The IoT: Still a Work in Progress

Arthur Cole
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The Internet of Things (IoT) will be the next big thing to hit the enterprise, and when I say big I mean really, really big.

Gartner currently estimates that there will be 25 billion connected devices by 2020 and that the IoT sector will contribute about $2 trillion per year to the global economy. Opportunities for the enterprise run the gamut from improved product development and marketing to the discovery of new business opportunities and perhaps entirely new economies. Along the way, the IoT will produce an entirely new data infrastructure—one that is leaner, less costly and capable of delivering compute, storage and networking capabilities that are superior to today’s state-of-the-art by multiple orders of magnitude.

This all sounds like heady stuff, and it is. But the question isn’t whether this new environment will emerge, but when. There is a tendency to believe that all of this will be foisted upon the enterprise ready or not, but in reality, the IoT will not emerge on its own. It will take a concerted effort across today’s digital economy, led by the enterprise, to put the underpinnings of the IoT in place, which means that the IoT will not arrive until the enterprise is good and ready.

According to a new report by McKinsey and Co., the IoT will require substantial development in three key areas: basic infrastructure, analytics and technical/industry standards. The overarching goal in all of this is interoperability, which analyst James Manyika says is not sufficiently developed to support the kinds of IoT capabilities that Gartner and others have in mind. Another catch is the cost of the basic hardware. While prices have dropped dramatically in recent years and are likely to continue falling as commoditization and modularity take hold, the capital costs for such an endeavor are still out of reach for the vast majority of enterprises and cloud providers.


This is why the enterprise is not afraid of pursuing a slow-and-steady approach to the IoT, says Datamation’s Pedro Hernandez. According to TechValidate in a report prepared for Red Hat, 12 percent of organizations are already actively rolling out IoT solutions. Given that the IoT only entered the IT radar within the last year or two, this number is more than respectable, but it in no way indicates that the enterprise is in a mad scramble to shore up its IoT capabilities in the face of a data deluge. Perhaps most interesting is the fact that many organizations are already planning how to leverage the IoT, suggesting that the enterprise is pursuing a more calculated approach compared to technology initiatives of the past.

As with most everything, the ultimate pace of IoT adoption will be determined by simple economics, says EnterpriseDB’s Pierre Fricke. On the one hand, the IoT may lead to new products and new opportunities for the business side, but on the other, IT still has to contend with the backend of the system that collects, stores and analyzes all this data. Invariably, this will mean the cost of supporting IoT infrastructure will hit the enterprise long before the money comes rolling in.

So the IoT is definitely coming, but exactly when and what form it will take is still very much up in the air. If past is prologue, it will reshape industries and drive new business activity, but at the same time it will be shaped by the needs and desires of the digital economy that it serves to the point that the final environment will likely be very different from what the analysts of today envision.

Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata, Carpathia and NetMagic.



Add Comment      Leave a comment on this blog post
Sep 2, 2015 3:57 AM sorin jackson sorin jackson  says:
Your gartner report says that IoT app development having a great future and contribute of IoT sector will be about $2 trillion per year to the global is really big. Reply

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