Analysis: ‘Internet of Things’ movement gathers pace

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The Internet of Things may be closer than ever - or at least, that’s what major IT companies have been telling investors and customers as their 2014 strategies gather momentum.

This week, telecoms company AT&T and IT giant IBM announced a new global alliance that will see them jointly offer services to help city administrators, utilities bosses and other organisations use ‘Internet of Things’ technology to better manage their infrastructure.

Connectivity is what AT&T will bring to the party. For IBM, it’s data management and analytics software and systems integration skills. Between them, the two companies plan to combine their technologies to help organisations build systems that can collect data, wirelessly, from vehicles, appliances, devices and sensors, and turn that data into actionable insight.

City planners, for example, might be able to analyse the movement of people, to improve congestion, parking capacity and the location of emergency services teams, or to monitor social media updates from local residents reporting bad weather or traffic jams, allowing city authorities to respond more quickly.

“Smarter cities, cars, homes, machines and consumer devices will drive the growth of the Internet of Things, along with the infrastructure that goes with them, unleashing a wave of new possibilities for data gathering, predictive analytics and automation,” said Rick Qualman, vice president for strategy and business development within IBM’s telecom industry business. “The new collaboration with AT&T will offer insights from crowdsourcing, mobile applications, sensors and analytics on the cloud, enabling all organisations to better listen, respond and predict.”

His is hardly a lone voice. At networking giant Cisco, CEO John Chambers has been talking up the ‘Internet of Everything’ concept with growing frequency. Last week, the company announced a new $100 million fund, which it will invest in start-ups working on IoT-related technologies.

No other details were given - and the news was buried low on a second-quarter earnings statement that saw revenues at the company fall around 8 percent, year-on-year. But one day later, when speaking at the Goldman Sachs Technology and Internet conference in San Francisco, Chambers returned to the theme, reprising comments he’s also made this year at the CES 2014 conference in Las Vegas and the World Economic Forum in Davos.

To summarise: the Internet of Things (IoT) market will be worth $19 trillion in the next few years - and Cisco is poised to cash in, having been working on this area for at least the last six years. It is Chambers’ stated belief that most of the computing capability and analytics required to make the Internet of Things will be needed at the edge of the network, where they will turn data collected from vehicles, appliances, devices and sensors into actionable information. CIsco’s game plan for IoT, he says, combines its cloud strategy with its strengths in data analytics, mobile, collaboration and security technologies.

“Everybody thinks [IoT is] about the cloud, but most of the computing and analytics will actually be at the edge - if you will, the fog. And the ability to capture that data and turn it into results very, very quickly gives you major leverage points,” Chambers told attendees at the Goldman Sachs conference.

And last week, Google announced that it had closed its $3.2 billion acquisition of Nest, a the maker of smart-home systems such as the Learning Thermostat and the Protect smoke and carbon monoxide detector, earlier this month. “We expect that the acquisition will enhance Google’s suite of product and service and allow Next to continue to innovate upon devices in the home, making them more useful, intuitive and thoughtful, and to reach more users in more countries,” said company executives in an SEC filing.

Industry analysts, meanwhile, broadly agree that, while there is much work to be done, the IoT concept is gaining pace. At Gartner, for example, analysts have predicted that by 2020, 26 billion connected devices will be in place, almost thirty times more than the 0.9 billion installed back in 2009. That unit figure excludes PCs, tablets and smartphones, but includes all other embedded technology that is able to sense and communicate their internal states or external environment.

Along the way, say Gartner’s analysts, companies will make extensive use of IoT technology and a wide range of products will be available: “advanced medical devices: factory automation sensors and applications in industrial robotics; sensor motes for increased agricultural yield; and automotive sensors and infrastructure integrity monitoring systems for diverse areas, such as road and railway transportation, water distribution and electrical transmission.”

“By 2020, component costs will have come down to the point that connectivity will become a standard feature, even for processors costing less than $1,” said Peter Middleton at Gartner in a report released at the end of 2013. “This opens up the possibility of connecting just about anything, from the very simple to the very complex, to offer remote control, monitoring and sensing.”

“The fact is, that today, many categories of connected things in 2020 don’t yet exist. As product designers dream up ways to exploit the inherent connectivity that will be offered in intelligent products, we expect the variety of devices offered to explode.”

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