The Internet of Things: Why now and how big?

IoT_ABI-CarsNow that it has been established that the Internet of Things is the most hyped “emerging technology” today, and that the term—and the associated technologies—is far from being new, the only question to be answered is Why the sudden surge in interest in 2014?

That’s the question I put to a number of tech luminaries earlier this year. Bob Metcalfe, inventor of the Ethernet and now Professor of Innovation at University of Texas at Austin, is familiar with the sudden prominence of technologies, coming after lengthy incubation periods. Metcalfe points to scribbles like me as the main culprit: “It’s a media phenomenon. Technologies and standards and products and markets emerge slowly, but then suddenly, chaotically, the media latches on and BOOM!—It’s the year of IoT.” Hal Varian, Chief Economist at Google, believes Moore’s Law has something to do with the newfound interest in the IoT: “The price of sensors, processors, and networking has come way down.  Since WiFi is now widely deployed, it is relatively easy to add new networked devices to the home and office.”

Janus Bryzek, known as “the father of sensors” (and a VP at Fairchild Semiconductor), thinks there are multiple factors “accelerating the surge” in interest. First, there is the new version of the Internet Protocol, IPv6, “enabling almost unlimited number of devices connected to networks.” Another factor is that four major network providers—Cisco, IBM, GE and Amazon—have decided “to support IoT with network modification, adding Fog layer and planning to add Swarm layer, facilitating dramatic simplification and cost reduction for network connectivity.” Last but not least, Bryzek mentions new forecasts regarding the IoT opportunity, with GE estimating that the “Industrial Internet” has the potential to add $10 to $15 trillion (with a “T”) to global GDP over the next 20 years, and Cisco  increasing to $19 trillion its forecast for the economic value created by the “Internet of Everything” in the year 2020.  “This is the largest growth in the history of humans,” says Bryzek.

These mind-blowing estimates from companies developing and selling IoT-related products and services, no doubt have helped fuel the media frenzy. But what do the professional prognosticators say? Gartner estimates that IoT product and service suppliers will generate incremental revenue exceeding $300 billion in 2020. IDC forecasts that the worldwide market for IoT solutions will grow from $1.9 trillion in 2013 to $7.1 trillion in 2020.

Other research firms focus on slices of this potentially trillion-dollar market such as connected cars, smart homes, and wearables. Here’s a roundup of estimates and forecasts for various segments of the IoT market:

ABI Research:  The installed base of active wireless connected devices will exceed 16 billion in 2014, about 20% more than in 2013. The number of devices will more than double from the current level, with 40.9 billion forecasted for 2020. 75% of the growth between today and the end of the decade will come from non-hub devices: sensor nodes and accessories. The chart above is from ABI’s research on smart cars.

Acquity Group (Accenture Interactive): More than two thirds of consumers plan to buy connected technology for their homes by 2019, and nearly half say the same for wearable technology. Smart thermostats are expected to have 43% adoption in the next five years (see chart below).


IHS Automotive: The number of cars connected to the Internet worldwide will grow more than sixfold to 152 million in 2020 from 23 million in 2013.

Navigant Research: The worldwide installed base of smart meters will grow from 313 million in 2013 to nearly 1.1 billion in 2022.

Morgan Stanley: Driverless cars will generate $1.3 trillion in annual savings in the United States, with over $5.6 trillions of savings worldwide.

Machina Research: Consumer Electronics M2M connections will top 7 billion in 2023, generating $700 billion in annual revenue.

On World: By 2020, there will be over 100 million Internet connected wireless light bulbs and lamps worldwide up from 2.4 million in 2013.

Juniper Research: The wearables market will exceed $1.5 billion in 2014, double its value in 2013–

Endeavour Partners: As of September 2013, one in ten U.S. consumers over the age of 18 owns a modern activity tracker. More than half of U.S. consumers who have owned a modern activity tracker no longer use it. A third of U.S. consumers who have owned one stopped using the device within six months of receiving it.

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Digital Tipping Point: Cable companies have more Internet subscribers than TV subscribers

TVinternetBruce Leichtman, president and principal analyst for Leichtman Research Group, Inc.:”With the addition of more than 30 million broadband subscribers over the past decade, cable providers have clearly expanded well beyond their roots in cable TV service. As of the end of 2Q 2014, the top cable providers now have more broadband subscribers than cable TV subscribers.”

Peter Kafka, Re/code:”The top cable guys now have 49,915,000 Internet subscribers, compared to 49,910,000 TV subscribers. And to be sure, most cable customers are getting both services. Still, this is directionally important. The future for the pay TV guys isn’t selling you pay TV — it’s selling you access to data pipes, and pay TV will be one of the things you use those pipes for.”

Marcus Wholsen, Wired: “What this means for the future of TV is still tough to predict. While these figures may suggest the inevitable transition to an internet-dominated future, nearly 50 million cable subscribers don’t appear ready to cut the cord just yet. Even with a plethora of on-demand options, people are still watching TV like they used to, which means a business model still based around ads and subscription fees. But that’s still a loss of millions of cable subscribers over the past half-decade, while the number of broadband subscribers has climbed at a much faster clip.

Meanwhile, traditional TV as a format already is being engulfed by the open-endedness of the internet. From mainstream streaming services like Netflix, Hulu, and Amazon Instant Video to niche sites like Funny or Die to YouTube celebrities—to name just some of the options that fall under entertainment—the kinds of moving pictures available and the ways to consume them have never been greater. Within this broader spectrum, cable as a concept could become just another niche, one channel among many as the insatiable internet swallows everything it encounters.”

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Gartner Hype Cycle for Emerging Technologies 2014





Source: Gartner

Note that the Internet of Things has replaced big data at the top of the “peak of inflated expectations” (see Gartner’s 2013 Hype Cycle). Both will take another 5 to 10 years to reach the “plateau of productivity” in Gartner’s estimation. Data Science is a new category for Gartner’s Hype Cycle this year–IMHO, it’s more a new discipline than an “emerging technology”–and it’s interesting to see that Gartner gives it a shorter time-to-maturity (2 to 5 years) than big data. This rapid ascendance is helped by the numerous undergraduate and graduate programs answering the demand for data scientists and the fact that it is evolving out of established practices and existing educational programs in business analytics, operations research, statistics, and computer science.

See also It’s Official: The Internet Of Things Takes Over Big Data As The Most Hyped Technology

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What Chief Data Officers Do (Infographic)



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Josh Wills on Machine Learning in a Business Setting

Academic machine learning is all about optimization. Machine learning in a business setting is all about understanding: “My focus is always on how do I understand what the system is doing, come up with new hypotheses about this very complex system, test them, and then use what I’ve learned from those tests to find new ways to improve the system.”

An overview of Cloudera’s current data science tools, including Oryx and Spark for building and serving machine learning models, Gertrude for multivariate testing, and Impala for ludicrously high-performance SQL queries against HDFS.

Josh Wills is Cloudera’s Senior Director of Data Science

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Jeanne Ross on Why You May Not Need Big Data (Video)

“I think you grow into Big Data”

Jeanne Ross, Director of MIT’s Sloan School Center for Information Systems Research, interviewed by Dave Vellante and Paul Gillin at the CDOIQ Symposium, July 23, 2104.

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What Happens on the Web in 60 Seconds (Infographic)


Source: Qmee

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