IoT - Internet of ThingsIoT Helps Manufacturers Explore the Future
The phrase “Internet of Things” has arisen to reflect the growing number of smart connected products and highlight the new opportunities they can represent
The number of things connected to the Internet now exceeds the total number of humans on the planet, and we’re accelerating to as many as 50 billion connected devices by the end of the decade. For manufacturers, the implications of this emerging “Internet of Things” are huge.
According to a recent McKinsey Global Institute report:
- the Internet of Things (IoT) has the potential to unleash as much as $6.2 trillion in new global economic value annually by 2025.
- The firm also projects that 80 to 100 percent of all manufacturers will be using IoT applications by then.
- The potential economic impact could be as much as $2.3 trillion for the global manufacturing industry alone.
The rise of the IoT has been driven by the convergence of market forces and parallel innovation of enabling technologies.
To capture this great wave of value creation opportunity, manufacturers have an urgent need to rethink nearly everything — from how products are created, operated, and serviced. Those who don’t, place their current competitive advantage at risk.
The IoT is comprised of the three core components:
- A collection of smart connected products, product systems, and other Things
- Those “things” are connected through an Internet-like Communication Infrastructures
- Communication infrastructures are connected to Computing Infrastructures that are creating new forms of value.
Smart Connected Products in the Internet of Things
The phrase “Internet of Things” has arisen to describe this growing number of products connected to the Internet and reflects the new opportunities they represent. Yet this phrase is not a very helpful in understanding the phenomenon or its implications. The Internet, whether involving people or things, is simply a mechanism for transmitting information. What makes this transformative is not the Internet, but the changing nature of the “things” – the products themselves.
It is the novel capabilities of smart connected products and the data they generate that is ushering in a new era of competition.
- Products can access and monitor the environment. When it starts to rain, a car may roll up it’s windows.
- A replacement machine part could arrive at a work site before a problem was noticed because it’s condition was monitored.
- Real-time remote operation of aerial vehicles can provide troops with an “eye in the sky” so they can remain in safety.
Suggesting that the Internet of Things “changes everything” is a dangerous oversimplification. As with the Internet itself, smart connected products are indeed creating a whole new set of technological possibilities. But the rules of competition and competitive advantage remain the same. Navigating the world of smart connected products will require understanding these rules better than ever.