By Stephen Parkes, CEO of Go Enrol
Where to start with the Internet of Things (IoT)? It is massive. The third wave of the Internet. Goldman Sachs have described it as “the next mega-trend” which has the potential to connect 28 billion “things” to the Internet by 2020. Before we take a quick dive into this exciting area of development, let us start with a definition of what IoT is:
“A proposed development of the Internet in which everyday objects and industrial equipment have network connectivity, allowing them to send and receive data.”
You’d be right to conclude that essentially every aspect of life has the potential to be touched by IoT. The landscape for development ranges from wearables to cars to homes to cities – including the foundations which enable a city to function, or even to livestock as was highlighted in this BBC article about sheep!
The potential scale of the market for just the industrial aspect of the IoT opportunity is put by Goldman at $2 trillion (£1.3 trillion) by 2020. It could impact: “everything from new product opportunities, to shop floor optimisation, to factory worker efficiency gains that will power top-line and bottom-line gains.” For the whole IoT market, IDC believes it will be worth $7.1 trillion (£4.7 trillion) and Cisco’s estimate is $19 trillion (£12.5 trillion).
The factors which enable the belief that the time for the IoT is now are primarily a number of significant technology changes. They include: smartphones; cheap sensors; cheap bandwidth; cheap processing; and widespread wireless coverage. Critically also, most networking equipment is now supporting IPv6 which can use 128-bit addresses which, theoretically, should give enough addresses for even the largest estimates of the number of IoT connections that might be needed.
The M&A in the sector has already begun. One of the more high profile deals was Google’s $3.2 billion (£2.1 billion) purchase of Nest, maker of Internet-connected thermostats. Samsung has bought SmartThings and Qualcomm acquired the British semiconductor company CSR.
Cambridge itself is home to ARM Holdings, which licenses the process architecture that powers 95 per cent of the world’s smartphones. According to Forbes, ARM is on its way to becoming a top licencer of connected devices with “half of the 10 billion chips its licensees sold last year were for non-mobile items like appliances.”
Then there are the marketing opportunities which are presented. With devices everywhere, marketers will be able to understand their customers better than ever and in turn be able to target them increasingly individually. Naturally, this brings up the privacy and security debate.
If you’ve taken one thing away from this blog post, I hope that it is that IoT is ripe for imaginative solutions to be tested and new ventures founded. If you want to meet people who are actively interested in doing that, then join us for the IoT & Smart Cities Venture Creation weekend which is being held in Cambridge on 20-22 November 2015.
IoT & Smart Cities Venture Creation is an event which brings together like-minded people from diverse backgrounds and professions to work on new venture ideas for 54 hours. It presents a superb opportunity to test new ideas and meet people interested in the Internet of Things. Find out more & register >