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The thing about things is...

The exact number of “things” connecting to the Internet has been the subject of predictions for some time now. Research giant Gartner suggests 20.8 billion devices will connect by 2020 while Cisco and Frost & Sullivan agree that number is more like 50 billion.

The potential revenue stream of IoT is also subject to a lively debate. IDC predicts IoT spending will reach nearly $1.3 trillion in 2015 while Business Insider believes $6 trillion will be spent on IoT solutions in the next five years. In yet another generous guestimate, Cisco says the technologies and their associated services will create $14.4 trillion for companies by 2022. (Business Insider says $600 billion by 2019 while IDC believes revenue will exceed $7 trillion by 2020.) We think it’s like asking the value that the Internet brings to business worldwide: it’s something you could potentially estimate, but it’s also kind of missing the point.

The fact of the matter is that the Internet of Things is coming — and so is the buzz surrounding its potential. Sensors gonna sense. Sure, doing nothing is an option, but it will greatly hinder a company’s chances of gaining from the phenomena (to throw another stat in here, Verizon predicts organizations that use IoT technologies will become at least 10% more profitable by 2025.)

That brings us to what the Internet of Things is really about.

However cool and helpful the technologies, apps and gizmos may be, the Internet of Things at its core is not the cup that tells you how hydrated you are or the app that reminds you to take your daily medications.

The Internet of Things is about embracing technology to do things smarter, better and overall more efficiently. It’s about new and emerging technologies as well as innovative ways to use data collected by smart things. It’s about changing industries, companies and people’s lives for the better, improving user experience and learning in ways one never thought possible before. It’s about solving problems, saving money, changing the world.

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Nice article. With the Gross World Product being in the order of $80 trillion, it seems like Cisco is a little ambitious with a figure of $14.4 trillion for IoT by 2022.
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The next big thing after the internet is the internet of things in so many new ways and opportunities in nearly every aspect we can imagine. We live in exciting times and can look forward to all the possibilities of using IoT for good.
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Increases in revenue and profitability are the critical aspects common to all of these forecasts.
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Even though Garner's 2015 hype cycle put iot at its peak, and has predicted a timeframe of 5 yrs for it to mature; recent reports indicate iot devices crossing mobile handsets in Europe by 2018.

A good article. I guess the innovations around iot (including business modeling) is likely to happen much earlier than previously thought.
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I see that the IoT is comprised of two major areas - consumer and industrial/medical. Consumer IoT will likely be driven by fads in the short run. Surveys show that only about 1/3 of people who buy wearables are still using them after 6 months. Home automation, a.k.a. home monitoring was never a big seller. Sure, it will cut into the ADT home monitoring business, but very few people really need to control their light bulbs using an app on their smartphone when the light switch does a perfectly acceptable job.

Essentially, consumer IoT lacks a recurring revenue model unless you subscribe to a home monitoring service. For example, once you buy a Fitbit, you won't buy another because you don't need it to live your daily life.

On the other hand, industrial/medical is all about the analytics applied to the data captured via the sensors. There is a recurring revenue model here. Whether that's a service to monitor your heartbeat and report a heart attack via your smartphone, or a service to monitor the temperature in a refrigerated truck to minimize spoilage, these are ongoing processes that produce data that needs to be monitored, tracked and analyzed to look for patterns. This is where I feel that the money really is in the IoT.

