How the cloud is the engine behind the growing Internet of Things

The rapidly expanding Internet of Things (IoT) will see billions of devices transmitting and exchanging business data to aid the operations of organisations, and the cloud is set to play a key role in this. Its role is so important, since the number of IoT devices spirals as the Internet of Things starts to become a reality in the enterprise and in the home, and increasing amounts of data requires storage, analysis and distribution.

A burgeoning market

The IoT connectivity drive will create a market worth up to $8.9 trillion (£5.2 trillion) by 2020, according to analyst IDC.

IoT covers anything from smart meters in the utilities industries and machine-to-machine telematics, to Internet-enabled fridges and coffee machines, not forgetting the burgeoning vehicle connectivity market. IDC says that the IoT market will grow at a compound annual growth rate (CAGR) of 7.9 per cent between now and 2020.

Read more: How to prepare your business for the Internet of Things

"The momentum of the Internet of Things is driven by a number of factors," said IDC analyst Vernon Turner. "There is no doubt that business and consumer demand exists and will continue to expand for IoT solutions."

IDC says market enablers for the rise of IoT include the ongoing development of smart cities, cars and houses and a growing culture of personal connectivity. It expects the installed base of the Internet of Things to be around the 212 billion mark globally by the end of 2020.

The cloud, by providing a front-end management interface for IoT devices, offers organisations the scalability and flexibility they need to update and manage those devices. It can also provide the necessary online and shareable capacity to store the data collected from them.

Single location management

A cloud-based management platform that can be located at a single location can control multiple IoT applications and provide the necessary analytics to get the most out of this data for the benefit of organisations. This contributes to efficient business processes, cuts IoT operational costs and helps organisations make greater returns from technology investments.

IoT devices controlled in a cloud environment benefit from the classic scalability features of the technology. They can be increased in number far more quickly in response to the needs of the business, using more efficient resource management.

Running IoT devices in the cloud

To efficiently run IoT devices in the cloud, organisations need authentication and security to ensure that data transferred between devices and applications is verified, authenticated and protected from security threats and malware. They also need managed connectivity and device management to make sure IoT devices can be detected, monitored, updated and managed over the air across multiple mobile and fixed-line networks, and across various mixed network operators. In addition, they require device data aggregation and analysis to ensure information - like temperature, location, usage data and other readings - is efficiently organised and stored, ready for examination.

Taking advantage of speedier networks

As the efficiency and speed of wireless networks improve, the ability of the cloud to control large-scale device deployments will support more streamlined and cost-effective systems for enterprises. Although most IoT devices currently work very successfully over established 2G and 3G mobile networks, it is only a matter of time before organisations decide to garner more data from their devices using the extra capacity being promised by 4G operators.

If you have a good data analytics platform at the cloud management end, there's no reason why you wouldn't want to take advantage of higher bandwidth networks. Changing configuration settings, software updates, troubleshooting through device log files and device performance analysis can all be done quicker through an automated cloud-based front end.

Industry IoT cloud alliances

The delivery of such cloud-based solutions will be enabled through industry alliances across communications hardware specialists, data storage specialists, analytics software leaders and mobile operators.

Read more: Bring your own Internet of Things: The hottest new business trend?

Of the developing cloud-based machine-to-machine/IoT market, analyst Frost & Sullivan says, "Exceptional M2M growth will lead to an exponential increase in the amount of computing power required to effectively manage all that transactional data coming in from connected devices.

"M2M cloud providers that can provide the necessary resources to application developers to help them get started with M2M application development and deployments with relative ease, are expected to see significant adoption for their services. A well-designed and appropriately priced M2M cloud platform can provide a cost-effective way to introduce new M2M applications to the market."