Over the weekend I read the Deloitte report The Derivative Effect: How Financial Services can make IoT Technology Pay Off – The Internet of Things in the Financial Services Industry. As i was reading the report I realised that i didn’t know enough of the basics. So i started reading around and as I did so, gathered some good and really interesting information about the Internet of Things. In this post i thought I would share some of the things i learnt about the Internet of Things or IoT…
1. What is the Internet of Things?
The Deloitte report refers to the Internet of Things (IoT) as “technology that connects objects (including people) to a network (such as the internet) in order to provide information about that objects condition, position or movement”.
Kevin Ashton the chap that coined the term “Internet of Things” in 1999 reflected on the dependence of computers on humans, which brought about inefficiencies. So that where Kevin introduced the idea of “empowering computers with their own means of gathering information, so they can see, hear and smell the world for themselves”.
The Internet of Things according to industry experts will have a transformative effect on just about everything!
2. The Underlying Concept….
Everyone is talking about the underlying technology behind bitcoin these days, and I’m trying to work that analogy into the Internet of Things. And failing!
Anyway Deloitte explain, referencing Kevin Ashton, that for the Internet of Things to make a direct impact there must be a thing that can be measured, and it has to be able to communicate.
3. How does the Internet of Things work?
In short, the Internet of Things depends on sensors of various types to monitor the thing. The thing can be anything and will likely be everything!
Deloitte believe that 2015 will see an increase of one billion wireless Internet of Things (IoT) devices resulting in an overall 2.8 billion devices – remember that in 205 alone!
The HBR highlights 3 components within the technology:
- The Physical component – the item being ‘connected’
- The Smart component – the sensor, microprocessor, data storage element
- Connectivity – the bit that exchanges information with the outside world about the physical component
4. A Couple of examples of IoT Technology:
- Wearable fitness bands that track your running distance, time….
- Electricity smart meters
- Smart parking – the real time monitoring of available parking spaces
- Traffic congestion
- Lights in your street that adjust according to time, weather, an event
- Tennis racquet – that delivers information about how you hit the ball
- Payment processing !!!
5. A Couple of benefits of the Internet of Things
The main benefits of the IoT can be realised by companies, according to the Deloitte TMT 2015 Report highlighting the example from the electricity industry:
- Cost savings – The installation of smart meters to read electricity usage remotely has resulted in £2 billion savings across the UK
- Insights – the ability to detect and pin point outages, problems, pollution and provide real time diagnosis
- Real Time Analytics – companies now have the ability to see peaks and troughs in demand and can adjust their processes/services to meet consumer demands
- The ability to connect multiple devices to suit your environment – see below…
- Marketing automation – as you’re walking down the street the IoT can send real time offers and coupons to your mobile device based on the shops around you
6. The IoT still has some way to go
Deloitte explain that the consumer (by this they mean you and I in our home lives) demand for Internet of Things devices will probably be prohibited by:
- It can go only go so far – for example, the IoT may be able to start your washing machine remotely, but it still needs somebody to put the soap in the machine and take the clothes out afterwards
- High costs – adding a ‘connected lighting kit’ to your front room will cost you about 8 times more than a conventional lighting kit
- Is the IoT really adding anything – opening your garage door or starting your car remotely – isn’t the good old remote control doing what it needs to? And significantly cheaper…
- Security and Privacy – in the grand scheme of things, the IoT is still relatively new and there are concerns about security and privacy – afterall the technology is able to reveal in depth information about you, your lifestyle and your home
Read the The Internet of Things Is Our Drunken Tech Binge post for some interesting information about the risks and security gaps that need to be addressed.
7. The IoT Is a BIG Deal
According to the Harvard Business Review over the last 50 years, we have seen information technology drastically disrupting competition and strategy:
- In the 1960s and 1970s, information technology automated some manual activities
- In the 1980s and 1990s, the internet connected and enabled global integration
- Now the Internet of Things will “change everything” through the way in which it will enable improvements in the functionality and performance of a variety of products
The recurring stat that a lot of articles refer to is from Gartner estimate that by 2020 there will be 25 billion connected things. The sheers numbers combined with the evolving technology is and will continue to be something will become an integral part of our daily lives.