There are many buzz terms floating around the industry today including the Internet of Things (IoT), wearables, and big data analytics. Although they imply different aspects of technology and the industry, they are all really linked to a single concept of a world of connected devices. So, how real is this world?
In some of the most optimistic scenarios, everything around us, on us, and our own bodies are part of the connected world. All are enabled through tightly integrated processing units, sensors, communications and various user interfaces. However, there are still limitations in technology to make this dream a reality, including limitations in semiconductor scaling, communications bandwidth, power consumption and battery technology. Arguably, many of the solutions that are in the market have been a big disappointment because of these limitations. And in other cases, we have had the ability to sense, connect, and control devices remotely for years, but the practice has not taken hold. But, that’s all about to change.
There has been one critical thing missing from this connected dream – a revenue generating business model. Just making a smart refrigerator is not enough. While it may provide some additional value to a few select consumers, it alone does not generate a new revenue stream. However, when you can collect and sell information from that refrigerator and use if to generate new revenue streams, then you have the missing component to making the connected world a success. This is big data analytics and it extends from tracking everything from industrial manufacturing to consumer purchases to even the health of consumers themselves.
The size of data analytics is difficult to determine or even forecast, but we are definitely seeing the investment as companies across many industries, such as internet powerhouses, communications providers, and industrial suppliers, build out cloud services infrastructures to collect, house, and analyze a new world full of data. In just the past month Verizon and GE have both made announcements about cloud infrastructure upgrades. GE indicated that the predictively services it introduced last year have already generated $290 in revenue so far this year (http://www.reuters.com/article/2013/10/09/us-ge-industrialinternet-idUSBRE9980NH20131009). In fact, the data and information or services around the data could eventually eclipse the ad revenue that has been such a strong driver of the internet build out.
There are privacy concerns that will be raised with some of this data collection, but as we have seen in the past, money usually trumps privacy concerns and eventually it just becomes an accepted part of our ever changing society.
So, when you combine new technologies, new usage models, and new business models you have a recipe for success, and many of the emerging applications like IoT, wearables, and cloud services are all part of the equation when combined with data analytics.