the case of Salesforce.com, the enterprise software company with over 285 million registered users. Last year alone, Salesforce.com’s IoT revenue was $12.8 billion and is anticipated to hit $16.9 billion by next year.

So how exactly is Salesforce.com making money off IoT?

Well, the answer is quite simple: by offering their platform as a cloud service. With the IoT, all you need to have is a device (e.g. a smartphone, tablet, or computer) and a Wi-Fi or Bluetooth connection. Then, you can log in to the internet and download the Salesforce.com app. Once you’re within the app, you can connect with the company’s vast catalogue of IoT products (e.g. smart thermostats, water sensors, security cameras, etc.).

The Impact Of IoT On Enterprise

The fact that the cloud is available on all sorts of devices means that remote offices, home offices, and even some meeting rooms now can take part in real-time collaboration.

Consider the case of DocuSign, a multinational firm specializing in electronic signature solutions. Last year, DocuSign’s IoT revenue was $1.7 billion and is projected to grow to $2.3 billion by next year.

As with many other technology giants, DocuSign makes its money primarily from enterprise software sales. Yet, in the coming years, the company expects that nearly all of its revenue will come from IoT products and services.

The Growing Ecosystem Of The IoT

In addition to the major vendors we’ve discussed so far, several smaller firms specialize in the IoT, providing everything from specialized software to complete end-to-end solutions.

What are the Benefits of the Internet of Things

IoT has numerous benefits and although not all of them will apply to every business sector, it’s worth looking into what each of them means to you.

Connected World

The world is now truly ‘connected’ with billions of sensors transmitting data and interacting with other devices worldwide. In the retail industry alone, there are over 200 variables that could be tracked and monitored using IoT technologies, from products being purchased to how long customers spend in physical stores to whether they recommend a particular store to others. With the ability to analyze this huge amount of data, companies can make better business decisions and identify consumer behaviour patterns that they can address with customized marketing campaigns or product updates.

Businesses that utilize IoT technologies can increase their productivity, cut costs, and gain valuable insights into their customers’ behaviour. Many traditional businesses such as retail, travel, and utilities have also recognized the benefits of IoT and are investing in this space, with many expecting to see a return on their investment within a few years.

Product Research

IoT provides a level of transparency into the products that consumers purchase. With the ability to track a product’s every move, from the moment it is manufactured to when it is finally consumed, companies can find new ways to improve existing products and develop new ones.

If a company already can track the inbound products that enter their warehouses, they can easily expand that to include outbound products that leave their warehouses. The possibilities for product research are endless and although this may seem like a labour-intensive process to some, the advantages of better understanding your customers’ needs, wants, and behaviour outweighs the costs of gathering this data manually.

Customer Research

Thanks to the internet and the capabilities of IoT devices, companies can now gather valuable information about their customers without leaving their offices. By connecting these devices to the internet, businesses can remotely access their customer’s information, including their email addresses, phone numbers, and other relevant data points.

This allows businesses to personalize their interactions with customers, providing valuable information about them, their requirements, and their opinions. This research can be conducted via automated surveys, which will allow businesses to gain a better understanding of their target audience and the changes needed to retain them as customers. In addition to gaining valuable information about their customers, businesses can also use IoT to gain valuable information about the products that they sell.

As more and more businesses adopt IoT technologies, the ability to gather customer research will only increase. The key is to be able to analyze the information that you’ve gathered and use it to improve your processes and create better products for your customers.

Real-Time Data

Whether your industry is retail, travel, or manufacturing, IoT provides you with real-time data that you can analyze and act upon. In the world of retail, for example, you can track inventory levels, identify out-of-stock, and follow what products consumers are buying or avoiding, all from the comfort of your smartphone.

If you sell clothing, you can monitor the weather conditions in various parts of the world that affect the fabrics that you use to make your clothes and find trends that will allow you to be more agile in your designs. If you sell industrial equipment, you can keep track of the number of pieces sold, identify which models are performing best, and make better business decisions about which products to invest in and which ones to scrap.

The opportunities for real-time data collection and analysis are endless and although some industries may see this part of IoT as being labour-intensive, the ability to cut down on costs and increase productivity far outweighs the initial setup cost of collecting this data.

Saves Money

Thanks to the increased capabilities of IoT devices, the cost of collecting this data has decreased significantly, allowing businesses to save a vast amount of money that they would’ve otherwise spent on manual labour. The opportunities for money saving are endless, from cutting down on the paper that your businesses use to store data to increasing the overall efficiency of your business process, leading to increased productivity and lower costs.

Productivity

Productivity is a key factor in any business, but especially in today’s world where the ability to work remotely plays a crucial role in remaining relevant and productive. Thanks to tools such as IoT, businesses can conduct all of their operations on the go, removing the need to stop and work on their laptops or desktops. Smartphones and other internet-enabled devices allow businesses to access products and information remotely, providing them with unprecedented levels of productivity.

IoT removes the need for businesses to be located in one place, cutting down on the distance that they have to travel and the costs associated with doing business globally. Productivity improves the ability to serve customers more efficiently, gain new customers, and decrease office overhead costs. All of this leads to increased profitability and the ability to reduce income tax bills.

