How the Internet of Things (IoT) Can Boost Your Business
According to recent research, more and more devices are being created with a built-in wireless communication system. So the Internet of Things (IoT) isn’t something that can happen in the future, it has already happened and has become a reality of our world.
IoT devices interact with each other just like people do. And they perform routine tasks for us. Simply put, we’ve managed to automate thousands of boring processes using various sensors, cameras, scanners. Isn't it cool?
And by the way, not only do ordinary users enjoy these innovative solutions. IoT can grow your business too. In the end, the Internet of Things isn't only a refrigerator ordering your favorite meals or a kettle controlled by your smartphone. We're talking about something bigger: smart sensors in public transport, camera-equipped drones monitoring the packaging of goods, simplified logistics, and the like. So the IoT benefits for business (and even the state) are undeniable.
Still in doubt? Then here's another piece of statistics: in the coming years, IoT products will generate revenue of almost $ 345 billion worldwide while reducing costs to $ 175+ billion.
Okay, it's time to discuss all this in detail and in order.
What is the Internet of Things?
Remember the Back to the Future movie? In the first episode, we see the home of Doc Brown, a genius and eccentric scientist. The owner himself isn't there, but his house lives its own life: breakfast is being cooked by itself, the dog's bowl is being filled with food, etc. Of course, it cannot be described as a real IoT system (if only because the Internet isn't included in the process), but there is certainly a hint of future technological advances.
And what is the Internet of Things in modern terms?
From a technological point of view, we're dealing with an interconnected network of uniquely identifiable objects ("things") capable of interacting with each other. It's about the M2M (machine-to-machine) approach, which implies no human participation in the system operation.
There are already several billion IoT devices connected to the Internet. Online access allows them to collect, analyze, and exchange data. But most importantly, they use the processed information to perform certain actions aimed at increasing comfort or improving business processes.
However, let's discuss the whole thing at length to clarify the point.
The IoT essence in a nutshell
One of the participants of the loT World conference 2016 described the Internet of Things concept very amusingly and figuratively. He proposed to imagine a social network like Facebook, but instead of people, devices are registered in it, and each has its own personal page. Published posts (which are IoT data) are visible to all users (in our case, devices). Funny idea, isn't it?
Seriously speaking, the sensors collect information, the IoT system analyzes it, reacts to changes (if any), and, if necessary, gives control commands to smart devices, which execute them. Say, if the temperature in the warehouse rises, the system orders it to be lowered so that the products stored there don't get spoiled.
How to use the devices connected to the internet?
If you think everything is so simple, we have to disappoint you. The point is, you cannot just buy any smart devices of your choice (at least without first analyzing the situation). The industry is still new and lacks standardization. Different devices may use different protocols and standards.
For example, in Europe, smart home devices often operate on the Z-wave standard, and in the US, the same objects are based on Zigbee, which is popular there. However, we discuss IoT protocols in detail below.
But if you approach the process wisely, you get what you expect and even more:
if we're talking about an apartment, then a compact hub organizes the work of the home network of things. You, as an apartment owner, configure the system initially (to make sure it performs certain actions under certain scenarios).
In terms of a larger scale, the data goes to the servers of companies or to cloud storage.
The Internet of Things is developing most actively in the United States, China, and Western Europe.
Nearly 25 billion devices are connected to the internet worldwide, and the number is still growing.
Businesses most often use such IoT devices as electric meters and commercial CCTV cameras.
According to McKinsey, by 2025 the volume of the IoT market will have been more than $ 6 trillion.
As Cisco predicts, by 2023 each user will have about 3.5-4 devices connected to the network.
It's always interesting to know where it all started, isn't it? Especially as the IoT history is very exciting, with its ups and downs.
Internet of Things History
Almost 100 years ago (in the 1920s) the great scientist Nikola Tesla described his vision of the future. He believed that a certain "brain" with radio waves as its neurons would appear, which would control all household objects on our planet. Of course, his words sounded like fantasies and fairy tales far from reality, but life has proved the famed physicist was right.
Then again, people had to wait more than half a century to see Tesla's predictions coming true. The first success remotely related to IoT solutions was the Coca-Cola vending machine at Carnegie Mellon University, which the students improved in 1982. Their goal was to know if Coca-Cola was running out (as there were too many students who wanted to enjoy this sweet carbonated beverage). These skilled young people had found a wonderful solution: they embedded special sensors in the vending machine, thanks to which customers were always aware if there was still some drink left.
