IoT One Year Later

One year ago the Internet of Things didn’t exist for most companies. It was a PowerPoint concept filled with ridiculous, impossibly large numbers, and it was almost universally greeted with a healthy dose of skepticism. It wasn’t uncommon to hear terms such as the Internet of Nothing, the Internet of Cars, and the Internet of Home Devices. It also wasn’t common to hear comments such as, “What, again? There isn’t anything new here.”

Today it is filled with the same kinds of outlandish numbers, but no one is questioning them anymore because there really is something new here. A week after the Apple Watch rolled out to mixed reviews, most observers didn’t believe there was much future in wearable electronics. The Swiss watchmakers were safe. So why are established watchmakers now creating their own smart watches?

This didn’t happen overnight. Watchmakers don’t just throw something together. They have been working behind the scenes on a hedge strategy just in case this IoT thing turns out to be bigger than they thought—while downplaying the value of electronics until they were ready. Predictions are that this market will really boom once the hear rate sensors go mainstream and other sensors, such as glucose monitors, start rolling out.

Carmakers have been more forthright about their plans, in large part because new technology sells cars. Warning beeps that someone is walking behind you or that a car is in the lane next to you are valuable safety features. There has been much discussion about how quickly a rearview camera starts up, how to make that happen even more quickly, and how much energy that consumes. On the infotainment side, it’s very convenient to connect your iPhone or Android phone and have it play music through your infotainment system. And it’s really frustrating when an operating system update puts the phone out of sync with the car, as many expensive German car buyers discovered. There are still many kinks to work out here. Connected cars have come a long way, but there’s lots more work to do—and that’s even before we get to software updates in your garage or on the street.

The same is true for the home market, where every home has a basket or bucket of remote controls, none of which quite does everything required for every device. Even those that purport to be universal are painful to program, update, and whenever they go on the fritz the neighbors lock their doors. And while the thermostat may send you useful data, most people have no idea what to do with it. Nor do they need alerts if they run out of milk or laundry detergent. The reality is they want less data, not more data to complicate their lives, and the more that machines can handle this stuff on their own, the better.

And in industry, everyone is racing ahead with smart valves, vibration sensors, smart motors, more efficient data centers and better energy management because it results in instant bottom-line savings. These markets are harder to quantify because they are all unique applications of technology, unlike the wearables market, for example, but they are huge markets nonetheless.

Despite the hiccups, the promise of the IoT is huge. The reality at this point is different. But like the Internet in the mid-1990s, there is a clear direction of where this stuff needs to go—with security thrown in as a given—and lots of work and opportunities along the way. While the growth numbers are all over the map, even the most conservative estimates are huge and very attractive. What a difference a year makes.