More than 75 percent of companies are either utilizing Internet of Things technology or are heavily engaged in researching how they can deploy IoT. According to a new report from The Economist Intelligence Unit, nearly all enterprises (95 percent) will be using the Internet of Things in some respect within three years.
The Economist study, “The Internet of Things, A Quiet Revolution Gathers Pace,” notes that the current investment pace in IoT is relatively low. And 61 percent of survey respondents believe that companies that are slow to deploy IoT technologies – such as RFID and sensors – risk falling behind the competition.
Up until now, asset management or energy management have been key areas of IoT use, but over the next three years the IoT is expected to have the biggest impact on customer service products and services.
IoT adoption is expected to unlock new revenue opportunities from existing products and services, inspire new working practices or business processes and change existing business models or strategies. Thirty percent of executives believe they will increase revenue from IoT adoption. Only 9 percent believe that the IoT will not change the way their company conducts its business in a meaningful way.
The report notes that a number of developments have contributed to business adoption of the IoT, including the falling cost of underlying technologies, such as the sensors and actuators fitted to “things” to connect them to the Internet. Specifically, the cost of RFID tags, commonly used to track assets and manage inventory, dropped by 40 percent in the 18 months prior to April 2013, to about 10 cents. Meanwhile, the price of MEMS, such as accelerometers, gyroscopes and pressure sensors, has fallen by 80-90 percent over the past 5 years.
Yet, challenges still exist in the road to adopting Internet of Things, where 50 billion devices could be connected by 2020. Despite the fact that IoT is expected to have the biggest impact on consumers, low consumer awareness of IoT is predicted to temporarily slow adoption. Just under two-thirds (65 percent) of survey respondents believe that low consumer awareness is depressing demand for IoT-related products and services.
One area expected to have a major impact on consumers is the automotive sector, which is developing a large range of IoT products and services. Filip Sergeys, head of intelligent transport systems (ITS) government relations and regulations at Honda Motor Europe, says that his firm is rapidly developing IoT products and services. Honda’s work has centered around ITS, which aims to make driving safer, greener and more convenient by connecting vehicles (with embedded sensors) through wireless networks.
Vehicles will be able to communicate with other vehicles, with sensors embedded in road infrastructure and with back-end computers. “The amount of patent applications is steadily growing and this should be an indicator of the importance of the topic to Honda,” Sergeys says in the report, which was sponsored by ARM.