During an industry shake-up, those who emerge successfully are those who harness the benefits of new trends better than their competition. As technological innovation continues to proliferate every sector, so too do the connections between the hardware we’ve grown reliant on. The “Internet of Things” is an intricately woven spider web of networks. Knowing how to make use of it will be one of the driving forces in business for years to come.
The term Internet of Things (or simply IoT) is one that may not be familiar to those who are not tech savvy. There are many definitions for IoT, but the most concise description (provided by the stock indexing company, GlobalX) is “the network of physical objects (devices, vehicles, equipment, homes, buildings) that are connected to the Internet through embedded devices and software, which allows these physical objects to collect, analyze, and exchange data.” From this definition, one can gather that any electronic device works as an access point to connect to a massive network and exchange data with all other connected devices.
However, the Internet of Things is not the Internet itself. When comparing the two, the Internet is considered a giant lattice of connections that provides the means to exchange data across the entire network. The Internet of Things, on the other hand, is a smaller, more localized network of task-specific pathways that exist to streamline a process through interconnectivity. IoT is not reinventing the wheel. Instead it is honing device networking to potentially become the most powerful and influential concept of the 21st century.
The World in Your Hand
As a society of consumers, it is essential to realize just how much our actions affect what is available. This innate drive — or “demand” in economic terms — to get what we want with greater ease is where IoT thrives. As our devices become hotbeds of personal data, the statistics of the communication between them have developed a variety of commercial uses and consumer benefits. At the cost of some privacy (the ethics of which are still debated), these electronics are capable of analyzing buying patterns, product use, and preferred brands resulting in a streamlined shopping experience that requires almost no extra effort on the part of the consumer.
For instance, the Internet of Things can connect buyers directly to their favorite suppliers. In addition to phone apps, ecommerce giant Amazon has already used small Wi-Fi-capable Dash buttons for several years. When the button is pressed, orders are sent to nearby warehouses to replenish household items such as laundry detergent or toilet paper automatically. Other companies have capitalized on this strategy too. Appliances like smart printers or smart washing machines can sense when ink or detergent levels are low, and automatically queue reorders. If that is not enough, fully integrated smart home packages are building popularity.
Similar to how cell phones have evolved into pocket-sized computers, an integrated home promises features like Wi-Fi-linked security cameras, lighting systems, large appliances such as refrigerators, and smart thermostats which can be programmed to change climate settings for energy efficiency. All of which can be accessed and programmed from a smartphone.
While some might see having digital access to your refrigerator as gimmicky, these features are designed to optimize household efficiency and convenience. The thermostat and lighting system, for example, can send notifications to the user’s phone that include suggested temperature and light settings to optimize energy efficiency based on season or time of day, a feature that is particularly useful when no one is home.
Aside from the obvious security measures, a camera that feeds a live stream to a user’s phone could also be used in tandem with a smart lock system to allow users to grant access to their property remotely or act as a wireless intercom. This feature is something which would prove very useful in case you are expecting a package delivery but would not be able to receive it in person — or just don’t want to get up to answer the door.
A home can be outfitted with an Artificial Intelligence platform, such as an Amazon Echo, to automate virtually any task with the help of tethered smart devices. The Echo can also directly order products from Amazon’s website or search the Internet with voice commands. With remote access to a correctly configured house, you can effectively be in two or more places at once, taking domestic optimization to a whole new level.
It must be acknowledged that all this convenience does not come without pitfalls, mainly the loss of some data privacy. The Echo and other home assistants operate by listening for keywords which they interpret as commands, and thus, are always listening. Thankfully, it seems Amazon and other tech companies are devoted to user privacy. They are reluctant to give up personal data collected by these devices if compelled to do so by local law enforcement. However, data is shared with sales applications a bit more liberally.
Building Bridges Between Consumer and Supplier
From a commercial standpoint, the most significant function of IoT is to act as a direct relay between a business and its target audience. For example, Birst, a business analytics group, recently developed a concept for using the Internet of Things to optimize sales for coffee companies and discounts for their respective customers.
