The Internet of Things: Ridiculously overhyped? Maybe, but we don’t think so.

Fifty billion devices connected in 2020, 80 billion…those are just two of the many forecasts for how many devices (things) will be connected to the internet by 2020. Seven trillion (yes with a “T”) dollars is the most common economic forecast, but we have seen numbers ranging north of $19 trillion. Can any of this be real? Is it just Cisco and GE trying to stoke the fires of a market in which they will be significant beneficiaries? We can say with confidence that we have no idea what the real numbers will be. That said, we do believe that this is the next era of the internet revolution and will be equally as impactful as the market shifts that occurred with the emergence of the “widespread” internet in the late 1990s and the advent of mobile handheld technologies that have marked the last decade.

Why now? Many are pointing to the new Internet Protocol IPv6. Clearly that is a catalyst as well as the major network providers, adding simplicity and cost reduction through the Fog and Swarm layers that are becoming keys to ease of use and proliferation. Chips and sensors, as Moore’s law would suggest, are becoming much more cost effective. Finally, consumers and businesses see the benefits and convenience that this revolution will bring, in addition to large sums of incremental revenues. The stage is set for this next wave.

While much of the early data is focused on the Wired Home and more consumer centric data points and uses, we at Clearsight are focused on how this next technological growth revolution is going to effect the business user end market. The number of internet connected cars, for example,  is supposed to grow from 23 million today to over 150 million in 2020. What we want to better understand is what data and information will yield to businesses and how that will transform products, services and solutions to create a new paradigm. You can certainly imagine how automotive focused businesses, a service and repair facility, can leverage that data to offer a consumer a discount coupon for an oil change when they see the vehicles data. What we ask is how can a non-automotive focused business, say a bank, utilize that data to better understand where to put their next branch location. Or, taken a step further, how can a logistics business better monitor their fleet and create more cost effective routing and/or driver utilization? The possibilities are truly endless and that is but one small example.

We are enthusiastic about how this IoT (we are trying to be cool using the new vernacular) will transform the market. Creating new opportunities for our clients – delivering new products, leveraging the data, consulting services – that have yet to be dreamt of. We believe we will see a substantial flow of capital to support businesses and business models that will capitalize on the IoT. The investment phase, which we expect to be at its height over the next three years, will ultimately yield to an active consolidation/M&A phase where more established companies will need to add technology, analytics and services to better serve their client base in this next monumental growth wave that is on the horizon.

We are looking into the future with great anticipation and will keep you posted on the relevant trends as we see them develop.