You may have recently heard the phrase “Internet of Things,” but you may not be entirely sure what it means. While a simple definition is elusive, it’s essentially utilizing the internet to connect standalone devices with sensors—such as those found in your smartphone—to one another in an effort to simplify daily life.
You may not realize it, but networked sensors are already in the mainstream. For example, your game console is capable of monitoring your heart rate, and smartphones can already stand in place of your wallet.
A Brief Example of the Internet of Things in Action
This past February, Google bought out Nest Labs, a company that made internet-connected thermostats, for $3.2 billion. Nest’s thermostat is “smart” in the sense that it can learn how long it takes to heat or cool your home, set itself to different temperatures based on specific measurements and can be controlled through a computer or smartphone. But why would Google buy this?
Google is known for many things, but behind its robust search engine and popular email service, it is perhaps best known for its advertising platform. Of Google’s $59.8 billion in revenue made in 2013, $50 billion came from its advertising segment. Google uses keywords and advertisements that measure click behavior and search patterns throughout its properties. According to an Ars Technica piece, Nest sensors have the potential to learn how badly you burn food while cooking, which might allow the company to target your internet surfing with cookbook ads. While Google hasn’t done this at present, its purchase of Nest has laid the groundwork. It’s as groundbreaking as it is Orwellian, and its capabilities have companies salivating over potential profits.
Widespread applications like Nest are still in their relative infancy, but Cisco Systems CEO John Chambers claims that the market could grow to a staggering $19 trillion. With a projection of that size, the question in your minds might be “How can my small business get a piece of that?”
The Internet of Things and Small Business
Because the Internet of Things’ reach begins and ends with the internet, the obvious beneficiaries are computer hardware manufacturers and software programmers. However, they’re not the only ones that’ll reap its benefits, as that reach will extend to the many industries and businesses they serve. These include but are not limited to:
- Manufacturing. Many manufacturing companies already incorporate some degree of biometric scanning in everything from employee time clocks to weight sensors. Networking these devices together will allow management even greater flexibility in how they conduct business.
- Healthcare. Medical equipment manufacturers and service providers will benefit immensely from the Internet of Things, as healthcare providers inside and outside of hospitals will use a variety of sensors to detect, diagnose and treat a multitude of maladies. Many big names are already behind mHealth, or “mobile health,” a new market that uses smartphone technology to aid healthy living.
- Retail. Every point of the retail process, from procurement to sale, will likely benefit from the increased spread of networked sensors. Walmart already manages its supply chain with RFID chips and networked readers. At the checkout counter, many consumers already use their smartphones as wallets by using NFC connectivity.
With respect to day-to-day small business usage, the most immediate impact the Internet of Things may have is with customer relationship management (CRM) suites. Sensors linking to connected devices will be able to measure everything from app usage to ambient environmental data, like temperature or phone vibration. As discussed earlier, that data has a vast wealth of uses, including improvements upon targeted internet advertising. It can even be used to provide insights that improve customer service or even how products are tailored to customers. Salesforce is preparing for it, with aspirations of a “100% click-through rate” based on its potential.
Shouldn’t I Be Concerned About Security?
Yes, you should. But the question isn’t whether or not you should be concerned with security; it’s to what extent you should be concerned with it.
As all of our devices become more and more connected, security is a legitimate concern regarding the Internet of Things. Just like the rest of the internet, devices will use the same technologies to connect to each other. But with recent compromises of security software like OpenSSL and TrueCrypt, it’s not hard to imagine someone hacking into a network and commandeering your coffee maker, much less your laptop. When these concerns move into the business realm, astute managers should be conscious of them.
AVG Technologies, specializing in antivirus software, recently commissioned Vanson Bourne to interview small businesses about their attitudes toward the Internet of Things. While over 80% believe that the Internet of Things will be relevant to their businesses to some extent, business owners expressed concern that the systems would cost too much (48% of respondents), wouldn’t be sufficiently secure (51%) or would be susceptible to government monitoring (27%).
But despite this doubt, business will continue to progress, and it will undoubtedly benefit from the Internet of Things. According to the same study, owners believe that the Internet of Things will broaden and expedite access to their data, which will benefit their businesses by increasing production. Additionally, 56% believe it will increase customer satisfaction, and 51% believe it will contribute to profitability.
Should My Business Adopt the Internet of Things Today?
Since the Internet of Things is a fairly new phenomenon and relies on a network of devices to work, finding an off-the-shelf configuration is currently impossible. Small business owners will have to look at existing services that rely on networked sensors and decide if their type of business can benefit from those services. Today, for businesses like smaller retail shops, the benefits of the Internet of Things might take a few years to bear fruit.
Other types of businesses might be able to take advantage of current implementations. Companies like Gemalto offer an array of options to embed software in things like payment cards, employee IDs and more. A business hoping to track the hours of employees could likely benefit from an extra sensor here and there. Xively is another innovative service that offers the use of custom apps and APIs to connect your objects to a management console. Such services are cutting-edge and will likely carry a hefty price tag for today’s customers.
With that in mind, we recommended that small business owners become familiar with the concept, tools and systems used for taking advantage of the Internet of Things. Think about how connected objects with sensors might help your business. For example, if you run a restaurant, you might think about how using networked thermometers might be useful in complying with temperature restrictions on fresh foods.
The Internet of Things might be in its infancy, but it will likely pervade at least some part of your business, and possibly sooner than you think. That makes it important enough to consider the direction it might take in helping your business.