IoT-friendly coffeemakers can transmit information to the manufacturer or other coffee companies about how often the machine is used. If the customer registers an email address to the coffeemaker company’s database, a profile is created to collect data. The data collected can be used to differentiate user groups into tiers that provide promotions and product support conformed uniquely to any given customer’s habits.
Based on these habits, the company could then offer promotional discounts personalized for each customer on a regular basis. For example, the app might recommend cleaning products when a user’s machine has not been cleaned in a while. The customer simply uses the app, which recommends products to order based on their data. This form of IoT can also help keep track of warranty registration information and use of devices to offer affiliated discounts such as gift cards to partnered businesses or coupons for similar goods sold by the same providers.
In spite of its potential, a new survey conducted by Cisco Systems on 1,845 IT companies based in Great Britain, the United States, and India has found that only 26% consider themselves successful in implementing IoT. The survey notes completion time, quality of data, internal expertise, IoT integration, and cost of implementation as primary factors of success. However, 73% of those who consider themselves successful have marked significant improvements in product quality and performance, decision-making, customer interactions, as well as lowered operational costs and reduced maintenance or downtime.
As far as the other 74% who have been unsuccessful with IoT are concerned, roughly two-thirds agree that the failed initiatives have taught them to accelerate their IoT investments. In other words, though the initial investment might be steep, there’s still a continued drive to make the technology work rather than abandoning it altogether.
Bettering the Back-end
One of the most striking examples of effective IoT strategy is Amazon’s autonomous warehouses. Orders made by customers are sent to the nearest fulfillment center, 13 of which are equipped with small autonomous robots which receive the order over a secure Wi-Fi connection. The robots then locate pallets within the warehouse containing the ordered product. Once found, the bots reorganize the pallets for offloading by a human warehouse worker, completing the order prepping process. The idea of using small robots as self-sufficient pallet jacks may seem insignificant, but Amazon is already seeing a drastic improvement in order assembly time.
In 2016 Deutsche Bank estimated that Amazon has cut operating expenses by 20% since the procurement of the Kiva robotics company in 2012. Additionally, Deutsche Bank forecasts that Amazon can eliminate another $800 million in expenses when it outfits the remaining 110 fulfillment centers with robotic assistants. A lot of the savings comes from faster order fulfillment speeds. Last year Amazon reported that order preparation and processing times “have been cut from 60 to 75 minutes to roughly 15 minutes.” Usage of the bots has also resulted in about a 50% reduction in warehouse floor area due to more efficient use of space.
You may think Amazon’s success would be difficult for small- and medium-sized businesses to replicate, but adding robots to help manage tasks like this is surprisingly scalable. Companies that need a hand to outfit their warehouses with such technology can partner up with providers like Yale that offer cost-effective solutions for automating specific tasks.
On top of warehouse automation, business owners can also utilize IoT through devices like smart locks (electronic locks that can be toggled with a connected device) and cameras that live stream video footage to a user’s phone or computer. Blurring the lines between science fiction and reality more drastically, a Belgian company hopes to outfit the staff of prospective companies with microchip implants in their hands as a way to tighten and simplify physical security measures. The chips use radio-frequency identification (or RFID) to serve as personal identification, allowing employees to access specific areas based on security clearance. Usage of this strategy could save companies the trouble of having to hire security staff or at the very least reduce concern over lost ID cards.
These examples merely skim the surface of the benefits provided by the Internet of Things. IoT technologies will continue to pervade all sectors of private and public life. Regardless of initial hurdles, IoT is not going away anytime soon: in 2016, 57% of business owners acknowledged that IoT would be a highly influential factor in the future. Professional estimates also indicate nearly 50 billion devices will be part of IoT by 2020. For scale, this translates into roughly six devices for every living person.
The popularity of the Internet and the service opportunities it offers is one of the main driving forces of the first decades of the 21st century. The Internet of Things doubles down on this infrastructure by creating purpose-driven networks that perform specific functions and share specialized data. With examples of successful IoT surfacing almost daily, it is impossible to ignore the looming reality that it is steadily becoming one of the most promising and priceless concepts of innovation.
Learning how to harness those networks of interconnected devices to streamline the completion of a task will dominate the goals of any profitable companies in the coming years. With all the hype, it is very possible that one day we will question how we ever accomplished anything without it in the first place.