Last year, at SAP’s giant Sapphire Now user conference in Orlando, the Internet of Things (IoT) was a hot topic. Don’t feel bad if you haven’t heard that term or have trouble distinguishing the IoT from the regular old Internet. New tech terms are proliferating as fast as, well… things on the Internet do.
Here’s the scoop. The regular old Internet connects people electronically, using computers or portable devices. The IoT is things connecting electronically to people, or other things. (Check out this terrific Internet of Things graphic.) We’re talking sensor data here – your electronic water meter, home monitoring devices, smart appliances, navigation apps, Fitbits, as well as industrial controls, robotic sensors, inventory control tags, and other industrial technology – all of which are transforming how we live and work. The interconnection of these embedded devices is expected to usher in a new era of automation, smart objects and data sources – the possibilities are almost limitless as the IoT reshapes the Internet of tomorrow.
In 2011, connectivity giant Cisco published a report predicting that the number of devices connected to the Internet would increase from a 2003 base of 500 million, to more than 50 billion – or 6.5 times the world population – by 2020. Others have since dialed that estimate back to 25 billion. Still, that’s a lot of devices. Think it will have an impact?
This virtual universe is expanding at a speed almost too difficult to fathom: Cisco estimated that in 2011, the Internet traffic of just 20 average households exceeded the entire global Internet traffic of 2008. That in just three years! Hard to believe.
The transformational possibilities of the IoT are staggering, creating opportunities to reengineer industrial processes and revolutionize the retail customer experience while improving the efficiency and effectiveness of business processes, leading to new business models. IoT is enabling companies in almost every industry to connect and monitor their assets from virtually anywhere, improving the way these assets are used and managed. The potential bottom-line impact of this massive connectedness is hard to ignore in many industries, including automotive, aviation, energy, farming, firefighting, healthcare, trading operations, and transportation and logistics, to name a few.
For me, pondering a change of this scope and velocity is impossible without the sound of alarm bells. Imagine such rate of proliferation in, say, public health, where a single virus could quickly spread through human contact. Electronic viruses can spread farther and faster, raising the bar for detection and containment. So the security challenges of the IoT are significant.
But I don’t mean to rain on anybody’s parade. In fact, I think the IoT can be used to mitigate risk as much as it creates risk. For example, it can be used to shed light on trends and behaviors that were previously a best guess. It can be used by exchanges to watch for trading anomalies caused by automated trading. It can hone marketing strategies and vastly improve companies’ agility and response time to emerging risks.
To manage the IoT, we must harness big data, by analyzing and understanding the stories that data tells us, and capitalizing on that knowledge. The challenge lies in determining what stories are relevant to the business and how to support those stories with the least possible surplus, so we don’t create data for the sake of data and get lost in minutiae.
As noted earlier, security challenges must also be addressed. A slew of new connected devices means a slew of new potential penetration points for hackers and cyberattacks. How effectively organizations manage the IoT will depend on how well they manage to create order and extract value out of the data, while maintaining the security of the expanding information infrastructure. That’s a big job. If only there were a device to track its progress!