Innovation

Innovation is the lifeblood of any business. Without it, your products may become obsolete quickly and you’ll be unable to justify the cost of continuing to purchase new equipment and hire new employees. Product innovation is all about creating new products that are better than those before it, identifying needs and wants that weren’t previously met and taking advantage of the internet to let people know about your new product.

IoT provides new outlets for businesses to conduct product research and development, as well as generate new ideas and concepts. In the early stages of your product’s design process, you’ll need to gather as much input as possible, whether that’s from customers, colleagues, or even the general public, using the internet to conduct surveys and gather feedback.

To develop new products using IoT, you’ll need talented people who are comfortable working remotely. You can attract and retain top talent by paying them what they’re worth and providing them with the necessary tools to do their jobs. Innovation improves the overall quality of your products and services, driving increased customer satisfaction and the ability to retain existing customers, as well as gain new ones.

The list of benefits of IoT is endless, from being able to track inventory and cut down on unnecessary office space to identifying trends, customer needs, and behaviour, all of which can be applied to virtually any industry.

What Are the Problems of the Internet of Things

IoT is the interplay of people, processes, and technologies that connect and interconnect physical objects and information via the internet.

Conceptually, it is often considered to be a massive simplification of technology. However, the real problems with the IoT lie not in the concept, but in the practice.

Problems Inherent in All Technology

All technology is built on top of a series of assumptions, concepts, and principles, which are, in turn, based on previous technologies which are also subject to their limitations.

Simply put, there is no such thing as a perfect or perfect tool. Even a tool made of the finest materials will eventually break down, wear out, or require regular maintenance.

Complexity

Complexity is, in a nutshell, the difficulty in using or understanding a system or technology. The more complex a system is, the more difficult it is to use or understand. This is regardless of your skill level.

Using a GPS in a vehicle is fairly easy. You just need to know how to program it and input the right coordinates. Similarly, using a light bulb that automatically turns on when the sun goes down is fairly easy. You just need to follow the instructions and set the time.

However, using a thermostat to automatically adjust the temperature in your house based on your energy usage is considerably more complex. Furthermore, if you want your home to be energy-independent – which is the case with most modern homes – you have to look into investing in a whole-home automated system that integrates everything from the lights to the temperature to the fan speed and water supply. The simpler the concept behind technology, the more complex it usually is in practice.

Expensiveness

The expense of a technology is usually considered regarding its cost and its value. The cost of a technology is usually a measure of how much it costs to acquire and maintain. The value of a technology is usually considered to be the time and money it saves you throughout its lifetime. For example, a low-cost flashlight is inexpensive but has little value and requires constant maintenance, while a high-end laser pointer can save you a lot of time and is very valuable.

The expense of IoT relates mainly to the fact that it requires a lot of wiring and digital infrastructure to support it. To truly reap the benefits of IoT, you will have to invest in several computers, networking hardware, and mobile broadband. The more you invest in IoT, the more you will save.

Training

Training relates to the difficulty in using or understanding a system or technology. To use IoT, you will have to learn a whole new set of tools and techniques, as well as how to troubleshoot and maintain the device. In some cases, this can be fairly overwhelming and require a lot of time and effort. In others, it can be quite the opposite and make the technology simpler to use.

Unreliability

The reliability of technology measures the amount of time you can be expected to use it without major malfunction. For example, a microwave is considered to be a very reliable product, as you will usually only need to program it once and then it will operate perfectly for the rest of its life. Similarly, a smartphone is generally considered to be a very reliable product, as you will usually only need to update it once every year or so to keep it running smoothly. On the other hand, an LED light bulb has a very low-reliability rating, as it requires constant maintenance and has a very short lifespan. As a general rule of thumb, the simpler the device, the more unreliable it usually is.

Security

The security of technology measures the ease with which a person or computer can gain access to or control technology. In the case of IoT, this usually means physical security, such as the locking mechanism on a cabinet or the security codes on a smartphone.

Maintenance

The maintenance of technology measures the amount of time and effort it takes to keep it functioning properly. In the case of IoT, this mainly relates to replacing components that over time will malfunction or break down.

Up-time

Up-time measures the amount of time technology is available for use without major interruptions. For example, a microwave oven that shuts down after every use due to overheating has an up-time rating of only 50%, as it takes half its life to restore it to optimal operating conditions. In some cases, this can be rather frustrating and require you to get in there and troubleshoot it immediately, while in others it can be a major pain, especially if you need to make multiple stops to ensure the computer or appliance is not frozen during this time.

Size

Size usually measures the amount of physical space necessary to contain or use technology. For example, a refrigerator has a rather small size when you compare it to a chest freezer or a walk-in pantry, even though it does the same job as the latter two. Furthermore, the physical size of technology directly relates to the amount of infrastructure and wiring necessary to support it.

The problems with the IoT are numerous and are the direct result of the interplay of all the principles, concepts, and assumptions described above. Essentially, the more you invest in IoT, the more you will save, but also the more you will have to spend on maintenance and training. Fortunately, these are all fixable problems and with a little bit of planning and research, you will be able to overcome them all and live happily ever after. So, what are the problems of the IoT?

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