The fast-changing hyper-connected world of today is entering into a new phase of the digital era bringing transformation and excitement. We live and work in a rapidly changing environment. There are no isolated actions, no singular events, everything is interconnected. An immense amount of data is being generated, gathered, processed and distributed. The data has become organizations’ most valuable asset and the essential element in the IoT systems.
- Fact 1: The projection of over 30 billion installed end-point devices integrated with IoT ecosystems worldwide by 2020 are making this technology one of the most debated topics.
If in 1990 through a squeaky dial-up connection the internet could connect over 1 billion users, in 2000 the mobile wave made possible for 2 billion users to find information, keep in touch with friends around the world, and watch videos.
Now, the Internet of Things has the potential of connecting 10 times more (28 billion) devices to the internet–from cars to bracelets–by 2020.
Almost every industry invests in IoT and all of the leading industries are quickly moving to implement IoT solutions. In this constellation of things, IoT is becoming one of the primary drivers of digital transformation. As for the numbers depicting its market impact, they are astonishing.
- Fact 2: It’s a $737 (EUR 636,5) billion market, reaching $1.3 (EUR1,1) trillion by 2020 ”- IDC, January 2017
- Fact 3: IoT has a total potential economic impact of $3.9 (EUR 3,36) trillion to $11.1 (EUR 9,58) trillion a year by 2025. -“Unlocking the potential of Internet of Things,” McKinsey Company Digital, June 2015
- Fact 4: The total global economic value of IoT technology could be as much as $6.2 (EUR 5,35) trillion by 2025 -“How the Internet of Things Market Will Grow,” Business Insider, October 2014
- Fact 5: IoT market expenditures are growing by 27% annually through 2018 - “The Internet of Things: Sizing Up the Opportunity,” McKinsey Global Institute, December 2014
But as impressive as those and many other related statistics may be, they only scratch the surface of the exciting opportunity and potential benefits for businesses, public institutions, and citizens around the world. That’s because IoT is a new way to deliver technology outside of the data center or other computing loci to operating points where it can do the most good.
Just to make things clear, the IoT is not merely a sensor or equipment, but a communication-based eco-system in which variety of physical devices such as cameras, product counters, a rate of sales and industrial sensors communicate with cloud-based processes. The result is displayed on a digital screen and it's used for an optimized operation of an industrial process, resulting in unique operating and financial benefits, adding level of digital intelligence to devices that would be otherwise plain, enabling them to communicate between each other without human to be involved, merging digital and physical worlds.
However, not all connected devices are IoT. This may seem a little bit too complicated especially form consumer’s perspective.
See also: IoT VS IIoT differences you must know
What is an example of an Internet of Things device?
There are many examples in the world for IoT consumer solutions, starting from lightbulbs that can be switched on using a smartphone app, to a motion sensor or smart thermostat in your office or a connected streetlight. IoT solutions can also be as serious as a driverless truck, or as complicated as air filters in a production facility that's now filled with thousands of sensors collecting and transmitting data back to make sure it is operating efficiently. At an even bigger scale, smart cities projects are filling entire regions with sensors to help us understand, control and improve the environment we live in.
The IoT and ROI
US municipality has implemented smart meter monitoring for all the town’s residential and commercial water meters. The project involved placing water meter sensors on 66,000 devices that used to be manually read and recorded. The outcome: data collection process from labor intense become digital reading of one meter, with automatically recorded and transmitted to a central database. This saved a lot of money, both in work-hours and in field equipment, such as trucks. The billing and management teams have shifted from an internal reporting organization to a customer-facing hub that provides residents better experience. The town is projecting a total savings of $28 million and a net savings of approximately $10 million over the lifetime of the initiative.
A US oil and gas company is optimizing oilfield production with IoT, using sensors to measure and monitor oil extraction rates, temperatures, well pressure for 21,000 wells. The result is reduced downtime and increased production levels. Ultimately, the company can take this information and disseminate it to field crews to make adjustments or repairs. The company estimates that it loses $500 for every hour that a single oil well is not in operation. After analyzing the initial impacts of sensor deployment, the organization estimates that quicker oil well repairs saves approximately $145,000 in cost avoidance per month per field.
The international truck manufacturer created a new revenue stream by outfitting 100,000 trucks with sensors for predictive maintenance. Sensors in the trucks, combined with predictive models, detect when a mechanical failure is likely to occur. Further, the system is optimized to place orders and ships the appropriate parts to the identified service center, and then notifies technicians about what needs to be fixed. The result is an interconnected web of sensors and operational systems that communicate to save time and money across the operation.
Ultimately, two things are clear: The IoT is here to stay, and its economic impact will be significant. The term itself as we know it, will most probably evolve into another term: Internet of Transformation - which will become the new normal, a norm that will symbolize the everyday life, before becoming the Internet of Today, defining the interconnected and digital society where we live in today.
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