If you were to judge the Internet of Things (IoT) relative to some of the expectations and figures that have been publicized over the years, it might be fair to categorize the much-hyped "third industrial revolution" as a bit of a letdown thus far.
Cisco (NASDAQ: CSCO) published a report in 2013 suggesting that this emerging explosion of connected devices and data usage would generate somewhere around $14.4 trillion in additional economic value in the private sector by the end of 2022. Cisco's projection took wide-ranging effects into account, and it's difficult to get a read on just how much economic impact the potential new tech paradigm has generated since then. But even with a dramatic acceleration in IoT tech capabilities and adoption over the next few years, it looks like that estimate was off the mark.
A combination of overly optimistic predictions, some disappointing consumer-level products, and wide-eyed evangelism from tech companies and media outlets helped turn the "Internet of Things" into a phrase that now elicits eye rolls from some investors and analysts. It might even be tempting to write the whole thing off. There are a range of reasons that the potential paradigm shift is falling short of targets from previous years, but it would be a mistake to think that a revolution in connected-device and data technology isn't on the way.
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IoT has very strong enterprise support
The fact that adoption of IoT technologies and services have fallen short of some of the more ambitious targets hasn't done much to shake enterprise confidence in its significance. A survey by AT&T (NYSE: T) in 2017 found that 96% of large enterprises think that the IoT will play a key role in monitoring and controlling their physical assets, and that 67% were already developing applications for new connectivity and analytics technology. Earlier this year, a survey from TechRepublic Premium found that 82% of industrial professionals had already implemented IoT applications, were running trial projects, or were considering making a move in the space in the near future.
Confidence that the Internet of Things will eventually live up to the hype is also evident in a wide range of acquisitions. Cisco specifically has been on a multibillion-dollar acquisition push in recent years and appears largely undeterred by slower-than-projected adoption for IoT technologies. The company has tapped into its sizable cash pile to purchase businesses that specialize in fields including analytics, device-management platforms, low-power wide-area networks, and data security services -- and an IoT component is the one thread that ties most of its recent big buys together.
IoT connectivity grows every day, and will likely accelerate
A report from Strategy Analytics suggests that there were 22 billion active internet-connected devices at the end of 2018 -- up from roughly 15 billion in 2015. The report projects that the total connected-device count will rise to 38.6 billion in 2025 and go on to hit 50 billion in 2030. This survey includes smartphones and PCs, but the vast majority of growth through the end of its study period is projected to come from categories like enterprise IoT connections and smart-home devices.
Narrowing in specifically on Internet of Things devices, a report from IoT Analytics suggests that there were 7 billion active IoT devices in 2018. The researcher projects that this figure will rise to 10 billion in 2020 and 21.5 billion by the end of 2025.
Calculations for the current number of overall connected devices and IoT-specific devices still vary a good deal, as do projections for their respective growth outlooks, but the overall trend is clear. While falling short of the more optimistic targets, there's been impressive growth for the number of connected IoT devices, and most projections expect growth to accelerate. The connectivity trend is already leading to an explosion of new data, with the wireless communications industry association CTIA reporting that IoT devices played a substantial role in U.S. mobile internet usage growing 82% in 2018.
Growth for connected IoT devices hasn't necessarily corresponded with big sales booms yet. But there are product and service categories where new connections are having a notable impact, with signs that these offerings will continue to see rapid adoption. For example, Lexus and Toyota partnered with AT&T to include 4G LTE connectivity capabilities in all of their 2020-model cars and trucks. And the benefits of having a vehicle connected to the cloud should become even more pronounced with the rollout of 5G network technology. Allied Market Research expects the global connected-vehicle market to be worth $225.16 billion in 2025, up from $63.03 billion in 2017.
Sensors will evolve far beyond their current capabilities
The true value of the Internet of Things lies in the data that will be produced and utilized, and much of that will be captured through function-specific sensors. These will be smaller and smaller and outfitted with capabilities that far exceed what's possible today. The devices could be smaller than a grain of sand and be able to generate visual, auditory, and atmospheric readings among a wide range of other data. Microelectromechanical systems (MEMS), or "smart dust," could be inserted into the human body or scattered throughout agricultural sites to provide real-time readings that are uploaded to the cloud, analyzed, and used to inform responses.
This technology can be expected to create a wide range of opportunities that are difficult to fully imagine, and they will also be accompanied by new ethical issues and potential for abuse that must be met with effective and well-directed oversight. The explosion of data and new capabilities stemming from MEMS will bring a wide range of new security threats.
Science fiction technologies like smart dust might seem far off, and IoT as a whole is still a relatively new trend, so it might be dangerously easy to dismiss the implications. The rapid evolution of sensor technology not only could create advanced monitoring that leads to dramatic advances in fields like healthcare, agriculture, and manufacturing; it also has troubling potential for misuse.
As with other areas of the IoT, evolving capabilities and expanded adoption of sensor technologies -- and MEMS in particular -- can be expected to create a range of issues that require stronger tech security industries to meet shifting threats.
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