Another 10 years later, in the 90s of the last century, people became especially interested in technologies, which later became the basis of the IoT system. Here are just a few of the most striking examples:
The head of the research center at Xerox came up with the idea of the ubiquitous introduction of interconnected computers in the everyday life of people so that these machines solve our daily routine tasks. Alas, the idea hadn’t been realized in those days;
John Romkey (a software programmer by occupation) created something amazing and presented his development to the public at the Interop technology exhibition. Just imagine: there are a lot of people, and a guy offers a modified toaster to the attention of those around him. What's the catch? The fact is, Mr. Romki was able to make toasts without touching the device, remotely. That sounds like an example of an Internet of Things device, right?
Microsoft had joined the trend too, although it had failed. Its ‘At Work’ platform, designed to logically combine office equipment into a kind of unified system and transfer its control to computers, wasn’t in demand.
But that was just a background! The most interesting thing happened in the last year of the 20th century when the Internet of Things term was proposed. The concept was offered to the world by a British expert named Kevin Ashton. Its essence was the convenient management of logistic processes without human interaction. Moreover, the British scientist supplemented his words with a really working IoT system that used radio sensors to receive data on warehouse stocks of products and track the transportation of goods to stores. The owners of the largest retail chains liked the idea, which marked the true beginning of the whole story.
Some consider the beginning of 2014 to be a landmark event in IoT history. It was then that Google acquired Nest, a digital smart home company.
What has changed since then?
We learned how to produce sensors of smaller sizes. Some of them can be embedded in little objects and even clothes;
In addition to reducing the size of the sensors, Internet technologies have been improved, which has led to better communication quality and accelerated the operation of smart devices.
Main IoT Benefits for Business
It's quite obvious why an ordinary user likes IoT technologies (after all, he gets comfort and the ability to control certain objects remotely, so why not?). But what about businesses?
Take a look at the most popular reasons explaining why you, as a company owner, need to implement these innovative solutions (despite the fact the cost of smart technology can be rather high):
Reducing business costs. To begin with, your expenses (mentioned just above) are justified in the long run. You get the opportunity to automate your business, reduce resource use, and increase overall company productivity. However, keep reading the benefits of IoT description to learn more ways to lower your business costs.
Improving equipment performance. Sensors embedded in your equipment will collect data about its condition. So you'll be constantly aware of any unwanted equipment downtime or, say, the need to replace some parts. And the sooner you start repairing, the less it's going to cost.
Effective inventory management. Suppose you received an order from a customer but failed to fulfill it because (as you found out) the product was out of stock. We've all been there, right? Well, it's time to automate your inventory management with IoT software.
Such an approach to inventory management is being used by Walmart, whose drones are constantly studying and photographing vast areas of its warehouse. Also, the system issues regular inventory reports.
High level of customer service. IoT is a great opportunity to run customized marketing campaigns. Simply put, you’ll be able to access the true wishes of your consumers without the need to do comprehensive (and rather costly!) market research. This means you’ll have a chance to offer your clients the most personalized services and products.
Optimization of energy consumption, which won't hurt either. By the way, it's another way to reduce your company costs. All you have to do is install a special smart thermostat.
Increased safety at all levels. IoT might help you stop potential criminals. Just install special IoT security devices (CCTV cameras, motion sensors, and so on), and that's that!
Among other things, CCTV cameras allow you to monitor the work of employees (if you don't trust them).
Improving the quality of production. Various smart devices and systems work accurately and error-free and eliminate the risk of a human factor. So you can improve the quality of your products by optimizing the operation of your conveyor equipment.
Distant work. Alas, current realities force us to minimize contact with the outside world (at least in part). Therefore, each company manager is obliged to provide employees with the possibility to work remotely (and still efficiently). And the Internet of Things is a great solution to this problem.
Monitoring of remotely located objects, which will be ideal if the company has branches in different countries or regions.
Comprehensive business automation. Summarizing the above, let’s conclude the obvious: we get a real chance to remove (or at least reduce) the tedious work routine. Special digital systems do all the boring, repetitive tasks instead of us; what's more, they operate under any conditions at any time of the day.
Why aren't all businesses using IoT technology?
And really why? If these solutions are so cool, why are some companies not taking the risk of implementing them?
Well, we have the answers to these questions:
large initial investment. Of course, the costs will pay off over time, but not everyone is ready to wait for this to happen… which is rather sad, actually;
consumer conservatism. Some buyers are afraid of new technologies and refuse to provide information about themselves;
the conservatism of company management. The first two points of our list can be understood and even justified, but the conservatism of the business owner is totally unacceptable. Companies unwilling to keep up with the times are likely to lose to their forward-thinking rivals on all points.
Using IoT Solutions in Practice
Where is the Internet of Things used? And what could become an IoT device?
The answer is simple: this technology is being used almost everywhere, and any object (namely, any THING) can become an excellent example of an Internet of Things device.
Now let's describe the common use of IoT for business. What areas of activity are ideal in this regard?
