Earthquake early detection sensors warning people immediately via mobile devices and public loud speakers. Monitoring of water level variations in rivers, dams and reservoirs and supervision of the quality of tap water in cities. Traffic intelligence optimizing driving routes by showing warning messages and diversions according to climate conditions and unexpected events (like accidents or traffic jams). Real-time item location for traceability purposes and storage conditions along the supply chain. Smart Homes with energy consumption monitoring, lightning switches, security alarms, controlling of thermostats, fridges, washing machines, coffee makers and toasters. Location-based payment processing in shops, public transports, and theme parks. Patient surveillance by controlling their conditions not only inside hospitals but also remotely, in elderly homes.

All of these examples are “Internet of Things” (IoT) scenarios. While in the past, Information Technology (IT) had been driven mainly by people, clients and servers, it is different today: a nearly unlimited number of “things” like smartphones, watches, televisions, fridges, cars, traffic signals, planes, robots, solar panels, cement, and so many more, are becoming connected to each other. Hereby, organizations face big opportunities when they consider expanding their offerings into this IoT space, because the business potential is enormous: The Analyst firm Gartner estimated that “IoT will support total services spending of $69.5 billion in 2015 and $263 billion by 2020.” If this calculation is only rudimentary correct, IoT needs to be seen as a technology revolution which makes the physical world become truly digital.

The addressees of IoT offerings are widely-ranged: organizations, government institutions and households will buy and use IoT solutions. Hereby, the opportunities are many: There are and will be many IoT devices in place, available in many locations and for different service sectors. A good illustration these days comes from Beecham Research, an IoT consulting company. Please take a look at the following graphic (and consider that the content can be read much better when opened in a separate window):


This gives you a quite good overview, proving that there are many potential IoT scenarios where organizations can evolve in, and this is valid for nearly any industry.

But, it also has to be mentioned that as of today, many organizations have not taken advantage of these opportunities so far: IoT has not yet made the final move into the mainstream, because many firms still do not see its benefit yet, or often even don’t know what can be done with IoT. To help organizations become fit to approaching IoT, this article will give insights into the overall IoT background by analysing the current and future IoT technologies, the IoT vendor landscape, and especially will explain how organizations from different industries can adopt and benefit directly from the IoT rally.

1. Business Scope of IoT
Since the Internet exists, it is common practice to connect things that started in the borders of classical client-server-frameworks and further evolved during important milestones like the mobile revolution, where the connectivity opportunities grew exponentially. Trying to describe this momentum, the MIT employee Kevin Ashton was the first person who used the term “Internet of Things” during the turn of the millennium. He saw already the potential of “how internet-connected devices will change our life“. Still, it took another period of years to win the justified recognition in the market, coming along with other similar market initiatives like “Industry 4.0” (with a focus more on smart factories), “Industrial Internet” (a mixture of IoT with other techs like big data and machine learning), or even “Internet of Everything” (while it is quite tough for their promoters to really argue how it is different from IoT).

Often besides IoT, “Machine to Machine” (M2M) is also making its way into the discussion, but M2M is different from IoT: M2M already came on market in the 1960s in the telecommunication industry. The biggest differences are that “machines” in M2M environments are basically made of the same type, they run permanently and they also require much more energy than today’s IoT devices – which can, e.g., be sensors with resource limits on power and memory. Even though “the Internet of Things rally comes together with the connection of sensors and machines“.

