Connected objects that can communicate with each other without any need for human intervention: a bed that talks to the blinds and the coffee machine – so that with a simple gesture, getting out of bed, the blinds roll up and the fire rises! All this is no longer part of a futuristic scenario, but what we might call a real and concrete “smart home”. And not just that: objects can communicate seamlessly with people too. They communicate to the extent that the Internet is going to… disappear and be incorporated into the Internet of Everything.
That will be our destination, and on our way there many things will change completely – especially our consumption habits and related business models.
Many objects have been created to interact with the network and are already on the market. Today, virtually every commodity that is connected to a power grid can also be connected to the Internet, and from there to other objects with which it builds increasingly sophisticated configurations, which can be self-learning and customized to their context. This is the new mecca of investments by big technology names such as Apple, Microsoft, Google and Qualcomm.
But the IoT is not just a means to increase the almost infinite list of our comforts. When, for example, “Cyrcadia Health”, a start-up that has developed a system to identify breast cancer cells through a wearable device, invests in the Internet of Things, the revolutionary impact of connected objects becomes blatant. Doug Oberhelman, CEO of Caterpillar Inc., the renowned American producer of heavy vehicles, explains his interest in the development of IoT technology in these terms: “We have slightly over 3 million machines running somewhere in the world every day. What we don’t have today is all of those [machines] hooked into a system that can predict failures.”
However, it is not just a question of functionality and comfort. The Internet of Things is a fascinating and most of all profitable ecosystem, which is why studies about it have multiplied in recent years. Research published in June by the International Data Corporation (IDC) shows that the IoT business generated 655.8 billion dollar sales in 2014, and this figure is expected to grow to 1,700 billion by 2020. Estimates, though, are still very vague: for instance, according to a report by the McKinsey Global Institute, this sector will have a potential economic impact of between 4,000 and 11,000 billion dollars by 2025. In an interview with Fortune, Raj Talluri – Qualcomm senior vice president of product management – says, “I don’t think anyone really knows yet how big it’s going to get because the possibilities are really endless.”
The IoT scenario is utterly new and that is why many analysts urge for a definition of boundaries and an identification of potential critical issues, such as the coordinated management of devices. Indeed, every manufacturer is developing its “connected” objects independently, so one main challenge will be to understand how to connect our Samsung refrigerator to our Whirlpool washing machine, Nest thermostat, Sears dishwasher and ADT security system. To this end, thanks to the levers of venture capital, the first intermediary devices were born – I’m thinking for instance of IFTTT (if this then that) – through which any end user can coordinate a large number of connected devices and consumer applications from one single station.
Another still unresolved issue is the question of privacy. In fact, the IoT is primarily an information network: it must know everything about us – our habits, our daily commute, even the medicines we take. In addition, some analysts argue that the general public is not so interested in having interconnected objects.
Another aspect we should not underestimate, especially in Italy, is bandwidth availability. With the IoT, bandwidth usage will grow exponentially and so should its capacity, which lays at the basis of a smooth communication between connected objects and people. To go back home and find that heating, television and freezer are off because our network was unable to support the required data exchange would be very unpleasant… However, this is an old story: it also applies to the internet we already know, and we can only hope that in Italy this problem will be finally and seriously solved.
In any case, technology’s big names are optimistic: they are trying to grab their slice of the pie, and quickly. According to Gartner, 50% of interconnected solutions for companies will hit the market by the end of 2017. In addition, Tata Consultancy Services found that 26 of the most important companies around the world, of which 14 come from the United States, plan to invest at least $1 billion in the IoT industry by the end of the year. Just to mention some: Samsung has bought Smart Things, a company that designs smart home solutions, and has announced that by 2020 all its products, from phones to refrigerators, will be interconnected.
Google has bought Nest Labs, a start-up that makes smart thermostats, for $ 3.2 billion, and is about to launch Brillo, an operating system that works on any smart object and IoT device; Facebook too is investing in its software platform, Parse, which allows the development of applications for home automation and the Internet of Things. A few months ago, Apple released HomeKit, a platform that allows smart objects to communicate with the iPhone and iPad. Intel and Qualcomm have created chips that can confer computer intelligence to any inanimate object. Even Netflix has launched its smart object – an all-in-one prototype that can switch the TV on, access Netflix, dim the lights and even order dinner at the simple push of a button. In Italy, Enel’s smart meter is now the utility with the largest number – 60 million – of connected devices.
All these projects prove that, among all the trends related to the world of technology, the most influential is the Internet of Things, which is becoming more and more pervasive, starting from the digital industry and spreading to virtually any other corner of the market. In the coming years, this phenomenon will offer the most significant opportunities for technological disruption.