The Internet of Things (IoT) has been an inspiration to business and science alike for around 25 years now. Machines and systems, communicating independently with one another, controlling and optimising themselves – this is the next stage of automation, referred to as Industry 4.0. Its impact on productivity and the value chain will be comparable to the first three industrial revolutions – the mechanisation of production thanks to water and steam power, the electrification of mass production, and the automation of individual machines with electronics.
This vision becoming reality is linked to a whole range of developments: The prices of sensors and energy-saving mini-processors have dropped massively due to consumerisation, especially in the mobile segment. In all fields of ICT – from the internet to device hardware to software – standard platforms have been established that simplify networking massively. Modern cloud technologies enable the central management of any number of distributed systems. Mobile communications infrastructures enable machines, devices and "things" to communicate with one another throughout the world with great flexibility. There has also been massive progress in system integration and in the real-time processing of large amounts of data in the form of big data analytics.
Because all of these technologies in isolation have since crossed the threshold of mass marketability, it is possible that the Internet of Things (IoT) will experience explosive expansion in the years to come. By 2020, it is expected that over 50 billion objects, machines and devices will be connected to the Internet worldwide. This enormous growth will cause further price reductions, thereby opening up additional fields of use.
Among the most important applications in the Internet of Things are the remote monitoring and control of buildings, machinery and equipment. Customer services, for example, are much better placed to help when they have a direct feed of sensor data from devices available to them. Pay-as-you-use models also become possible. For example, car insurance would only need to be paid for the time period in which the sensors report usage via the mobile communications network.
Over time, more and more systems will be added to this, using the intelligence that the networking provides to operate largely autonomously. Just like GPS data can already be analysed today to predict traffic jams with great precision hours in advance, the analysis of networked sensor data can also predict machine damage before it even occurs. Building automation systems can automatically adjust themselves using connected sensors. In medicine, diseases can be identified using a great range of networked analysis data before manifesting themselves.
This forecasting capability bears the potential of the highly-networked Internet of Things to become the fourth industrial revolution.
It will enable entirely new business models and make old ones obsolete. To enable businesses to utilise these opportunities for a competitive advantage, however, they need to overcome a number of challenges. IoT technologies require specialised ICT expertise that is difficult to develop internally. Ensuring the security of networked objects, machines and devices requires in-depth specialist knowledge in particular. Internal expenditure can be minimised by entering into partnerships with selected specialist providers who are capable of performing the design, implementation and operation much more efficiently.