Trust us, there are a lot of options to use internet-connected devices to improve urban systems, such as:
public conveyances equipped with special movement sensors;
trash cans with filling sensors;
thoughtful planning of public transport routes based on IoT data on the movement of people around the city;
noise and pollution sensors.
All of the above leads to an increase in the comfort of cities, and they become more convenient and safer to live in.
In the US, smart dumpsters are installed, and they send a signal to the operator when a particular tank is full.
Of course, the most popular way to use IoT technologies is to turn your rather ordinary dwelling place into a highly comfortable smart home system.
How about a smart alarm clock connected to the internet? Regular alarm clocks wake you up at a specified time, which is the limit of their abilities. And a smart alarm clock can analyze what time you should get up to be in the office at 9 am. It'll check (using the Internet) and take into account all the key factors, be it weather conditions, traffic jams, etc.
Another cool idea is to convert your coffee maker into a kind of IoT device whose job is to serve you hot coffee right after you wake up. Sounds tempting, doesn't it?
Or imagine a refrigerator capable of ordering you food when you run out of it. Water control systems needed to avoid leaks and other troubles! Anyway, we can list the benefits of IoT indefinitely.
The agrarian business would also benefit from the use of smart devices. It’s enough to place special sensors in the soil to always be aware of its condition, including moisture, fertilization, etc.
To be precise, agronomists don’t need to do all the work on their own.
The Netherlands has implemented IoT solutions long ago, which is why the country is leading the way in the cultivation of agro-food.
It's time to talk about the real IoT opportunities for businesses. We've already discussed them earlier, but now we're going to give clearer examples.
Why not simplify your company's logistics? You can solve a number of problems:
delivery of goods from production or warehouses to stores. The process would become more transparent and manageable.
tracking the location of freight transport at any time;
simplified management of warehouses and goods packaging systems.
Amazon is quite successful in using the Internet of Things for logistics purposes.
In Arizona, the company owns a huge distribution center where products are being searched and subsequently packaged. And it's not just humans who do this work, but drones and packing robots as well, which has helped Amazon cut costs by 20%.
Medicine seems to be the most suitable IoT usage area. The main task is to increase the effectiveness of treatment, improve the diagnostic system, and prevent some diseases.
IoT technology intercepts data accumulated by medical devices (they track the patient's health parameters) and transmits it to the attending physician. Thus, doctors have the information they need in real-time, regardless of where their patient is.
And if the health indicators turn out to be suspicious, the healthcare expert immediately receives an appropriate alert and can take action without any delay.
Many countries are trying to introduce IoT into medicine at the state level. Notable examples are South Korea, which hopes to make medical devices available to the elderly, and Turkey, which is using this innovative technology to fight diabetes.
In popular science fiction movies that predict the future of our world, heroes often operate smart self-driving cars. Of course, for now, such vehicles remain just a dream, but sooner or later, it’ll definitely come true.
However, today we can use IoT protocols quite successfully, albeit not to such an extent. Among others, they allow us to drive our car with greater comfort. Special sensors constantly analyze its condition and give an alert if something goes wrong.
According to Gartner, by 2022 more than 255 million cars will have been connected to the Internet, namely, approximately every 4-5th of them.
That's where our fantasy could run wild. IoT benefits for business when it comes to retail are truly endless!
We’ll provide you with some of the cool ideas:
shops with digital self-service systems instead of human cashiers;
cameras recognizing customer emotions and responding to them correctly;
AR and VR technologies, which allow telling more about the product; also, they might act as a virtual fitting room (smart mirror);
analysis of real consumer preferences.
As we’ve already said, IoT can grow your business.
As a common user, you might implement the Internet of Things in your home to make it comfortable to manage. And as a business owner, you're very welcome to do the same and for the same purposes (convenient business management, to be precise).
However, earlier we’ve already detailed all the main IoT benefits for business.
In sports, IoT products are being used almost everywhere by both ordinary amateur athletes (such as jogging fans) and professional ones.
There are many examples of sports-type IoT devices: fitness bracelets, various trackers, heart rate monitors, special vests, and more. They track the basic indicators of the athlete's physical condition (heart rate, blood pressure, etc.) and transfer them to cloud storage.
The use of the received information depends on specific goals. Let's say, in the case of a professional athlete, such data will help to understand whether he is ready to take part in the competition (or in a sports game, if it’s about football, volleyball, etc.).
Production & Manufacturing
Manufacturing also benefits from the use of internet-connected devices. There is even a special concept called IIoT (Industrial IoT).
Sophisticated sensors on factory machines, coupled with big data analytics and predictive modeling, result in less downtime, higher equipment productivity, lower warranty costs, and so on.
