Internet of Things (IoT): It’s Not Hype
By Shlomo Maital
If you’re like me, you may be skeptical of the term “Internet of Things”. I am so tired of hearing about refrigerators that know how to order milk. This is not a compelling value proposition. But after reading a new McKinsey Global Institute report, I am a lot less skeptical.* Here is a summary.
Definition: “The Internet of Things: sensors and actuators connected by networks to computing systems, to monitor and manage the health and actions of connected objects and machines, including people, animals and the natural world.”
“The Internet of Things has the potential to dramatically improve health outcomes, particularly in the treatment of chronic diseases such as diabetes that now take an enormous human and economic toll…. Technology suppliers are ramping up IoT businesses and creating strategies to help customers design, implement, and operate complex systems – and working to fill the gap between the ability to collect data from the physical world and the capacity to capture and analyze it in a timely way.”
“We estimate that the Internet of Things has a total potential economic impact of $3.9 trillion to $11.1 trillion per year in 2025. (At the top end, the value of IoT impact would be equivalent to 11 per cent of the world economy, or $99.5 trillion in 2025.”)
“By viewing IoT applications through the lens of “settings” we capture a broader set of effects.. a settings lens helps capture all sources of value – we identified nine settings where IoT creates value: Human (devices attached to or inside the body); Home (where people live); Retail environments; Offices; Factories; Worksites; Vehicles; Cities; Outside. “
“ Capturing [the potential of IoT] will require innovation in IoT technologies and business models, and investment in new cpaabilities and talent.”
So: Innovator! Can you think of ways that connecting things digitally brings real value to people? Which of YOUR things would you like to see connected? Start with a setting; proceed to thinking of the sensors you need; and continue by thinking about how you would use the sensors’ data to create value. This is a future industry waiting to be invented.
* McKinsey Global Institute. The Internet of Things: Mapping the value beyond the hype. 2015.