Leaving M2M and the other terms behind for now, the market as of today zeroes in on the IoT framework where the biggest potential is seen by “networks of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment.” Hereby, the amount of physical objects (“things”) being connected to each other is one of the major IoT’s success criteria. Put simply, the more things can be connected bringing value, the more solutions can be built – and sold. The Analyst firm Gartner even says that “4.9 billion connected things are being connected in 2015” and already “26 billion installed units until 2020” will exist, while other sources like  Morgan Stanley forecasts that “75 billion devices will be connected to the Internet of Things by 2020“. In between, we have the NCTA who defined an average amount of around 50 billion things for 2020: You can see in the following graph which devices they incorporated to come to this result: Blog IoT explosion of connected things

It is natural that different firms come to different results, but they all have in common that the future connected possibilities are enormously high. With such kind of growth potential, IoT currently belongs to the ‘number one’ within the most important emerging IT technologies, and is even more hyped than, e.g., 3D Printing, Biochips or Big Data. This is proven by, for instance, the “Gartner’s Hype Cycle for Emerging Technologies“:


While new innovations like Quantum Computing, Data Science, and Autonomous Vehicles are not yet accurately developed – and on the other hand, In-Memory DBMS and Analytics, Hybrid Cloud, and even Augmented Reality are or have already turned into productivity – the IoT is on its peak! To argument why this is, it may help to understand the current digital business like a roadmap, taking use of Gartner’s approach to classify six business era models, which has six stages: Analog, Web, E-Business, Digital Marketing, Digital Business and Autonomous. Hereby, IoT is a component of the fifth stage (Digital Business), being a connector between the physical and the virtual world – meaning that physical assets become digitalized and can be used within data processing processes for final utilization in systems and apps.

2. IoT Technology
Before we dive deeper into the technical part, let’s start with a “simple” example: the Apple iPhone. This smartphone is purely an IoT device, and you will see why when taking a look at the following picture:


In addition to the simple fact that an iPhone is usually connected as a “thing” to the Internet, it especially uses a variety of sensors, which is an important and typical IoT characteristic. The picture above shows nine sensors (like accelerometer or magnetometer), but the iPhone is even equipped with more, e.g., the fingerprint identity sensor which is missing here. This also explains well why IoT can become a reality in our societies: The reduction of costs of IoT-specific hardware components like sensors is one of the major reasons for that. E.g., for an iPhone, “fifteen years ago the inclusion of one of these sensors would raise the cost of a product beyond the means of the average consumer. Today, the cost of all these sensors adds up under $5.00, with the cheapest sensors costing as little as $0.07“. This example is (besides others like an increase of network bandwidth or a higher acceptance of cloud solutions) the reason for the success of IoT technology acceptance.

Besides the catchy iPhone example, you are probably already using a lot of other IoT devices in your life, maybe without even knowing it. But now when it comes to describing all of the current and potential IoT technologies that exist globally under one consistent IoT frame, this is much more challenging.

It starts by realizing that even in current days, IoT market players still have not reached a commitment on an aligned global IoT standard. Everyone tries hard to define the right go-to market in IoT – and they make big steps forward – but this is often driven exclusively within company borders, for instance, for the important IoT platforms. One example, besides other top players in IoT market, is IBM who created an IoT model that looks like this:

IBM Model for the IoT

Besides this nice illustration, IBM promotes its own IoT solutions like their database IBM Informix to connect to other devices and get use out of them in their own IBM environment. Another strategy, this time from Samsung, is to open their own IoT ecosystems also to other organizations by demanding in parallel a leadership role which might make them first think about the power balance before joining such initiatives. However, as long as there is no global standard put in place for IoT cross-company, it will continuously be difficult for organizations to collaborate with each other, especially when it comes to serving the same clients like is necessary for many IoT projects, e.g., for smart cities.

Open Source companies hereby are more open by nature. There is, e.g., libelium, an IoT platform provider trying to cluster potential IoT solutions into meaningful categories and describing use cases for Smart Cities, Smart Water, Security and Emergencies, Smart Animal Farming, and more. They also invite third parties to link and add further IoT solutions and use cases to aforementioned clusters. But in all, even though there are a lot of such kind of initiatives globally, none of them have came out on top yet.

When evaluating newest IoT technologies, a lot of information can be also found by studying Analyst’s findings who researched a lot in the IoT sector. Those key findings are published in reports like Gartner’s “Hype Cycle for the Internet of Things, 2015” introducing IoT scenarios and solutions before and after their hype, or also in guides like from Forrester for CxOs, e.g., how to “Drive IoT Strategies forward with effective Data Protection Practices“. However, they also prove that IoT is continuously on a journey, therefore, IoT frames will continue  changing strongly over the next years.

