by JD Sartain

What the Internet of Things Will Mean for CIOs

News Analysis
Feb 03, 20144 mins
Big DataCloud ComputingConsumer Electronics

Estimates suggest that as many as 50 billion devices will connect to the Internet by 2020. Surveys say enterprises are giving the 'Internet of Things' a cold shoulder, though, citing security, cost and integration concerns.

In a recent blog post, Frost & Sullivan analyst Andrew Milroy predicts that more data will be generated by machines, or things, this year than by human beings. For that reason, 2014 is poised to be the year when the focus of both IT buyers and IT sellers shifts to the Internet of Things, a term coined by Kevin Ashton, cofounder of the Auto-ID Center at MIT, when he and his team created the global standard system for RFID and other sensors.

Cisco Systems has re-termed this phrase the Internet of Everything, as it believes that, eventually, everything will be connected. In fact, Cisco says there are more things connected to the Internet, today, than people in the world — and very soon, adds Dave Evans, chief futurist at Cisco, “Things that were silent [will] now have a voice.”

50 Billion Connected Objects, But Enterprises Don’t Care (So Far)

In addition to a range of multimedia devices such as computers, electronics, smartphones and communication tools), these “things” include thermostats, lighting systems, door locks, office equipment, appliances, various health monitors, medical and fitness censors, farm equipment, factory and warehouse machines, and so on. Or, based on Ciscos definition, “everything” means “anything with an on/off switch.”

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Some skeptics argue that techno geeks have made these claims for years, ever since Ashton coined “Internet of Things” in 1999, but that little has changed beyond the connection of multimedia and electronic devices. Little, that is, except the hype, which continues to escalate every year.

According to a white paper by Forrester analysts Christopher Mines and Michele Pelino, there’s a minimum of connected world adoption among enterprise customers. “Our 2013 networks and telecommunications survey shows that more than 50 percent of companies have no interest and/or no plans to implement machine-to-machine or Internet of Things capabilities, while just 8 percent tell us they have implemented M2M or IoT systems.”

Lack of interest, according to Forrester, begins with security concerns (37 percent), followed by costs (32 percent), technology immaturity (25 percent), integration challenges, migration and/or installation risks and regulatory issues.

Yet ABI Research predicts more than 30 billion devices will be wirelessly connected to the Internet of Things by 2020; Cisco says 50 billion. How will this affect organizations and the decisions that CIOs must make regarding the future connectivity of “things?”

Internet of Everything Will Affect All Verticals, Businesses

Mines and Pelino suggest that CIOs link connected-world technology with business outcomes. “CIOs will be a crucial catalyst for their organizations to capture emerging opportunities and harness the power of connected-world solutions,” they write. “Context-aware, location-based applications and services change how companies engage with and serve their customers. CIOs should straddle the line between what’s possible from a technology perspective and what’s meaningful to the business.”

Frost & Sullivan’s Milroy says the “explosion” of Internet of Things activity over the next few years will be driven by “the nexus of low-cost sensors, cloud computing, advanced data analytics and mobility.” Transportation and logistics represent the biggest revenue opportunities today for an Internet of Things ecosystem, she adds.

[ Analysis: Everyday Objects Get Connected in Internet of Things ]

[ More: The Internet of Things Needs a Lot of Work ]

The deployment of low-cost, IP-enabled sensors within things that move products around — and operate within the actual products — opens vast opportunities far beyond just the supply chain optimization, Milroy says. There are gains to be made in many industries, she says — transportation, healthcare, pharmaceuticals, manufacturing, energy management, facility management, security and surveillance, utilities, telecom, finance, insurance and many more. Basically, every sector in every system will be part of the connected world.

Forrester analysts say that CIOs have four priorities when it comes to the Internet of Things:

  • Identifying business outcomes.
  • Partnering with business leaders to ensure that organizational and skill sets are aligned.
  • Addressing security issues and data privacy concerns.
  • Evaluating and expand staffs’ software skills.

“Very few connected-world systems are turnkey and, therefore, [they] require architecture, integration, and agile development expertise,” Mines and Pelino write. “Implementing these systems will require joint business-technology task forces with analytic’s experts alongside operations, facilities and product development.”

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Finally, while all these “things” are expected to be IP-enabled, the IT industry will need to embrace standard protocols for the true potential of the Internet of Things to be realized, Milroy says. “‘Things’ may not be able to communicate with each other and the people that engage with them. There remains a risk that we create an ‘Internet of Silos.'”