An increasing number of devices

Few things in technology are likely to spark as much debate as the implications of the Internet of Things (IoT), the term used to describe the connectedness of items we use in the physical world. It could be thermostats, farm equipment, refrigerators, and just about anything else where a unique identifier can be embedded. It’s the sort of scenario that creates huge opportunities, but also generates a lot of fear, uncertainty and doubt. Whatever your take, there are business implications that are worth your attention.


Business consultancy McKinsey says integration will be the biggest challenge for companies grasping for Internet of Things expertise. But integration won’t just consist of connecting software-based systems to other similar systems. Much of the work McKinsey describes will be unifying the networks that operate industrial machines with embedded software. GE calls it the “industrial internet,” and is ponying up more than a billion dollars to jumpstart activity across industries. Healthcare is one of the industries where the IoT is already making an impact.

“Today, for example, clinicians diagnose depression through a lengthy assessment. But simply matching call patterns and GPS signals on a phone to determine whether someone has become a hermit is a more accurate diagnostic approach, not to mention a better early-warning signal.”

To ease the integration burden, McKinsey recommends a three-step approach: create simple software building blocks, expand your analytical talent base, and apply computational-modeling whenever there’s an opportunity.

An increasing number of devices


Picking apart supply chains and putting them back together more efficiently is big business. As value chains become more electronic, the Internet of Things is beginning to surface more frequently. An example is “last mile logistics,” where startups (not to mention Amazon) are clamoring to optimize fulfillment services. And it’s not just thin-margin businesses that are seeking to do this. The IoT will push companies to have updated product information, support, and transparency into all parts of the supply chain.

A recent Arstechnica piecetouched on some of the challenges when our day-to-day stuff connects to the internet. Their verdict? A disaster waiting to happen.

“These are all durable goods, kept for the long term without any equivalent to the smartphone carrier subsidy to promote premature replacement. If they’re going to be smart, software-powered devices, they’re going to need software lifecycles that are appropriate to their longevity. That costs money, it requires a commitment to providing support, and it does little or nothing to promote sales of the latest and greatest devices.”

But the Internet of Things doesn’t have to be a disaster. The upside is apparent. Customers will flock to the networks that can deliver the most value, and be genuinely useful for their everyday lives.


Another way to analyze the industry implications of the Internet of Things is to follow the money trail. If we look at CBInsights’ research, there are a few things that stand out. First, health-related investments account for more than a third of all financing activity over the last few years. As we mentioned before, healthcare is an area where IoT is already making a big impact. It’s a huge category that encompasses everything from health trackers to food-oriented QR codes and nutritional data. And as mature as some of the entrants might seem, CBInsights says more than 60 percent of deals in the IoT market have occurred at the seed or Series A stages.

The B2B angle will likely lag from an innovation perspective, but it’s picking up. As McKinsey puts it, “health-care companies must figure out how to integrate systems far beyond the hospital.”

An increasing number of devices


With all the buzz about Internet of Things capabilities, it’s easy to look past a few other things that could pose some challenges to our privacy, and even worse (only half joking), subject us to more advertising.

recent New York Times article discussed how companies are using connected parking lots to ease congestion. Follow the data trail and you can see where things might be headed.

“Imagine knowing that people who park here also park there – you’ve found the nearby stores, their affinities. You could advertise to them, offer personalized services, provide ‘passive loyalty’ points that welcome them back to an area.”

As for stuff closer to the workplace, Alex Pentland, director of MIT’s Human Dynamics Laboratory, thinks we’ll even be able to calculate and quantify human behavior more effectively by analyzing all this data that’s being generated. Writing in MIT’s Tech Review, Nick Carr explains:

“Tapping into the streams of data that flow through gadgets, search engines, social media, and credit card payment systems, scientists will be able to collect precise, real-time information on the behavior of millions, if not billions, of individuals. And because computers neither forget nor fib, the information will be reliable.”

Pentland argues that skillful collection of behavioral data will lead to “a causal theory of social structure” which will then lead to “a mathematical explanation for why society reacts as it does.”

Yes, the Internet of Things could potentially lead to an equation that can explain the actions of a society. How’s that for IoT-driven intelligence? Just goes to show that everything’s a math problem.

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