So, regardless of the numbers, the IoT won't really be successful until we start figuring out how we're going to network 20+ billion devices and where we're going to put all of that data until we can figure out what to do with it. There will be a few success stories and likely a lot of failures until we can truly get a grip on what it means to have an Internet of "things" and how that will impact our daily lives.
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Interesting article. The debate about the revenue value of the IoT market will rage on. Everyone has a different opinion. Throwing Strategy Analytics projection into the mix here: our latest Report authored by CEO Harvey Cohen offers a far more modest revenue estimate of $150B in 2016, with IoT growing to $550B in 2025. While a far cry from some forecasts calling for trillions of dollars of market opportunity, SA believes that $0.5T in ten years is realistic. Further research is required to determine if IoT will boost the overall rate of corporate IT investment or will just grab an increasing share at existing IT investment rates. Beyond the revenue projections themselves, which can be mind boggling, one must ask - what are the sources of the revenue? Not even the vendors themselves know for sure, LOL! There is a clear bifurcation between the vendors' corporate marketing departments which are releasing these projections and the business departments which are attempting to determine where to invest their monies. In IoT if everything is interconnected, it becomes extremely challenging to determine what constitutes an IoT deployment. How for example, does a chip vendor determine the profit made from incorporating an IoT-enabled intelligent sensor onboard a next generation chip? What makes an IoT migration different from any other technology upgrade? The answers are extremely elusive. I suspect the real value and revenue streams with IoT will be attached to IoT migration projects that include a large services and support component.
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Great article
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The wide range in predictions seems to be a good indicator that the definition of IoT and the associated monetization strategies are still evolving. As is the case with terms such as "embedded" or "cloud-based," it may be that IoT has a huge range of meanings where definitions from technical purists and marketing analysts have only a small overlap. And I really like Ms Shea's comment about seeing the innovative use cases and opportunities for problem solving to help us define what IoT is all about.
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Great article. I think the trick comes down what each research house is counting/considering. I'm sure there is quite a variability between the models and what "IoT revenues" is defined as. There is probably a little more consistency when it comes to "connections", but even with that metric there will be variances... Of course, no surprise that we have our own method as well! https://machinaresearch.com/news/machina-research-expands-the-scope-of-its-iot-forecasts-and-highlights-a-usd4-trillion-revenue-opportunity-in-2025/
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We tend to believe the 50 billion device and $6T spend estimates have merit for a few reasons:
1. declining costs (particularly for sensor and network equipment) are making IoT deployments more feasible economically
2. technology standardization and platform architectures, while still in formative stages, will make it easier to engineer and implement solutions
3. high ROIs are providing adopters of IoT with competitive advantages which will we believe will have a follow-on effect and spur growth. 
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Good read, thank you.
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Forecasting IoT growth by device numbers or technology spending is fundamentally flawed by the fact that neither metric takes technology evolution into consideration, hence the widely disparate forecasts. 
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Nice article! 
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Interesting article
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IoT has a huge potential, its going to take a lot of talented software developers to make it happen!
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Very insightful piece. Thank you for sharing, Sharon!
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Well put. IoT maybe seen by some as the hydration cup or pill reminder but its lot more than that. It encompasses a new connected way of business creating efficiencies across all facets of our lives, cities, transportation and business.

IoT is also becoming a catch all buckets for evolving new technologies - AI, AR, VR  because IoT devices produce massive volume of data with insights leading to business disruptions.
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In term of cyber-security, the massive growth of IoT will play a major role the attackers-defenders game. More connected 'things' (whether 21 billion or 50 billions), implies more attack vectors, vulnerable devices and exfiltration points to target.

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Article is correct – the IoT and the smart home is not about the things, not just about the various gizmos, devices and sensors – it is all about how these devices provide services that improve the end users’ lives. How these services make our lives safer, more convenient and efficient. IoT systems – whether for industry, for transportation, for home use and health – need to be more than connected devices. They need to have intelligence that can gather and interpret the data and then take an action or at least recommend an action.
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Irrespective of who gets it right (Cisco, IDC, Business Insider) in terms of IoT revenue potential... I think everyone agrees IoT is here to stay and grow and folks not participating will be left behind.
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Very insightful article!  It's interesting how the Internet of Things has gone from that cool tech at tradeshows, a improbable concept in science fiction movies/books or an intangible feature for some future application to being in the here and now.  However, as most things technical, thought, consideration, planning and consequences need to be viewed evaluated and planned for in advance of applying connectivity.  However the IoT is the future.  The possibilities are exciting and endless.
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Insightful article. Thank you.
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This research says electronics manufacturing would never be the same. IoT and wearables are introducing new technologies and new dimensions in both design and manufacturing aspects. We are definitely seeing this trend now and we are just at the tip of the iceberg !

Zulki Khan
CEO/Founder
NexLogic Technologies, Inc.
www.nexlogic.com
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Great post!
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Good article. Now it's time to stop talking about big numbers and start creating real IoT products and services that people want to use! 
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While IoT enabling products takes advantage of buzz and perhaps creates competitive differentiation, I'm looking forward to seeing new data product offerings, new analysis techniques, and new ways of measuring success or effectiveness with the tremendous amount of collected data. In other words, how does industry continue to move beuyond automation and monitoring and turn the data of IoT into a robust innovation platform? In the meantime, I'm going to return to m IFTTT recipes and continue my personal IoT innovation.
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While its interesting to note the varying numbers predicted, there seems to be little information about what this will mean for wireless carrier revenues. Our research shows that the total expected worldwide contribution of IoT to carrier revenues in 2020 will add an additional 70% - 105% based on current revenue levels.
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Agreed. IoT is an opportunity for not only increasing efficiency and productivity but enhancing customer experiences and creating new revenue streams
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Completely agree. IoT is the convergence of technologies that delivers new experiences and dramatically improves current processes.
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It all depends on how the revenue is counted.  For example, the larger numbers may be attributed towards indirect revenue.
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Great insight.
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As is almost always the case with a new technology, at least after initial hype dies down, there had better be either business or personal value for that tech to succeed. The shelf life of "Gee. That's sort of cool" is short.
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The IoT revenue numbers doesnt match with the hype cycle predictions. Many reports say that IoT is yet to become mainstream and is still at peak of hype cycle but the revenue numbers shown are very high. Large portion of   existing revenue streams are categorized as IoT revenue to establish leadership. 

