The Internet of Things — IoT, for short — is made up of devices that connect to the internet and share data with each other. IoT devices include not only computers, laptops and smartphones, but also objects that have been equipped with chips to gather and communicate data over a network.
The range of existing and potential Internet of Things devices is enormous. Consumers often use their smartphones to communicate with IoT devices, whether it’s a smart speaker or home thermostat. Connected devices offer convenience, like helping you make a grocery list, or savings, like when you turn down the heat at home while you’re on vacation.
Despite its rising importance in the tech market, the full potential of the Internet of Things has yet to be unleashed. In the next few years, we will see an explosion of IoT products and applications, not only for the retail market but also in the manufacturing, health, transport and security sectors.
The IoT’s expansion will give companies unheard-of opportunities to develop products for all markets. According to this Microsoft infographic featuring technologist Kevin Ashton, one of the biggest benefits of the IoT is improving processes.
“IoT will allow information systems to capture their own information by themselves, for themselves, in a wide array of connected sensors that will turn the world into data,” explains the infographic. Paired with advancements in machine learning, all the data from the IoT can help companies automate processes and tasks for people.
The digitization of machines, vehicles, and other elements of the physical world is a powerful idea. Even at this early stage, the IoT is starting to have a real impact by changing how goods are made and distributed, how products are serviced and refined, and how doctors and patients manage health and wellness. But capturing the full potential of IoT applications will require innovation in technologies and business models, as well as investment in new capabilities and talent. With policy actions to encourage interoperability, ensure security, and protect privacy and property rights, the Internet of Things can begin to reach its full potential—especially if leaders truly embrace data-driven decision making.