Therefore, one of the best ways to start describing IoT technology is probably to break down today’s IoT solutions into their technical ingredients like Postcape, a social platform for IoT topics, has done: They defined that the following components are the necessary technical building blocks of any IoT solution:

  1. Communication: IoT can include and use a variety of communication standards like WiFi, Bluetooth, GSM/GPRS/xG (e.g., 5G/LTE), xAN (e.g., PAN, LAN, MAN, WAN), RFID, EnOcean, NFC, and more.
  2. Backbone: The typical IoT architecture takes use of key components which are the Internet Protocol (IPv4, IPv6), the User Datagram Protocol (UDP), the Transmission Control Protocol (TCP), and more.
  3. Hardware: So far, this article already started to show the importance of devices and sensors when it comes to IoT Hardware. And you can see that more and more, IoT hardware is sold in markets like “Wireless Systems on Chips (SoC)” which are module solutions often with TCP, UDP and IP integrated in their chips, as well as prototyping boards and platforms like the Arduino or Raspberry Pi. With such kind of boards, it is possible for not only organizations but also talented individuals to define their own IoT solutions.
  4. Software: IoT software can be categorized into embedded operating systems (like TinyOS or LiteOS), open source software (like RIOT or Thinksquare Mist), partner ecosystems (like Carriots or, Middleware for IoT applications, and more.
  5. Protocols: Besides the protocols listed in the previous “Backbone” chapter, there are more options like the “Constrained Application Protocol” (CoAP) to be used in very simple electronics devices to communicate interactively over the Internet, the “Message Queue Telemetry Transport” (MQTT) which is a protocol for M2M communication, or also “The Extensible Messaging and Presence Protocol” (XMPP) which enables real-time communication like instant messaging.
  6. Data Brokers and Cloud Platforms: IoT platforms are very important as a connector between the connected devices and infrastructure as well as with enterprise systems and applications. Many companies establish their own IoT platforms to streamline the communication between IoT devices or to host the data in the cloud. Typical bigger companies are, besides others, IBM (see above), SAP and Oracle, but there are a lot of more providers including many interesting IoT newcomers.

These seem to be today’s key technologies being used as a basis when thinking about what is possible when building the IoT solutions of today, defining new scenarios for clients, and thinking about a future consistent IoT framework. Currently, the most popular interests in society are hereby targeting Smart Homes (#1), Wearables (#2) and Smart Cities (#3), followed by other IoT applications as follows:


By the way, the examples within the bars are just selective, not representative. Besides the highest ranks showing the strongest interest by the public, there is also a lot of potential for those IoT applications with the obvious lower rankings (like Industrial Internet, Connected Car, Connected Health or Smart Supply Chain), as Business and IT Executives states: There are particularly high expectations for those IoT sectors to be at the forefront of future IoT investments.

And it has already begun: Organizations are now fastening to invest massively into new IoT applications. One of the KPIs proving this increase is the quantity of patents being granted: Forbes said that in the global market, “the IoT patenting activity is exploding. The average number of IoT patents published annually rose by more than 40% (…) compared to an average 6% annual increase in patents for all other Technologies.” And the same approach can be also used to measure IoT innovation within company borders.

