It’s hard to argue with the potential benefits of a thoroughly connected enterprise using Internet of Things technology. While this term has risen to mainstream prominence in the last five years, the IoT is really nothing new to the industrial sector. Smart, connected equipment sharing data has been around since the genesis of plant automation.
However, like other technologies advanced by the industrial sector, IoT investments have been significant with larger companies, but slower to materialize with the bulk of U.S. manufacturers. At least some of this trepidation stems from a concern over the size of initial investments and the time it will take to realize a return on projects that impact nearly every facet of their operation.
A recent report from Business Insider entitled The Internet of Everything offers an interesting take on the growth, obstacles, and future of the IoT, including how the efficiencies touted by these connections will translate to a substantial ROI. Some interesting facts from the report include:
- By 2020, there will be 34 billion devices connected to the internet – that’s more than four for every human on the planet.
- In 2005, less than 25 percent of the world was connected to the internet, but by next year, 50 percent of the global population will be on-line.
- Annual shipments of military robots, including drones, are up by more than 100,000 since 2012.
All this investment has had profound ramifications. First, because demand has grown so strongly, hardware prices have dropped. Specifically, sensor costs have been cut in half. Sensors translate to data in the IoT world, which is probably why the report showed that manufacturing is the industry seeing the greatest return on IoT investments – outpacing telecom and retail.
In total, the report projects that $6 trillion will be invested globally on IoT solutions between 2015 -2020. That’s the equivalent of 1.25 percent of the global GDP, and two-thirds of that will come from private businesses, including manufacturers. The report states that this will translate to a $12.6 trillion ROI.
However, as investment totals have risen, so have the challenges. All this internet-enabled technology has triggered an increase in security concerns as connectivity has spread from PCs and mobile devices to connected cars, wearables, and other IoT-networked equipment. The result has been additional investments in cybersecurity by both users and developers.
Additionally, as the application of IoT has spread, it has placed greater strain on the communications infrastructure. This translates to reliability issues, which, along with higher prices for smart appliances and controls, has kept the connected home from keeping pace with the growth of other areas of the IoT.
However, in spite of the challnges, IoT will continue to grow. The primary focus for the industrial sector will be ensuring that cost and time savings can be achieved without sacrificing quality or safety. These benefits, as always, will help deliver better solutions to the consumer market down the road.