A Strategist’s Guide to the Internet of Things—Part 1
The digital interconnection of billions of devices is today’s most dynamic business opportunity.
by Frank Burkitt

http://www.strategy-business.com/article/00294

If you thought Internet of Things was not important to your company, then think again

Humanity has arrived at a critical threshold in the evolution of computing. By 2020, an estimated 50 billion devices around the globe will be connected to the Internet. Perhaps a third of them will be computers, smartphones, tablets, and TVs. The remaining two-thirds will be other kinds of “things”: sensors, actuators, and newly invented intelligent devices that monitor, control, analyze, and optimize our world…. 

,,,, This seemingly sudden trend has been decades in the making, but is just now hitting a tipping point. The arrival of the “Internet of Things” (IoT) represents a transformative shift for the economy, similar to the introduction of the PC itself. It incorporates other major technology industry trends such as cloud computing, data analytics, and mobile communications, but goes beyond them. Unlike earlier efforts to track and control large systems, such as radio-frequency identification (RFID), the Internet connection gives this shift almost limitless versatility.... 

…At present, the Internet of Things remains a wide-open playing field for enterprises. It’s young, heterogeneous, and full of uncertainty. Estimates of potential economic impact by 2020 (as tracked by the Postscapes information service) range from about US$2 trillion to more than $14 trillion. Companies small and large, old and new, are scrambling to stake out their territory. Expectations are high: One in every six businesses is planning to roll out an IoT-based product, and three-quarters of companies are exploring how to use the IoT to improve their internal operations and services. (See “Embedding the IoT in Your Business,” by Chris Curran.) Much early work is likely to focus on boosting efficiency and cutting costs, but the greatest long-term business value of the Internet of Things will involve getting to know customers—both consumers and businesses—more intimately, and providing new digital services and experiences to delight them. 

Rarely, if ever, has a single technological platform combined this much complexity, speed of development, global reach, and novelty among customers. Consider the range of interconnected systems, products, and services the IoT will enable, from simple monitoring of home temperature and security to the “quantified self” (the tracking of personal health, diet, and exercise metrics), to fully networked factories and hospitals, to automated cities that respond to the movements and interests of thousands of people at once…. 

….For these devices and many others, the greatest potential value of the IoT lies in that connection to the Internet, and to the many integrated services offered there:
To deliver these products and services requires a combination of five major types of technological offerings. As you progress up the technology “stack,” the devices become more complex and their connectivity increases. 

1. Endpoints are the single-function sensors and actuators that reach out and touch the world around them, monitoring for changes and providing feedback to adjust to those changes
2. Simple hubs are the devices that connect endpoints to broader networks. When integrated into products such as vehicle engines; washing machines; or home heating, venting, and air conditioning (HVAC) systems, the computing intelligence and storage embedded in a simple hub allows these products to adapt over time to the user’s behavior and to optimize for efficiency.
3. Integrating hubs that connect simple hubs and outside connections are relatively complex devices providing a diverse array of services that fit more or less seamlessly together. In May 2014, Apple introduced one of the first truly integrating hub offerings. Called the HomeKit, this platform is designed to bring together simple hubs from different vendors and present all of them in a single user interface on a smartphone or tablet
4. Network and cloud services provide the infrastructure of the Internet of Things. They can either be public (accessible to the population at large) or private (protected behind an organization’s firewall). These services deliver the seamless and transparent connection to the Internet that hubs require, along with the cloud computing power needed to collect, store, and analyze vast amounts of data from myriad endpoints.
5. Enhanced services is a nascent category, comprising the most technologically sophisticated components of the IoT. Enhanced services will make use of the information collected and analyzed by other platforms and services to deliver broad-based interactive functions. For example, today’s single-company telematics systems, like Progressive’s Snapshot system, are integrating hubs, connecting monitors on automobiles with software that links insurance rates to driver performance