A huge market is taking shape in the technology space, potentially worth trillions of dollars in less than 10 years. This article will help you understand this phenomenon, what it means for investors, and which companies will likely reap its benefits.
What is IoT or Internet of Things?
The IoT is a system of gadgets, machines or objects that are equipped with technologies that allow them to communicate with each other. These items are made up of electronics, software, sensors, actuators, and network connectivity so they can collect and exchange information.
Some examples are smart thermostat systems and washer or dryers that use Wi-Fi for remote monitoring.When these objects interact, they produce data that are collected and used by technology administrators.These data have a lot of uses, but they are generally utilized to assess the status of anything, from humans and inanimate objects.
You can look at it by assessing the relationship among a mobile phone, the cloud, and third-party applications. These applications can provide users with all sorts of data it collected when it interacted with the mobile phone and the cloud, even after they are disconnected from each other.
Developers expect that the interconnection of these objects will enable automation in almost all industries, which can eventually result in highly advanced systems like smart grids, smart homes, intelligent transportation and smart cities.
In a smart city, the Internet of Things is used to manage the city’s transportation systems, schools, hospitals, power and water sources, waste management, law enforcement and community services to improve the quality of life of its citizens.
IoT systems are not just capable of sensing things; they can also be capable of performing actions.
For example, intelligent shopping systems can monitor a user’s purchasing habits through his mobile phone. This will allow retailers to customize their offerings based on the user’s favorite products and geographical location.
For applications involving heat, electricity and energy management, a resident can automate home appliances as well as security features.
What are the Benefits of the IoT?
Because the IoT allows humans to control objects even from a remote location, there are more opportunities to integrate the physical environment into computer-based systems. As a result, humans can enjoy the benefits of better efficiency, accuracy, and other economic gains.
Over the years, a large volume of data will be produced, requiring massive infrastructure upgrades to accommodate data storage. There will also be a need to generate vast quantities of data from different locations in the world, quickly aggregate these data, and the infrastructure to index, store, and process them quickly and effectively.
These will then boost demand for enterprise data centers.
If you’re wondering which companies you can invest in, IoT Analytics identified the following firms as the leaders of the industry: IBM (NYSE:IBM), Google, Inc. (NASDAQ: GOOGL), Intel Corp. (NASDAQ: INTC), Microsoft Corp. (NASDAQ: MSFT), and Cisco Systems, Inc. (NASDAQ: CSCO).
Other notable IoT companies are Ericsson (NASDAQ: ERIC), Qualcomm, Inc. (NASDAQ:QCOM), and Facebook, Inc. (NASDAQ: FB).
To access the complete rankings, click here: https://iot-analytics.com/top-20-iot-companies-q2-2015/
How will the IoT work?
In an ideal setting, the collected data is made available even to third-party applications, and is not confined to just the closed network where the machines operate. Experts believe that the former setting will enable the IoT to provide true value.
This means that in data centers, platforms are able to communicate with one another, even though they came from competing vendors. This can happen through standard application program interface that can be recognized by all pieces of equipment from different vendors.
Some system integrators like IBM are starting to open up their systems to allow different vendors to join the IoT, although it took some time before it happened. This is comparable to various telecommunications operators allowing users to connect to competing networks.
How did IoT come into existence?
Way back in 1982, the idea of a network of smart devices emerged through a modified Coke machine at Carnegie Mellon University. The first connected appliance was able to report the status of its inventory and provide information on whether newly-placed drinks were cold.
The concept of the IoT gained traction in 1999, when British entrepreneur Kevin Ashton coined the term while working at Auto-ID Labs, a global network of objects connected to radio-frequency identification.
In IoT, the term “Things” refers to various devices ranging from heart monitoring implants, biochip transponders on farm animals, electric clams in coastal waters, automobiles with built-in sensors, DNA analysis devices for environmental, food, or pathogen monitoring, and even field operation devices that help firefighters during search and rescue operations. The term “Things” can also refer to the combination of hardware, software, data and service.
The rationale was that if all objects and people in daily life were equipped with identifiers, computers could manage and inventory them. It was believed that daily life would change dramatically if all objects in the world will be equipped with identifying devices that can be read by machines. It would also alter a person’s interaction with objects.
At present, the IoT has evolved due to multiple technologies, such as wireless communication, real-time analytics, machine learning, commodity sensors, and embedded systems. IoT products are grouped into five categories: smart wearable, smart home, smart city, smart environment, and smart enterprise.
What is the future of the IoT?
Gartner, Inc. estimates that there will be almost 20.8 billion devices within the IoT by 2020, creating a huge market for technology companies. McKinsey & Company projects that by June 2025, the IoT will be an $11.1 trillion industry — equivalent to more than 10% of the current world economy.
A survey by Pew Research Internet Project also showed that majority of technology experts and internet users believe that the IoT will have widespread benefits by 2025.
Experts believe that in the future. The IoT could be an open network wherein intelligent entities and virtual objects will be able to act independently of one another.
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