About 15 years ago, I and a group of smart and talented people started Dust Networks - one of the early Internet of Things companies. And 10 years before that Echelon had the vision of connecting everything (check out this article in Wired). We had front-row seat as the Internet of Things evolved and grew, and I’ve been building IoT businesses ever since.
Today the Internet of Things is in the mainstream news but many people don’t have the experience of the IoT in their lives. Every week someone asks me the question: Is the Internet of Things really a Thing? Or, for non-Millennials: When will the Internet of Things finally take off?
Well, I’ll let you in on a secret: the IoT is already here!
Let me explain. In the tech industry, there’s already a lot of talk about the Internet of Things, which Wikipedia defines as:
The Internet of things (IoT) is the inter-networking of physical devices, vehicles (also referred to as "connected devices" and "smart devices"), buildings, and other items embedded with electronics, software, sensors, actuators, and network connectivity which enable these objects to collect and exchange data.
But companies selling physical products (TVs, toasters, toys, tools, transformers, etc) do not sell these products as part of the IoT, and customers don’t buy them as IoT products -- they buy them as products with an online component that makes the product smarter or more useful. Maybe a product with an app. A Wi-Fi speaker to play Spotify, or a TV to play Netflix, or a home security system to call the police when a burglar breaks in, or a car that shows the traffic jam. Any company marketing their product as an IoT product is missing the point.
That said, there is an IoT industry, but it is largely focused on infrastructure: the hardware and software necessary to make these physical products connected, the software systems to aggregate and analyze the data coming from these products, and the integrations to make the products more valuable to consumers. But this IoT industry is very small in comparison to the size of the industry that is enabled.
The market for IoT products is huge -- and not just in the future, but today. Let’s take a look at five specific examples of products you may already have and use, that you might not recognize as part of the IoT:
- Cars. 21 million connected cars shipped in 2016, and an estimated quarter billion connected cars will be the road by 2020. Car companies connect cars to provide better service, including showing traffic and providing proactive service notifications. Insurance companies use connected car data to give discounts to good drivers.
- TVs. More than half of TVs shipped today have internet connectivity, and the percentage keeps increasing. TVs are much more valuable when they’re connected to the internet so they can access new content from both cable companies and OTT services like Netflix, Amazon Video, and others.
- Home security systems. Around a quarter of homes in the US have professionally monitored security systems -- and these systems are connected to agents or systems that can take action when a security issue is identified. ADT has been making connected security systems for a hundred years, and while we definitely wouldn’t have called them IoT products in 1902, we should today.
- The electricity grid. The electricity meter on the side of your house is very likely connected to the internet, and the transformer on the pole outside your house as well. Utilities around the world are connecting the grid for higher reliability, lower costs, and improved power quality. Companies -- like my former company Trilliant - don’t label themselves as IoT companies, but as smart grid companies.
- Smartphones. The biggest category of connected products is smartphones: more than 2.6B smartphones are connected today, and while the primary function of the products is for users to send and receive data, these smartphones are rapidly becoming part of the Internet of Things. These phones are traffic sensors for Waze. Coverage detectors for cellular operators. And customer trackers for retailers.
While you may not think of cars, TVs, home security systems, electric meters, or smartphones to be part of the IoT, they absolutely are: these are all “things” that are enhanced by their connection to the internet. These companies will not go to IoT conferences, will not market their products as IoT products, and will not identify themselves as IoT companies. And they shouldn’t.
The IoT is not a quick change or a short-lived market trend. It’s a continuation of something that has been happening for years: making things better through connectivity, communications, and computing.
Since 2007, Steve Jobs showed us how Apple was ushering in the Post-PC world. Now 10 years later we’re already well into the next phase, the post-Smartphone world, where connectivity and intelligence are built into every product we buy. The post-Smartphone world -- the IoT world -- is happening under the surface, unnoticed by most consumers. There will be no Steve Jobs eloquently showing us how we’re entering this new era, there will be no company saying that the IoT has arrived. But more products will be connected and products will just keep getting better. The fact that it’s the IoT behind it all will just be our little secret.