The IoT Is Getting Industrious

Thus far in 2015, three major research reports that probed the Internet of Things came to similar conclusions: The Industrial IoT is where the rubber meets the road.
By Mary Catherine O'Connor
Aug 04, 2015

In January of this year, Accenture announced its prediction that Industrial Internet of Things (IIoT) applications could boost the global economy by $14.2 trillion throughout the next 15 years. The company based that forecast on the expected growth of machine-to-machine technology enabling manufacturers to not only fulfill client orders, but also measure and predict the outcomes of industrial systems. Accenture calls this economic boost the "outcome economy." These outcomes, for example, might include guarantees that end users of IoT-enabled products will save energy or increase yields.

Last month, the McKinsey Global Institute (MGI) reported that the economic impacts from Internet of Things technologies could reach $11.1 trillion by 2025. And at the top of its list of sectors to reap those profits sits factories. Using IoT technologies for such applications as operations management or predictive maintenance, MGI found, could account for anywhere from $1.2 trillion to $3.7 trillion by the quarter-century mark.

Just last week, Juniper Research offered its own rosy picture, predicting that the number of connected devices will grow by 285 percent during the next five years. And the leading applications leveraging those estimated 38.5 billion IoT nodes by 2020? You guessed it: They're in the industrial and other enterprise sectors.

None of this is to say that more consumer-oriented products and services will not hit pay dirt. In fact, Juniper Research predicts, smart-home, health-related and connected-vehicle applications will churn out higher average revenue per user than industrial and enterprise or public infrastructure applications. But players in the industrial sector, it believes, will see a higher return on investment.

Obviously, it's far too early to know whether Industrial IoT applications will indeed lead the pack, or if they'll generate huge savings or revenue streams. But based on what I've been seeing, there is a fair bit of energy and enthusiasm behind industrial applications, as well as an eagerness to develop and test standard approaches. To wit: The Industrial Internet Consortium (IIC)—an industry group formed in 2014 by AT&T, Cisco, General Electric, IBM and Intel to accelerate the deployment of networked sensor-based technology—has been rolling out testbeds this year, which are being deployed in order to either focus on best practices, use cases and the identification of areas of business opportunity, or to refine a technology, security or software architecture. All of these testbeds are focused on using open standards.

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