The Internet of Things has permeated nearly every industry sector, and it shows no signs of slowing down. We may be on the cusp of an era that some are dubbing Industry 4.0, but what will it look like in practice? In this article, we’ll take a look at the benefits and drawbacks of IoT in business and show how to get the most out of this technology without getting burned by the bad aspects of it as well.
What is IoT?
The Internet of Things (IoT) is a network or systems of interconnected objects able to collect and exchange data with one another. Think things like smartphones, Fitbits and smart thermostats. A few years ago you might have thought it was some crazy prediction for the future. Today we see it as a way to make our lives easier by connecting technology to almost anything we interact with on a daily basis. It’s already happening. In fact, there are more than 10 billion connected devices worldwide today! As an entrepreneur or business owner, if you aren’t thinking about how to incorporate IoT into your business strategy yet, now is a good time to start doing so.
According to a study by Cisco, M2M connections will account for nearly half of the total connections (48%) in the Connected Home category and grow fastest in the Connected Car category. Connected Home will take 48% of M2M connections by 2023 and connected car applications will grow 30% each year from 2018 to 2023. This can have a huge impact on businesses’ bottom lines. Machine-to-machine communication (M2M) is already being used in everything from smart cars to energy management.
The world’s top companies are already reaping dividends by implementing IoT solutions into their product or business models. In fact, as many as 70% of large companies are expecting ROI within five years, according to Forbes research cited by Dell Technologies. Better data also means better control over business costs that could lead to increased margins or lower prices for consumers.
There’s no getting around it—IoT is intimidating. Companies just starting out are worried about integrating new technology into their workflow and fear making mistakes. This can lead to paralysis by analysis. As such, businesses tend to create closed environments, where they connect devices but never integrate them with other applications or data sources. And because consumers aren’t clamouring for these technologies (at least not yet), companies don’t have a lot of incentive to push innovation forward.
This can be seen in simple industries like retail; smart stores have been available for years, but many continue to use clunky software solutions instead of investing in smarter tech for inventory tracking or other purposes. Despite all its promise, IoT is still far from mainstream adoption today.
And the ugly
What happens when companies take advantage of users to generate income? That’s what former Vice President Al Gore had to say at a conference on emerging technology. He explained that some tech giants have been secretly collecting data from smartphones without informing users. While it is estimated that these companies make more than $400 billion off user data, many individuals are completely unaware. Other privacy concerns with smartphones include web history tracking and advertisers using sensors for ad targeting purposes. Companies often collect information about us without our knowledge or consent—and we should be angry about it! The Internet of Things may make our lives easier, but as long as corporations continue to reap financial gains at consumers’ expense we’re not getting anything out of it.
The Internet of Things (IoT) is fundamentally changing how we do business. The breadth and depth of this technology has created both opportunities and challenges for organizations everywhere. Although it will take years to see all impacts, it is not too early to start preparing your business or organization for what’s coming next. You can expect more information about IoT technologies in upcoming posts. In our next post, we will explore some of these technologies and how they are impacting businesses today.