But IoT is here to stay and to transform various aspects of business like sales, service, manufacturing, logistics etc,. 
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At the end of the day, the Internet of Things is about using technology, and the data extracted by that technology to be better at *whatever*. I don't think we'll ever know fully what the dollars are.
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While the forecasts of how many endpoints will be live by 2020 is subject to much debate, the fact that those firms embracing IoT initially as a way to smooth operations will find themselves outcompeting those firms lagging in their IoT investment.  I believe the biggest surprise will come from the new enterprises yet to be created on top of the enabling infrastructure of IoT.
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Interesting perspective - especially around the stat that IoT will make businesses more proftitable. As we head into 2017, the IoT market will see greater consolidation as technology and processes improve and -  much like natural selection - the strongest ones will survive while the smaller players are gobbled up to build out more robust portfolios. Look at SAP, for example. They just acquired an enterprise-grade IoT solution last month and Cisco made waves in February when it purchased Jasper at 1.4Bn. The rate at which these tech giants purchase startups will only increase as they continue to thirst for the innovation so many of these young companies are born from.  
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Looking forward to posting about IoT at Retail's Big Show 2017
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The article makes a good point about the IoT not being so much about "cool" gadgets, but about embracing technology to do things more efficiently. Take asset performance management in the IIoT, for example. Asset strategies have existed for many years, but with the surge of connected devices and sensors, we have more accurate data on assets than even just a decade ago. Machines are getting “smarter,” and are able to provide very detailed data about their health and performance. So instead of having too little accurate equipment information, organizations now struggle with too much. This is driving a greater need for an asset performance management program to help organizations compile and process data and draw critical insights that enable operators to reduce risks and maintain operational excellence.
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Exciting times! At this point I think we are mostly connecting our existing things and making them a little better. In the end I think our "things" will be either completely transformed or eaten by software.
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Agreed on embracing technology, enabled by IoT, to do more | better | more efficient, etc.!
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IoT predictions are always incredibly large numbers that are mindboggling, but many businesses don’t have a clear picture of how their company will begin offering IoT solutions or invest in IoT to reduce operational costs. 

Small projects like asset tracking, fridge monitoring and remote asset monitoring are easy ways for a company to get started while also protecting their operations from theft or malfunctioning devices. Multiple sensor and platform companies are bringing a lot of industry specific products to market that can be deployed with little or no customization. 

Those companies that move first in offering and deploying IoT solutions will own the most market share as these predictions come to fruition.

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Excellent article; the more exciting applications of the Internet of Things appears to be for its use in a more infrastructural or industrial capacity. Net-enabled devices ranging from building automation to medical facilities will have a major effect in improving the efficiency and efficacy of such devices in the modern world, but also expose those facilities and devices to new risks.

For that reason, it is very important to begin understanding the new primacy of security and secure data in the IoT landscape. Without focusing on keeping our new net-driven infrastructure safe, businesses and consumers alike are left exposed to associated new threats.
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Couldn't agree more. Companies need to focus on use cases for real customers and business models to make money - not just on the technology which is in overabundance.
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I think the Internet of Things is more than embracing technology to do things, smarter, better and more efficiently - it is truly going to change the way we live and the way businesses operate. 
The volume of data that will be generated will enable new insights which will affect how work gets done and even how organizations generate revenue. 

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Interesting post Sharon. Definitely IoT is going to imply a more profound and radical change than the Internet and smartphones.
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I agree with all the above Sharon. Cross-sector collaboration is going to be key in driving the innovation required to bring about the solutions & efficiencies we're aiming for.
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Technology marches on. The race to cash in on IoT devices has prompted vendors to push them out without a full reckoning of their security implications, as we've seen in the recent past. Whatever the predictions, whether it's a billion dollar or trillion dollar industry in the coming years, it is clear that money is to made here. So let's all hope the manufacturers don't cut corners when it comes to keeping the Internet safe.

Yes, embracing technology will improve our lives. But the potential still exists for bad things to happen. We can stay smart, be efficient and stay safe. We just need the will to make the compromises that need to be made.
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