What is the Internet of Things (IoT)?
The Internet of Things (IoT) is the network of physical items that use sensors, software, and wireless devices to connect and communicate with each other. Objects ranging from a smart tv to a machine in a manufacturing plant to an electric car can all be part of the IoT, as long as they have internet connectivity and are able to share data with other devices.
In 2020, there were over 9 billion IoT devices, a number that is expected to almost triple by 2030.
Why is IoT Important?
The IoT has been and continues to be a major driver of the digital transformation, in which companies across industries are using technology to improve efficiency and productivity.
By enabling devices to communicate with each other and share data, IoT connects the physical world to the digital world. This opens up new worlds of possibilities, as huge amounts of data are collected, analyzed, and used to make data-driven decisions.
How Does IoT Work?
There are three basic steps to how an IoT device works:
Data Collection - The item is fitted with a sensor or other hardware that collects data.
Data Sharing - The collected data is automatically sent to cloud-based software.
Data Analysis - The software analyzes the data and sends the results to the user through a mobile app, website, or the original item itself.
Examples of IoT Applications
The applications of IoT are endless, but some common examples include:
Self-regulating thermostats and other appliances in smart homes
Inventory warehouses that provide alerts when stock is low
Manufacturing equipment that can identify their own need for maintenance
Location tracking of delivery trucks
Health and fitness tracking wearable devices
The Benefits of IoT
Among the many benefits of IoT include:
Data-Driven Decisions - connected devices capture huge amounts of data that companies can use to make more informed, data-driven business decisions.
Real-Time Information - because IoT devices are always connected, the information that they provide is always updated and accurate. This is especially important when it comes to location-tracking - for example, knowing exactly where components are at any given time and when they will arrive at a manufacturing plant makes it easier to plan production times and meet deadlines.
Automation - when tasks can be automated, it saves time and allows human employees to work on other, more productive projects. Automating manual and repetitive tasks in particular will also reduce human error and increase employee satisfaction.
The Risks of IoT
As is true with most technological innovations, IoT is not without risks, some of which include:
Security Challenges - the IoT is a cybercriminal’s dream and the perfect opportunity to hack into systems that are not properly protected and create havoc. It is extremely important for all IoT systems to have tight security and ensure that all data is protected.
Loss of Jobs - there are experts who fear that the increase in automation, and especially with the addition of artificial intelligence (AI), will lead to a significant loss of jobs for humans. According to Goldman Sachs, 300 million jobs could be lost to AI.
Incompatibility - what makes IoT work is the ability of different devices to communicate with each other and share information. As technologies change and advance, it’s possible that some devices will become obsolete and incompatible with newer technologies, making it harder for them to stay part of the network.
Which Industries Can Benefit Most From IoT?
The following industries are well-positioned to gain the most from leveraging IoT in their businesses:
Manufacturing - integrating IoT devices into a factory can give manufacturers a competitive advantage. They can receive real-time updates and alerts so that they can take quick action to solve problems and prevent unplanned downtime that can lead to delays and added costs. They can also use location-tracking devices to keep track of inventory and components and not waste time looking for missing items.
Automotive - IoT sensors can help predict maintenance needs, keeping drivers informed of when they need to take action. Service centers can use location-tracking to keep customers updated on when their cars will be ready.
Shipping and Logistics - technological solutions can keep shipping companies updated on where each shipment is in real-time, allowing for better planning and reporting to customers. When necessary, IoT devices can reroute shipments automatically due to weather conditions or other circumstances.
Retail - IoT devices can streamline inventory management, improve customer experience, provide visibility into the supply chain, and decrease overall costs.
Healthcare - IoT enables telemedicine and remote healthcare, which grew in importance during the Covid-19 pandemic when people were unable to leave their homes to seek care.