3. IoT Provider in the Markets
In the previous chapters, a few IoT providers have already been mentioned. To make long things short, let us put them all on the table now, starting first with the biggest IoT giants in the global markets. The following ranking was made by IoT Analytics which is a company of IoT experts that publishes such lists of precedence on a quarterly basis:


The current “number one” leading the IoT vendors is IBM and one of the reasons why is because they did a massive investment of about 3 BnUS$ into IoT solution building. A total of 1,400 IoT staff members are building them based on their initiatives, e.g., for Smarter Planet and Smarter CitiesGoogle at second place is continuously rising in IoT space as well. E.g., they go-to market with “Brillo” (which is an IoT operating system) in the third quarter of 2015, as well as with “Weave“(which is their cross-platform to connect the Brillo devices with the internet). And Google does a lot of more – one catchy further example is that they use sensors in their Google Street View Cars to measure air pollution. At third place is Intel, pushing also strongly into the IoT market by, e.g., promoting the Intel IoT Ecosystem to attract other firms to build their end-to-end IoT solutions by using Intel’s product and technology portfolio. Now to Microsoft at rank four – they launched “Windows 10 IoT Core” which is a slimmed-down version of Windows 10, designed to operate on smart devices. Their plan is to get more than 1 billion devices using this Windows IoT version within the next few years.

To check the other unmentioned IoT providers, you may take a look at the IoT Analytics website or alternatively at this Forrester Report by Frank E. Gillet, which also adds a lot of details on the core IoT offerings from those software giants. But one worthwhile thing to mention is that although most of these top 10 IoT giants are US-based companies, there are two exceptions: SAP from Germany, and Samsung from South Korea. SAP hereby not only enhances their existing ERP solution with IoT functionality (e.g., taking use of sensors in warehouse processes); their current main target is to promote a new SAP HANA Cloud Platform for IoT Solutions to offer a central IoT hub for firms. Samsung on the other hand also tries hard to enter the IoT market aggressively: CEO BK Yoon said that “all Samsung products will be IoT ready in five years“.

Besides the giants, IoT is also a very attractive innovation target for start-up companies: They now have opportunities to act as content providers to permit process automation for business and consumers; they can also collaborate with the big vendors by developing their own IoT solutions on those platforms. There are many other examples, e.g., more than 2,000 new company foundations focus mainly on building such IoT applications on SAP’s HANA platform. And while the aforementioned Forrester report targets mainly the IoT giants, Gartner also researched these kind of interesting smaller IoT companies which they publish in reports like “Cool Vendors in the IoT, 2015“. Gartner states that much of the innovation in the IoT space is being fuelled by young, dynamic companies, and the “maker generation”. They don’t necessarily have to join ecosystems of IoT giants, but can also already compete with them by bringing in their own IoT products to clients. And such kind of young innovative IoT companies do not inevitably come from Silicon Valley, but from around the world.

In total, the market for IoT vendors has become extremely large already, but it is also in motion and will further change a lot during the next months.

4. How organizations should approach IoT
As of today, organizations are gradually starting to approach the IoT market. Forrester did a survey under business leaders to prove this, and published their findings as follows:


Many organizations climbed up the IoT ladder already in 2014, but they will speed up much more in this year 2015 – and beyond. This requires a close partnership between IT and the business, and organizations hereby exhibit a different level of IoT maturity in doing so. Importantly, the IoT adoption already happens across any industry.

It is fact that there is definitely still a lot of chances for organizations to join the IoT rally and improve their current go-to market. To adopt IoT and to use it as business enabler, organizations might take a look at the following emphases on how IoT can be used, and find the best way to start or optimize:

