There has been too much talk in recent times about the Internet of Things as well as how technology will revolutionize the way we interact with the world around us. But what exactly is the “Internet of Things”?
The internet of things, abbreviated as IoT, simply refers to the connection of previously unconnected things to the internet. Also, the IoT encompasses incorporating sensors to things, such as manufacturing processes in a bid to automate factories. Thanks to the IoT, we have high-tech components like barry mounts that will help take us into the future of space travel.
However, investing in this colossal technology sector can be quite overwhelming. In that light, we present you some things you should know if you’re looking to invest in the IoT.
Understand Its Worth
Cisco Systems projects the Internet of Things to be worth as high as $19 trillion by 2025. Moreover, the total number of devices that will, in the long run, be connected to the internet is astounding. In fact, according to Cisco, there will be close to 50 billion IoT gadgets by 2020. This will include things such as self-driving cars that connect to the cloud for geospatial services and vehicle-to-vehicle communications.
Furthermore, the industrial internet, which is a component of the larger Internet of Things, will add about $15 trillion to the global economy by 2030. All these estimates serve to show that the IoT will definitely be a massive market.
Know the Risks
To begin with, you should keep in mind that the IoT projections could be so high that the market could fail to attain its full potential. There are also practical risks to this gigantic technology sector, and they include security and privacy.
A case in point is the recent Mirai botnet attack, which led to major website outages for leading corporations like:
- The New York Times
There’s also the case of Fiat Chrysler’s Jeeps, which were hacked by wired, leading to 1.4 million cars getting recalled in a bid to fix them.
Such problems could end up undermining the development of IoT or result in businesses making losses if consumers realize that IoT devices are unsafe and don’t guarantee their privacy.
Select a Subsector
Numerous tech companies are capitalizing on the Internet of Things. They include:
- Sensor manufacturers
- Semiconductor companies
- Software analytics companies
You need to narrow to a particular subsector depending on the degree of exposure you want your business to have to the Internet of Things. For instance, General Electrics is making massive investments in the IoT. In fact, they have already generated close to $6 billion from their analytics software. However, this just represents about 4.5% of the organization’s total revenue.
It’s worth noting that small sensor makers have a great potential of having the best exposure to the IoT. This comes with higher risks and the potential for higher returns.
Don’t forget this is a Long-term Venture
While the internet of things has the potential to revolutionize the world around us, the transformations will take a while. For that reason, it is imperative that you consider taking the long-term approach with the internet of things. In fact, many organizations that are implementing their IoT strategies now understand that it will take some time before they see tangible returns on their investments.
The internet of things is set to significantly transform how we interact with our environment. However, you need to understand what it takes to invest in this massive technology sector, and that’s where this article comes in handy.