English | EN The Business Opportunity of the Internet of Things?
Nov 13, 2013
The answer is simple: in all facets of the economy. The current discourse on things makes it clear that it will be impossible to elude the impact of things. The message resounding on many fronts is that a THINGS tipping point is in the pipeline. In comparison to fifteen years ago, economic expectations have exploded. The enormous reduction in the cost of chips and sensors is contributing to this anticipated growth. In the past five years, the costs of Micro Electro-Mechanical Systems (MEMS) have decreased by 80 percent and people are now working with chips that are just as cheap as the chips one can eat. We have seen how the RFID market is evolving: a fourfold increase in 2014 to 20 billion dollars within three years.
In terms of numbers, the loudest drumroll is currently being produced by Cisco that, in June 2013, estimated the present potential of things at 613 billion dollars, and presumes that the market will amount to no less than 14,400 billion dollars in 2023. In this context, Cisco is talking about savings — the reduction of waste — plus the direct sale of products.
General Electric, which primarily focuses on its Industrial Internet, beginning with sensors in turbines — Things that spin, as GE puts it — gives more modest figures. Initially they speak about thousands of billions: 32,300 as the business opportunity of the total Industrial Internet, and by 2025 possibly even 82,000, but GE considers savings of 150 billion to be realistic if all machines become smarter.
McKinsey assesses the economic impact of the Internet of Things at somewhere between 2700 and 6200 billion dollars in 2025, with the healthcare sector, infrastructure and public sector services as the most promising domains. McKinsey’s figures have not taken wearable computers, such as Google Glass or the Fitbit, into consideration. These things are classified under Mobile Internet, whose total economic impact in 2025 is estimated to be worth 3,700 to 10,800 billion dollars.
Forrester Research avoids making hard predictions about the impact of things. Sarah Rotmann Epps, an analyst at Forrester Research, draws a comparison with plastics in the fifties. Estimating the economic impact a new basic material will actually have — plastics, IoT, etc.– is an impossible task. However, the fact that the impact will be substantial is without doubt.
More on SMACT and the business opportunities of Things in our new report THINGS: Internet of Business Opportunities that deals with the THINGS tipping point. Connected things offer new opportunities to combat waste in the broadest sense of the term. This waste occurs among all parties: clients, suppliers, governmental bodies, service providers and the manufacturing industry. The report by VINT offers an overview of recent developments and tips to accelerate your THINGS approach.
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