The term “Internet of Things” isn’t new. Some say it was coined in 1999 by Kevin Ashton to describe a world where “things,” which can be devices or sensors, are both smart and connected — meaning they have the ability to collect and share data. The data coming from those devices and/or sensors then becomes a kind of currency, which can be combined and analyzed with other types of data to uncover insights that were, until recently, out of reach.
Although technology experts have quoted Moore’s Law, anticipating for decades the evolution of devices with embedded microchips, the proliferation of connected industry devices, and the rise of machine-to-machine communications, today we are seeing that the Internet of Things is at an inflection point. Consider the following:
- Costs are falling. The costs of the Internet of Things components such as microchips, cloud services, GPS devices, accelerometers, connectivity, and other technologies have fallen and are now within reach for most organizations. In addition, processing power is becoming more affordable, and cloud computing services are increasingly available, vastly expanding the capability to crunch very large data sets.
- Connected device demand is accelerating. As more companies and consumers realize the value of connected things, the market is swelling into the billions and beyond.
- Device options are expanding. Everything from light bulbs to washing machines to point-of-sale terminals is becoming connected — and connectivity options are expanding as well, whether it’s wired, wireless, Wi-Fi, Bluetooth, cellular, or something else. And components are becoming more powerful — tiny microchips are now capable not only of connectivity, but also of running advanced software.
- More machines are talking to each other. Machine-to-machine (M2M) solutions are going mainstream. Vodafone forecasts that 50% of companies will have adopted M2M communications technologies by 2020.
- Software is more advanced than ever. Today’s business software is putting high-level data analysis capabilities into the hands of companies around the globe.
- The economic benefits are significant. The Internet of Things has the potential to create economic impact of $2.7 trillion to $6.2 trillion annually by 2025, according to McKinsey Global Institute.
Collectively, these six factors are giving the IoT a foothold it hasn’t had in the past, allowing the concept to become a reality — and it’s a reality that’s already coming together.
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