Why the government is right to invest in IoT

Written by Matthew Larbey, Product Strategy Director, VIRTUS Published 2015-04-20 08:00:00

Following George Osborne's recent announcement that the UK government plans to invest £40m in the Internet of Things (IoT), the spotlight has once again been placed on the digital economy.

There has been much speculation about IoT over recent years and if George Osborne's budget tells us anything, it's that it's finally happening.

In actual fact, IoT has been 'happening' for a while; but now it's going mainstream, with devices like smartphones, tablets, smart watches, smart meters and even connected homes and cars playing a part.

How this latest budget announcement will be perceived by the general public, i.e. those not au fait with the technology industry, is still yet to be known, especially because to the majority IoT is just an acronym for something they don't understand or care about.

However, with Gartner estimating that IoT will have 26 billion units installed by 2020 and with more items connecting to the internet on a daily basis, it's something that the general public should start to take note of.

It's not just the average consumer who needs to take heed, however, because as IoT deployments increase, they will generate large quantities of data, all needing to be processed and analysed in real time. This will have significant implications for the data centre as workloads increase and leave providers facing new security, capacity and analytics challenges previously not experienced.

And what's more, this is all before IoT has truly taken off!

Today, the majority of data centre traffic is self-generated by applications hosted on servers in the facility or communicating with other data centres. However, as Machine to Machine (M2M) communication increases, the impact on the data centre will be huge.

We're already seeing data levels from standard PC and laptop devices being outstripped by those from smartphones and tablets; and as more businesses move towards a mobile workforce and embrace bring your own device policies, this trend will continue.

Just imagine how this will look when IOT gathers momentum. We could be faced with a whole new set of connected devices, all generating data that needs to be stored and analysed somewhere.

For example, a recent Forrester report stated that 82% of companies will have IoT applications implemented across their business in some way by 2017. This is a pretty significant number and gives a good indication of the rate data will continue to grow at as more and more businesses increase their focus and rollout of IoT technologies.

Until recently, developing and deploying IoT solutions was a time consuming and challenging endeavour. The complexity of M2M technology, meant projects required complex integration engineering and long development timelines that often led to projects stalling before they got off the ground.

However, as technology advanced - simplifying IoT implementation – the road to market has made the IoT much more achievable, which is leading to this spike in data creation. In short businesses who have been talking about IoT and need to ensure they have the right technologies in place to deal with the influx of data they are about to receive.

Gartner talk a lot about the modern enterprise needing to support a Bi-Modal approach to their IT – managing the established 'systems of record' applications and processes under tight controls with established practices. IoT on the other hand very much falls into the other category of this Bi-Modal approach – 'systems of innovation' that need rapid implementation, quick time to market and the ability to continually evolve from an IT perspective. The risks are higher, but so are the benefits as those companies that are able to embrace this dual approach to IT are able to quickly gain innovation momentum ahead of their competitors.

The water is starting to creep over the dam, and businesses who don't act now to ensure they have the right infrastructure strategies in place may find themselves flooded with far too much data than they know what to do with. Here are a just few internet of things statistics to help provide some perspective:

Top 10 facts about the Internet of Things:
  • During 2008, the number of things connected to the internet surpassed the number of people on earth.
  • By 2017, the IoT market will surpass the PC, tablet, and phone market combined.
  • 82% of companies will have IoT applications implemented into their business in some way by 2017.
  • With IPv6, we will have 340,282,366,920,938,463,463,374,607,431,768,211,456 possible Internet addresses. (That's 100 for every atom on the face of the earth.)
  • According to Cisco, only .06% of things that could be connected to the Internet currently are, which means 10 billion things out of the 1.5 trillion that exist globally are currently connected.
  • A recent finding from IDC predicts that the worldwide IoT market will grow to $7.1 trillion by 2020, compared to $1.9 trillion in 2013.
  • The smart home industry was the leading industry in the IoT market in 2014 with $79.4 billion in revenue, followed by smart cities at $59.2 billion and smart building/infrastructure at $25 billion. Those numbers are expected to increase substantially by 2020.
  • Global cumulative smart meter deployment increased by 500% between 2008 and 2012, from 46 million to 285 million meters installed, with a further increase to almost one billion installations projected before the end of 2018.
  • By 2020, it's estimated that 90% of cars will be connected to the internet as compared to 10% in 2012.
  • Gartner says there will be 26 billion connected devices by 2020. Cisco says there will be 50 billion, Intel says it will be 200 billion, and the IDC says 212 billion. In any case, these are all really big numbers.