The Internet of Things Begins to Take Shape

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The Internet of Things Begins to Take Shape

Today, people connect to the Internet by using dedicated devices like laptops and smartphones. But what happens when virtually every thing is an Internet device? The result will be the "Internet of Things"—a vast, invisible, global network in which nearly every product and physical object, including toasters, trees, milk cartons, mall parking spaces, cars, roads, wristwatches, and medical equipment will be tagged with sensors that will gather and transmit data about people's consumption, usage patterns, location, and more.

Consider that, in the 1990s, 1 billion people connected to the Internet with desktop computers and laptops. Then, in the first decade of the 21st century, 2 billion more people connected to the Internet with mobile phones. Now consider this: By 2015, according to Cisco Systems, 25 billion things will be connected to the Internet, and to each other—and five years after that, in 2020, the number will double to 50 billion.

Why is the Internet of Things (IoT) primed to explode now? Advances in several key technologies are converging, as outlined in a recent Goldman Sachs report by Simona Jankowski and her colleagues.1 These technologies include:

  • Cheap sensors. Sensor prices have dropped more than 100 percent over the past decade, to an average of 60 cents.
  • Cheap bandwidth. The cost of bandwidth has declined by a factor of nearly 40 times over the past 10 years.
  • Cheap processing. Processing costs have declined by nearly 60 times over the past 10 years, enabling more devices to be not just connected, but smart enough to know what to do with all the new data they are generating or receiving.
  • Smartphones are now becoming the personal gateway to the IoT, serving as a remote control or hub for the connected home, connected car, or the health and fitness devices consumers are increasingly starting to wear.
  • Ubiquitous wireless coverage. With Wi-Fi coverage now ubiquitous, wireless connectivity is available for free or at a very low cost.
  • Big data. As the IoT will, by definition, generate voluminous amounts of unstructured data, the availability of big data analytics is a key enabler...

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