What is the Internet of Things (IoT)?

Last month we introduced four technologies that will be trending (or will continue to trend) in 2017. Among them was the Internet of Things (IoT).

 

 

 

What is the IoT?

 

The Internet of Things (IoT) refers the network of physical objects that monitor, collect and communicate data to one another wirelessly. Chances are high you are using one of these devices today. IoT devices are prevalent in many businesses and homes from everything to smart thermostats, security cameras and lighting, health tracking devices, even smart pet feeders and smart toothbrushes.  Gartner estimate there will be more than 25 billion connected devices on earth by the year 2020. Their purpose: to collect and communicate information.

 

If you are a small business owner, you may be wondering, “isn’t IoT one of those tools only enterprise businesses use?” The answer is no. IoT offers great potential for improvements for businesses of all sizes and across all industries.  The primary benefits of IoT projects include reduced operating costs, increased productivity and the expansion of new product offerings.

 

How are Companies Using IoT?

 

Below is a handful of examples of companies and industries who are using IoT devices to achieve tangible business results:

 

Bigbelly – Bigbelly is a waste management company founded in 2003. They manufacture solar-powered trash compactors with sensors that monitor how full the cans are. When the trash cans are in need of emptying, a notification is sent to the local waste management company responsible for the trash collection. The benefit to the waste management company is the elimination of unnecessary collection trips saving time and fuel costs.

 

Caterpillar – Caterpillar, manufacturer of machinery and equipment, has incorporated an IoT solution in its equipment with a goal of helping their clients to better maintain, monitor and optimize their fleet. Unplanned equipment failures lead to downtime and waste. To prevent these losses, equipment sensors placed on equipment alert users to maintenance needs before the time of failure. This allows maintenance supervisors to know of problems before they occur so repairs can be scheduled.

 

Progressive Insurance – Chances are you’ve seen advertisements for Progressive’s Snapshot service. Snapshot is an IoT device that connects to the user’s vehicle and logs driving habits such as speed, the number of hard brakes and the actual number of miles driven. Progressive uses the information gathered by the device to accurately price insurance and reward safer drivers with reduced car insurance premiums.

 

Liberty Mutual – Liberty Mutual is another insurance company who is taking advantage of IoT to reduce losses. They have partnered with Google Nest to implement smoke and carbon detectors in homes. The Nest unit is provided to new subscribers free of charge. These individuals also receive a discount on their home insurance premiums. The benefit to Liberty Mutual: reduced losses due to the verification of working smoke detectors in the insured’s home.

 

Farmers – Farmers are also reaping the benefits offered by IoT solutions. Spirent Communications recently unveiled a solution using sensors to determine moisture levels of plants and trees.  When a plant needs to be watered, the solution turns the sprinklers on automatically to get the correct level of soil moisture for each plant. When the correct moisture levels are reached, the solution turns off. As a result, there is no water waste yielding a higher return on investment.

 

Retailers– Unless you performed all of your holiday shopping online this year, you undoubtedly saw advertisements in retail stores for “free wi-fi!”  Retailers use beacons to interact with shoppers’ smartphones in order to gain intelligence about their customers. When a shopper connects to the store’s WiFi, the beacons track the customer’s path through the store. This helps the retailer identify the most trafficked areas in the store helping them to identify where to place premium products for highest visibility.

 

A Word of Caution

 

IoT technology and the “big data” collected by these devices can provide great benefit to businesses, but they are not without risk. Increased cybersecurity threats are the biggest risk associated with IoT devices. The more connected your business, the more vulnerable it becomes. The more data you collect about your customers, the more information is subject to theft.  As with any technology used in your business, if you plan to deploy an internet-connected device, you must plan for how you will adequately protect the data you collect from it.

 

When implementing an IoT related project, start small. Don’t try to do too much at once. Decide what you want to measure and why. Quantify the business benefits you expect to gain from the project. Set goals.  Collect the data, protect the data and put it to use. There are many tools already available to help you discover and implement data-driven projects for your industry, and many more will become available in the years ahead.  Don’t jump in without a plan. That being said, don’t delay in your planning for long. IoT technologies are disrupting industries. It is better to be a disruptor than to be disrupted by your competitor who saw the opportunity and seized it.

 

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