You must have heard of Harley Davidson, right? The company has found its own way to use IoT for business profitability. It supplemented the assembly equipment with special sensors, which made it possible to reduce the production cycle to a few hours (whereas in the past it lasted more than 20 days). In addition, the IoT provided a chance to improve custom motorcycle assembling (of the customer's choice).
That's why the company's stock reached $ 38 in 2021 (in 2009 the figure was only $ 10).
How does the Internet of Things work?
Let's start with a brief description of the IoT architecture:
End Devices (Things), which include sensors and other similar objects necessary to measure certain indicators. The received data (the so-called Little Data) is being transmitted via special IoT communication protocols to the network.
Network Gateways and Hubs. Special routers unite and connect end devices to the cloud (which is where Little Data is being transmitted).
Cloud Platform. The cloud server stores, processes and analyzes the incoming information and turns it into Big Data.
Server-side computing systems use AI algorithms such as Machine Learning techniques to analyze Little Data and turn it into Big Data.
User Interface. Of course, information is being collected and processed for a certain reason. The main goal is to help the user remotely manage certain objects, be it a smart home system or warehouse logistics. So Big Data is needed to fulfill the tasks assigned to the IoT technology.
Let’s say, if the vibration level sensors show too high values, the equipment owner can start its preventive maintenance and thus avoid costly repairs in the future
As we’ve mentioned earlier, there is still no single and all-embracing IoT communication protocol. Someday it is likely to appear, but for now, we have to choose one of them. And while doing so, one should focus on the following:
information transfer rate;
power consumption, that is, the time during which devices can work without recharging;
maximum operating range (distance to which data must be transmitted);
usable transmission frequency.
IoT Technology Requirements
What criteria should internet-connected devices (and software working with them) meet in order to justify market expectations?
Good coverage. Sometimes sensors are installed in mines or basements, therefore, system coverage should allow the signal to be transmitted outside without hindrance.
Scalability. Initially, any IoT system includes a small number of devices, but in the future, the situation may change. And connecting new hardware or devices shouldn't cause problems.
Affordability. Don't confuse the high cost of smart technology with excessive one. Sky-high prices would scare away most of the users, which means the income would decrease accordingly.
Ease of use, which is a must-have for any digital product (and not just digital, in fact).
A global approach. The Internet of Things is all-encompassing and should be accessible to users anywhere in the world.
High energy performance, or more precisely, allowing IoT sensors to work autonomously for years in a row.
Minimization of the amount of transmitted data, which increases the speed of the system and its efficiency.
IoT Risks & Challenges
"Everything cannot be so sweet and cloudless!" - you probably say.
And you're absolutely right! There were (and still are) problems, and you should know about them in advance.
IoT security and protection
IoT devices are rather vulnerable and subject to all sorts of risks, including DDoS and other virus attacks. So it’s necessary to approach the Internet of Things protection responsibly.
Of course, cloud providers are working hard to create and implement powerful protection tools to prevent theft or loss of data, but no one has been able to completely solve the security problems so far.
IoT technology is still relatively new (in comparison with other digital solutions and products), and therefore companies have to master it on their own.
"Where can I find good experts to deal with the system? Who should I contact if I face a problem? How to simplify the onboarding process?". Business owners have no choice but to answer these and other similar questions themselves.
No unified standards
We’ve already said about the absence of unified protocols and standards. As a result, there is a problem of combining objects (things) into a single connected system.
Some protocols are more energy-efficient, others are more stable or safer to use. However, there is still no perfect solution to satisfy everyone and solve all the problems.
Probably, sooner or later, one of the market giants such as Apple, Google, Microsoft, Cisco, Samsung (or others) will create the required protocol and make it universal, but it's hard to say when this might happen.
The Future of IoT Products
Unfortunately, the past few years have spared no one, and the pandemic hasn't changed the world for the better. And the IoT market has suffered too. According to IDC analysts, its growth dropped to 8% in 2020 (compared with 14%, the figure in previous years).
In 2021, however, things are starting to get to normal, and the following can be expected in the immediate future:
Industry (especially the car industry) might become the growth drivers of this promising market.
IoT solutions have a real chance to permeate all areas of life in the coming years.
The cost of smart devices is going to drop significantly as the starting material will become cheaper and production will expand.
Smart sensors will be used instead of batteries, and they'll charge devices with energy from the environment.
IoT sensors are likely to become very tiny, suitable for use in the smallest household items.
The Internet of Things will further improve healthcare and take it to the next level. They plan to create devices to continuously monitor the health status of patients and transfer data obtained to the servers of medical institutions.
The education sector will also see positive changes. Various IT solutions are going to be introduced: electronic diaries and libraries, student digital passes, etc.
And of course, we mustn’t forget about complete production automation through innovative IoT technologies.
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