Value of IoT

Any business that fails to invest heavily in the internet of things in the next 10 years is unlikely to be able to remain competitive. The value of the internet of things (IoT) may exceed the hype, according to research by the McKinsey Global Institute. They estimate that the total potential value of IoT will be between $3.9 trillion and $11.1 trillion a year by 2025.

The McKinsey research says that most of this value will come from operations and equipment optimization in factories, chore automation and security in the home, automation in the retail sector, and improvements in public health and transportation services. They believe that any business that fails to invest heavily in IoT in the next 10 years will be unlikely to remain competitive.

According to a McKinsey report, other key areas where IoT will drive value include autonomous vehicles and condition-based vehicle maintenance, security and energy improvements in offices, operations and safety optimization in work sites, human health and fitness, and logistics and navigation.

McKinsey expects twice as much value to come from business-to-business (B2B) applications than from business-to-consumer (B2C) applications, and expects advanced economies to get more value from IoT than developing economies.

These two markets will also benefit in different ways. For example, developed markets will benefit from improved health treatments through remote heart monitors, while developing markets will be able to leapfrog the development of medical centers through telemedicine services.

The main types of opportunities enabled by IoT are the transformation of business processes through things like predictive maintenance, better asset utilization and higher productivity, and enabling new business models such as services based on remote monitoring capabilities.

Note: This article is an edited version of a post by Warwick Ashford. To view his full post, click on this web page. To read the full 140 page McKinsey Global Institute’s report on, “The Internet of Things – Mapping the Value Beyond the Hype”, go to this web link.