InsightaaS: Harvard Business Review (HBR) is recognized worldwide as a leading source of management insight and innovation. The company's blogsite often carries commentary from other world-leading sources. In August, ATN highlighted a Gartner Group post on digital CMOs. Today;s feature spotlights a contribution from investment banker Goldman Sachs looking at IoT market development.
In the article, senior equity research analyst Simona Jankowski outlines use cases that describe "the economic potential of connecting billions of devices." She, like others, identifies wearables, connected vehicles, connected homes, connected cities and the Industrial Internet as major potential IoT markets.
Jankowski identifies wearable markets, such as "fitness bands, action cameras, smart watches and smart glasses" and connected cars as categories that are emerging now, with connected home as the likely next market for broad IoT development. To put this in context, the article quotes Samsung as saying that smart home will grow from $7.8 billion in global revenue in 2013 to $15 billion in 2015. Guidance on industrial IoT deployment is more vague, but more bullish: Goldman Sachs believes that "the Industrial IoT opportunity cloud amount to $2 trillion by 2020." Pronouncements of this sort may not offer a lot in terms of tactical direction, but the magnitude and growth rates do insist that IoT should be a factor in corporate strategy.
The Internet of Things is emerging as the third wave in the development of the internet. While the fixed internet that grew up in the 1990s connected 1 billion users via PCs, and the mobile internet of the 2000s connected 2 billion users via smartphones (on its way to 6 billion), the IoT is expected to connect 28 billion "things" to the internet by 2020, ranging from wearable devices such as smartwatches to automobiles, appliances, and industrial equipment. The repercussions span industries and regions.
At Goldman Sachs, we see numerous triggers turning the IoT from a futuristic buzzword to a reality. The cost of sensors, processing power, and bandwidth to connect devices has dropped low enough to spur widespread deployment. Innovative products like fitness trackers and Google’s Nest thermostats are demonstrating the potential for both consumers and enterprises. And corporate alliances are taking shape to set the standards needed to integrate the wide array of devices in a cohesive way.
While these enablers make the IoT possible, its long-term success depends on the use cases that help realize the economic potential of connecting billions of devices, either to improve quality of life or save money. We focus on five key verticals where the IoT will be tested first: Connected Wearable Devices, Connected Cars, Connected Homes, Connected Cities, and the Industrial Internet...