The world around us will be “connected” in the future. That’s the internet of things in a nutshell. Our cars, homes, and cities will be seamlessly communicating with each other. People are ready for Internet of Things and it keeps growing.
The Internet of Things (IoT)—a sophisticated network of objects embedded with electronic systems that enable them to collect and exchange data—is disrupting technology and changing the way we live. The functionality of IoT-enabled cars is transforming the auto industry—from the ultra-connected Tesla to Google’s self-driving cars—and Uber hopes one day to chauffeur you to your destination in an autonomous vehicle.
Though “only” 29% of today’s organizations have embraced IoT, primarily to improve efficiencies and lower costs, that figure is expected to grow to 43% by the end of this year, according to Gartner. Another 21% of the organizations Gartner surveyed said they intend to deploy IoT-related technologies “after 2016.” In total, almost two-thirds of companies either have, or soon will have, IoT as the backbone of their business.
The expansion of IoT beyond the heavy industry markets is at least part of the reason Gartner expects there will be a whopping 6.4 billion connected “things” by the end of this year, a 30% jump from 2015’s 4.9 billion. Widespread adoption across industries is likely behind the astronomical IoT market revenue estimates, too. One such estimate values the IoT market at $14.4 trillion by 2022.
IBM, like Alphabet, doesn’t share revenue specifics of its IoT efforts. However, as part of CEO Ginni Rometty’s “strategic imperatives” initiative, IoT played a part in the group’s 26% jump in revenue — after adjusting for currency — to $28.9 billion in 2015. The largest piece of IBM’s strategic imperatives is business analytics — up 16% to $17.9 billion — a key feature of Watson and critical to most any IoT solution.
Alphabet’s Nest smart-home hub is at the core of its customer-facing IoT products, but it’s not stopping in the home. Android Auto is already connecting the world’s cars to the Internet, and its self-driving car tests continue to inch closer to becoming consumer-ready. A car equipped with Android, or some other operating system, is quickly becoming more than a nicety. According to a recent survey of U.S. and U.K. new-car buyers, consumers valued a car’s infotainment system and capabilities more than its performance.
The biggest upside to Alphabet’s IoT plans isn’t how many Nest units it sells, though that may have helped boost Alphabet’s “other revenues” up 24% to $2.1 billion in Q4. The most valuable aspect of IoT for Alphabet will be data.
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