What is the Internet of Things and How Can It Grow My Business?
The term Internet of Things might sound disconcertingly vague, but it refers to something very specific: technological devices connected via the internet.
Similar to other technological buzzwords such as 3D printing and electric cars, the technology behind the Internet of Things (IoT) has been in existence for decades but it is only in recent years the term has gained credence.
There is some dispute as to who was responsible for coining the Internet of Things expression, and two men lay claim to it.
Peter T. Lewis claims to have coined it in a speech given in 1985 at a Federal Communications Commission conference, whereas another story tells of Kevin Ashton inventing it in a presentation to Procter & Gamble execs in 1999.
Lewis reportedly stated in his speech that the Internet of Things is the "integration of people, processes and technology with connectable devices and sensors to enable remote monitoring, status, manipulation and evaluation of trends."
This is the same as today’s explanation of the Internet of Things. In its simplest terms IoT could be described as connecting physical objects to the internet through sensors in order to allow them to communicate with each other and harvest data.
One of the first instances of what we would now define as an IoT device can be traced back to 1989 when John Romkey unveiled an internet connected toaster at a conference.
Bernard Marr, founder and chief executive of the Advanced Performance Institute, says IoT will allow "every item we have [to] become a computer."
"It started off with smartphones, then moved on to smartwatches and smart TVs and got to a stage where we now have basically everything [connected] from thermostats to clothing to shoes and chairs in the office," says Marr.
Marr has identified six tech trends poised to disrupt small business, including Internet of Things. He believes IoT can help small businesses in three particular areas: the improving of decision making, providing a better understanding of customers, and improving operations through the reduction of operating costs.
The latter could include cutting energy bills through the use of smart thermostats such as Nest, while the first two are more strategic.
One such example Marr provides of a strategic use of IoT is a butcher shop that installed sensors on its shopping window and inside the shop allowing it to pick up the signals emitted by smartphones’ Bluetooth and Wi-Fi connections.
At the time the butcher was facing a number of challenges including a drop in footfall due to a local library closing down, and the opening of a supermarket that was undercutting its prices.
Through the introduction of the sensors the butcher was able to collect enough data to ascertain what marketing messages were attracting the most customers.
Another business that is experimenting with IoT to improve its business operations is the on-demand laundry service Laundrapp, which allows customers to arrange laundry collections and deliveries online.
Laundrapp has partnered with Amazon to develop functionality for its virtual assistant Alexa, which sits within the voice-controlled Amazon Echo internet-connected speaker.
"It is by far the easiest way to place an order," says Laundrapp co-founder and chief executive Edward Relf. "Our business is entirely about convenience and saving people time and the fact you can order a Laundrapp just by saying two or three sentences is easily the most convenient way to order."
Relf says he cannot divulge the amount of orders carried out through Alexa, but highlights how adopting a new technology can provide significant PR and marketing opportunities.
"If you don’t have a huge marketing budget then actually being the first to some of these platforms represents a fantastic cross-marketing opportunity," says Relf.
These can come in the form of appearing prominently on app stores, receiving media coverage for being at the cutting-edge of technology, and receiving promotion through partners’ such as Amazon’s marketing channels.
"I’m not a huge fan of jumping onto new technology for the sake of it," adds Relf. "There were a number of platforms where we made the decision not to take Laundrapp to those platforms just because they are still unproven and don’t have the user base."
Barriers of entries are falling down, meaning small businesses are able to prototype sophisticated electronics products.
While some companies are using the IoT to improve their services, others have seen the sector as an opportunity to disrupt existing marketplaces.
Sensible Object aims to be the "first global game company of the Internet of Things" and its first game, Beasts of Balance, combines physical and digital gameplay and has been described as "Jenga crossed with Skylanders."
The company has landed a place on the Internet of Things venture program of digital marketing giant R/GA, and the Beasts of Balance game raised £170,000 on Kickstarter last January. By the end of the year it had sold around 10,000 units, which founder Alex Fleetwood describes as "a pretty big success" considering the company is a startup entering the market.
Fleetwood believes voice-activated IoT devices such as Google Home and Amazon Echo will usher in a more "socially positive" era where people are not such slaves to their smartphones.
He adds barriers of entries are falling down with new technologies meaning small businesses are able to prototype sophisticated electronics products, which will introduce a "lot more creativity and differentiation."
It is not just entertainment products that are being made smart, but also everyday functional items.
Christian Lane, founder of Smarter, says his company’s first disruption came in the form of the connected iKettle in 2014, which became one of the highest selling products on Firebox in the first few months.
He says the Internet of Things sector is growing "a lot more than what the average person is probably aware of."
Projections for the growth of internet connected devices vary, but they all agree the numbers will increase significantly.
Gartner estimated there were 6.4bn connected things by the end of 2016, up 30% from the previous year, and the number will grow threefold to almost 21bn by 2020.
"It is a fascinating space and it is not going to slow down and it is clearly where the future is," concludes Relf.
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