  1. Organizations can adopt IoT to make smarter products: The current organization’s products can be improved by adding IoT functionalities. An example is again the mobile phone: while in the past you could only make phone calls, you can now do lot of more things with it. Adapting IoT to the organization’s products improves the business’s ability to build smarter and more connected offerings to differentiate against competitors and to give more value to clients. Besides a better go-to market, there are also further reasons why an organization’s products might need to get IoT-ready: McKinsey says that, e.g., semiconductors need to change their products to get them more adapted to IoT power consumption requirements.
  2. Organizations can adjust the overall business model by taking use of IoT: Besides just optimizing an organization’s products, even completely new offerings might be added and integrated in an organization’s portfolio to enhance the go-to market. Take the Automotive industry as an example: the cash cow of OEM is selling cars, but now with the coming of era of smart cars, not only self-developed IT can be part of the company’s offerings, but also related offerings applicable for smart roads and smart infrastructure might be added to the portfolio. There is a big opportunity for many organizations to consider such kind of implications. To gain a stronger understanding of the business potentials of IoT, organizations either can establish or extend the R&D function in their company, or they can also start checking external knowledge bases like the “IEEE Internet of Things Initiative” which launch contributor programs to explore IoT scenarios. If enough budget is available, also optimizing their own M&A strategy might be an idea to buy fitting IoT firms. For example, Google acquired the company Nest to catalyse the development of their IoT platform and applications.
  3. Organizations can adopt IoT to enable smarter business operations and smarter decisions: Independently from the idea of enhancing the go-to market with IoT-ready products, there are also many opportunities to focus on the optimization of a company’s processes by IoT. For example, taking a look at sensors, they can be attached to everything, e.g., object, distance and presence detection like in a manufacturing process to record and send data back to the cloud where such data can be used for big data analysis like real-time tracking or the investigation of malfunctions. Besides the manufacturing industry example, any industry has fields of improvement by adapting IoT solutions. With this, it saves power, time and money.

The business opportunities for organizations by approaching IoT are a lot, and the suggestions above can be seen only as a start for many more future opportunities, which will even grow by benchmarking other market players and affecting automatisms like swarm intelligence. On the other hand, there are also barriers preventing a fast IoT adoption which need to be recognized and solved. As follows, you can read an extract on the major ones:

  • Privacy, Cybersecurity and Liability challenges: There are still questions about security and privacy remaining substantial barriers. For example anaesthetic machines are high potentials to become IoT devices, but experiences show that they can be hacked. Once many things are connected, the risk for hacks automatically increases. Executives therefore also have to consider making decisions regarding the future of security in their enterprise to protect business services in IoT.
  • Different Standards: This has already been mentioned above: different standards in communication protocols, messaging formats, data models, and more IoT areas, implicate the risk of many companies going-to market separately, which means they delay the establishment of global IoT frameworks and this can make especially potential larger clients wait longer to reach out to IoT.
  • Availability of IoT Hardware: Depending on a company’s IoT offerings, there can be plenty of IoT sensors and devices needed, but the purchasing of them to a certain extent might be not always easy.
  • Availability of IoT Software: The right IoT software is needed to manage the processes and, e.g., to analyse and transform a mass of sensor data via big data applications. This software probably needs to be also integrated with other existing software. Hereby, it can be difficult for organizations to identify, develop, or install the right standard software packages for such kind of IoT environments.
  • Availability of necessary skills: As IoT is a quite new field, there might be a lack of necessary skills in an organization which will make the adoption take longer.

These barriers need to be fairly considered before, during, and after approaching and adopting IoT environments within an organization and for clients. But it is natural to have new risks in new journeys, and the risks should not prevent a focus on the much more positive changes which will come when organizations open themselves to IoT internally and externally.

5. Conclusion
IoT offers great business opportunities for organizations and will have major positive impacts on the business today and especially in the future! Even though connected things have always existed in IT, especially today’s new hardware (e.g., sensors), lower costs and higher bandwidth will radically change the way IoT scenarios are being made to generate extraordinary value for organizations and their clients. Industries that can expect the biggest impact from IoT include IT and Networks, Public and Safety, Retail, Consumer and Buildings, Healthcare and Life Science, Industrial and Manufacturing, and last but not least, the Energy sector.

However as of today, the maturity level of having IoT adapted in organizations is still at an early stage, both for internal as well as external use (e.g., optimizing the company’s processes with sensors, or the extension of the business model with IoT offerings). This is because of a too limited understanding of IoT business opportunities as well as a missing clear IoT strategy from many organization leaders. It is important to overcome these barriers which also includes defining global IoT standards as well as addressing security challenges to be solved. Then, IoT will make its way faster into the mainstream. When intelligent things are made, it is like an automatism for creating new products and services. The initial investments may be higher, but they will save money in long-term, and IoT will benefit organizations and clients, and – finally – society.