Who Benefits from Internet of Things Data? For Now, Mostly Cloud Providers

How the Internet of Things Will Transform the Data Center

Processing and analyzing data from the Internet of Things (IoT) will push more organizations into cloud adoption, a recent Gigaom article predicts. Somewhat surprisingly—at least to me—much of this expansion is expected to come from government agencies.

Right now, data processing in the cloud more or less means you’re running on Amazon Web Services (AWS). Experts believe that will change quickly, as Microsoft, Google and others make IoT the “next cloud battleground.”

Microsoft and Google have already made their intentions clear, the article notes, and I would add IBM, with its analytics service, to that list. Google is already expanding its own home-automation program, and as part of that, bought out Nest and Dropcam. Both companies—conveniently enough—were significant AWS customers.

Dropcam reportedly ran “the largest inbound streaming service on the internet,” the article notes. It’s pretty easy to imagine Google moving that load to its own infrastructure and using its new Cloud Dataflow service to process and analyze the data stream.

Gigaom isn’t the only one predicting that cloud service will benefit as the IoT gears up. CompTIA research predicts that 50 billion or so devices will come online in the next six years, providing IT businesses and cloud service providers with significant revenue opportunities.

CompTIA asked IT executives to predict who would gain what from IoT revenue. Forty-five percent of those surveyed said device companies would gain the most, but data analytics and Big Data companies came in a close second at 43 percent, Talkin’ Cloud reports. Thirty-five percent also favored companies that “tie together services using APIs.”

So, when it comes to IoT, the safe money is on cloud, cloud analytics and Big Data. But what about end-user companies—will IoT data be worth the expense and hassle?

Probably not yet. IBM’s VP of the Internet of Things, Paul Brody, says most of what’s being stored now “is useless.” What’s more, “the amount of money people will spend on it is zero,” he said during last week’s Gigaom Structure Connect event.

Brody contends we’re in an IoT “bubble,” and much of what’s being stored and sold is meaningless data. While he believes the IoT will find its way “one use case at a time,” he mostly thinks it’s a novel idea right now, with devices that are smart, but not “smart enough.”

Loraine Lawson is a veteran technology reporter and blogger. She currently writes the Integration blog for IT Business Edge, which covers all aspects of integration technology, including data governance and best practices. She has also covered IT/Business Alignment and IT Security for IT Business Edge. Before becoming a freelance writer, Lawson worked at TechRepublic as a site editor and writer, covering mobile, IT management, IT security and other technology trends. Previously, she was a webmaster at the Kentucky Transportation Cabinet and a newspaper journalist. Follow Lawson at Google+ and on Twitter.