Amid the meteoric expansion of connected devices and conversations around how 5G will transform connectivity, there is a question that business leaders must ask regularly: What does the Internet of Things (IoT) mean for me?
The answer will inform strategic decisions, but it is also the key to insights into the relationship between the IoT and society at large.
The COVID-19 pandemic has accelerated digitization in every industry. There has been tremendous growth in IoT applications—such as remote monitoring, digital health and connected smart devices—to support social distancing and other public health initiatives. Some of the effects of IoT in daily life predicted before 2020 look different now, and leaders have opportunities to explore where the intersection of society and connected technology is headed. But they need to understand a few truths about the future IoT and society first.
The IoT landscape
To understand how the IoT affects business and society, one must first understand how IoT works—and how it is changing.
Though the name "the Internet of Things" was coined in 1999 and the idea of machines communicating with one another has been around for much, much longer, the IoT as we know it—a network of physical objects embedded with sensors and software for exchanging data over the internet—did not really emerge until the early 2010s. As sensor-equipped devices became more common and their capabilities more advanced, the connective power of the IoT changed, too, first connecting people to devices and, ultimately, people to people.
With 5G poised to overhaul everyday life, the IoT is at a turning point. Because 5G is intended to be a widespread, high-bandwidth and ultra-low latency network, it can support a greater density of connected devices and ensure that they can communicate simultaneously with the network without disruption.
Consumerization will be a key driver
Even before the pandemic closed physical stores and sequestered people in their homes, the online consumer experience reshaped retail. With devices that can operate televisions and appliances by voice comes shifting shopping expectations. New applications of augmented and virtual reality will further remake the landscape.
Many industries have responded with novel solutions that give consumers more control over their retail, banking and healthcare experiences. The future will belong to organizations that can get ahead of these expectations and shape them on the front end.
But as reliance on connected devices grows, skepticism around privacy and security persists. As the effects of IoT in daily life proliferate through homes and offices, businesses must ensure that consumer trust is driving their technology decisions.
Challenges and opportunities for IoT and society
The road to proactive IoT engagement paved with good intentions but fraught with hurdles and possibilities.
Cyber security is still a pressing challenge. Threat actors continue to discover and attack unsecured endpoints and vulnerable networks. Government regulators are rushing to catch up, and that creates a tricky environment for innovative organizations to navigate. (See, for example, the Food and Drug Administration's evolving stance on cyber security for medical devices.)
As consumers push businesses to provide more devices and IoT-friendly services, business leaders must figure out how to guarantee connectivity for an increasingly dense network. Look at video streaming: Streaming service subscription numbers jumped 50% from the end of 2019 to the end of 2020, the Wall Street Journal reported. This surge in bandwidth-sucking applications stressed server-client models, pushing businesses to find new answers—and many turned to providers who can carry them into an IoT-enabled future.
Still, the possibilities seem endless. McKinsey highlights opportunities in business applications in customer-and device-facing functionality that add value through insights. It also highlights enablement platforms leveraged to collect, import and process data. Cloud computing and environmental sensors present growth opportunities, too.
Business leaders will find value by minding the risks inherent in any IoT venture. These largely fall under the security umbrella and include privacy concerns and device vulnerabilities at the manufacturer level, but they extend into the strategic space, too. There is a risk of analysis paralysis in choosing the right IoT business model (monetizing IoT data versus an outcome-based focus, for example) and a risk of ballooning, overaggressive roadmaps.
Preparing for the effects of IoT and society
Responding to the emerging future of the IoT and society will be a journey.
Organizations should be ready to take a data-forward approach, acknowledge practical concerns (such as storage needs and data management across the enterprise) and empower employees to effectively use the data IoT can provide.
Security will remain a central concern on the tech side. But so will investment in low-latency 5G networks to ensure that existing infrastructure remains viable. Forward-thinking leaders might have to look outside their organizations to get the most out of the IoT.
Many will find that outsourcing some of their needs will yield positive returns and give them access to talent and experience they have not been able to build internally. A strong managed services partner can help provide the insights and capabilities that can hone a competitive edge.
Learn more about how Verizon solutions can help businesses prepare for the future of the IoT.