You’ve heard it before. IoT. The Internet of Things. Everyone from Forbes to trade magazines are talking about it, and it’s often referred to as the ‘fourth industrial revolution’. In Industrial manufacturing, smart systems are so prevalent that they led to a new term: Industry 4.0. And according to the Consumer Technology Association, the drive for smart products in the U.S. consumer technology industry will lead to $292 billion in retail revenues this year. But what exactly is the internet of things? And what impact is it having on your business right now?

The Internet of Things – sensors and connectivity for all

What is IoT?

The Internet of Things, or IoT, was a phrase coined by Kevin Ashton in 1999, but is an idea that’s been around since Nikola Tesla first experimented with wireless electricity and lighting. Simply put, it refers to connecting any physical object or device to the internet or to each other. These ‘smart’ devices can collect data or communicate it to an app, the cloud, or other smart devices.

Who uses IoT?

If you make or sell products or systems, chances are that IoT will have a massive impact on you personally. Gartner estimates that there will be 8.4 billion connected devices by the end of this year alone. These connected devices will run in every conceivable industry, with the majority in the consumer segment. But smart devices run the gamut from smart TVs to security camera systems, electronic meters, and healthcare applications.

It’s probable that companies in your industry have already launched smart products into market, or at least are prototyping different concepts to find the best use case.

Imagine a day filled with connected devices. You sit up in bed, which triggers the lights to turn on. You tap an app on your phone and the coffee maker brews your coffee while you shower. The office building where you work has a smart lighting system too. And the manufacturing plant across the street will have an automated production line, with smart safety measures and sensors that detect health issues in the environment. The hospital a few blocks away uses smart medical cabinets that notify nurses if the temperature is off. The supermarket next door uses the same technology to alert workers if products are about to expire, or how much produce was sold. Even the streets around you are smart: sensors in trash cans alert the local waste management center when it’s time to empty them, saving time and improving efficiency for the cleaning teams.

Smart shelves concept. The Seebo smart product platform
Smart shelf features. Image: Seebo

Today, we aren’t far from this scenario. Some of the biggest industries in the world have already ‘gone smart’, with many companies vying to launch the most innovative smart product or system. So why are these companies spending extra money on sensors and connected technology?

5 Reasons why IoT matters for you

1. Data is king – Sensors equate to data, and connectivity means control. Building a smart product enables manufacturers to harvest data about features usage that can help them improve their product line. The ability to collect, transmit and receive data also opens up new possibilities for users, whether that user is a factory manager in a control room monitoring workers’ health and safety conditions, or an athlete tracking and analyzing their performance. This machine learning leads to valuable insight that can improve user performance, company decision-making or operational efficiency.

2. Market disruption – It’s brutal, but today you must get smart or get out. Remember Blockbuster Video? The giant country-wide video store chain went out of business when Netflix started offering rental by mail and streaming media. Technology mixed with great ideas has always caused disruption, and IoT is the single most disruptive force that is changing how industries operate. So – are you going to be the next Netflix, or Blockbuster?

3. Connected products increase customer engagement – Products with connected apps offer a new level of communication with customers. It’s easy to ask customers questions, get feedback on product features, suggest add-ons, and even remind them when it’s time to buy a new supply. Today consumers buy in large part based on their emotions towards a brand, as much as for a specific product. The increased engagement that a smart, connected product offers leads to greater emotional engagement and brand loyalty.

A smart water pressure valve increases business value through smart features that cut costs for consumers, and digital services through the connected app. Source: Seebo

4. Benefits to Businesses – Businesses are already the primary adopters of smart systems. The ROI for this market includes increasing productivity, improving health & safety, reducing operational costs, accessing new markets, and developing new product offerings. According to a recent survey of over 1,000 enterprise buyers, 90% of organizations will increase IoT spending over the next 12 months, and more than 70% are currently gathering data for IoT initiatives.

5. Turning products into services. – More and more industries are turning to subscription-based business plans to increase revenue, and the Internet of Things provides an easy way to change existing products into service subscriptions with ongoing revenue streams.

Ikea’s Iris users pay a subscription for its voice-control smart lighting capability and integration with smart home systems.

There are endless opportunities for connectivity between physical products and the internet, and literally thousands of different behaviors and benefits for going smart. Yes, there are certainly challenges to launching smart products to market, including the development process itself, security, and privacy issues. Another issue is how to track, store, and make use of the vast amount of data produced by smart devices with sensors. These are hot topics that have been around since the advent of the internet, and as smart products and systems become more and more prevalent, solutions to these issues will inevitably arise in parallel.

The value of IoT, and the questions around it, are growing each year as smart products continue to widen their impact on manufacturers and businesses. With the Internet of Things and device connectivity expanding its impact in nearly every industry, companies who ignore its power to disrupt industries and set new standards will soon find themselves left behind in the dark age.