According to a recent McKinsey Global Institute report, the networking efficiencies and opportunities generated by the Internet of Things may have a global economic impact of as much as $11 trillion per year by 2025 across multiple sectors. The same report also suggests that nearly 70% of the projected economic value will eventually come from the use of sensor technology and swarm intelligence among B2B users.
As development in this sector continues to happen, it becomes evident that this technology is here to stay and grow. Currently, companies like Apple (Homekit Products) and Google (Brillo) are working on the consumer side implementation of IoT. As mentioned above, there is a huge scope for enterprise level development of IoT technologies; there are firms like Xively and Etherios operating just in this area.
It has been forecasted that the complexity of Internet of Things technologies, the limited capabilities of many customers to implement them, and the need for interoperability and customization will provide numerous opportunities for hardware, software, and service providers to offer customers end-to-end IoT products and services.
The idea behind the concept of IoT is- machines interacting with each other without human intervention, this is where the beauty of interoperability lies. Exhibit 1 shows the scope that will be generated in various sectors with interoperability and customization facilitated by IoT technologies.
Although the future of IoT looks extremely promising, one can not ignore the flip side of this technology. The biggest challenge cropping up with the implementation of IoT would be data security, for every connected device and interoperable product would increase the “surface area” available for breaches, and every node could be an entry point. Hence, the risk heightens exponentially. For example, technical glitches like a compromised medical monitor could pose life-and-death risks.
Exhibit 2 shows the loopholes in IoT technology and highlights some of the common risks associated with it. Nevertheless, the table also renders solutions to tackle those challenges.
According to the report, at the moment there are over 9 billion connected devices globally, and this number is expected to grow by 3X over the next decade. Here are some of the ways organisations should prepare their IT units to capitalize this opportunity.
- Actively participate in setting technology standards
- Factor connectivity issues into design
- Embrace a continuous-delivery model for software and services
- Consider retrofitting existing products and systems
- Update cybersecurity strategy and privacy protocols
- Explore modularity, interoperability, and open-source technologies
- Consider different organizational structures that enable agile software development
To view the original release by Mckinsey, click here.