What is the Internet of Things?

Curated from: mckinsey.com

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The Internet of Things (IoT)

The internet of things describes the objects and various technologies connecting the digital and physical worlds. For example, a fitness tracker to help you stay physically active or a house with a smart thermostat.

Physical objects have in them

sensors which can monitor things like temperature, motion or any change in the environment
actuators which receive signals from sensors and then act in response to those changes.

These actuators communicate via wired or wireless networks with computing systems that monitor or manage connected objects and machines.

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IoTs provide new opportunities

IoT's constant connectivity and data and analytics supply new opportunities for companies to innovate products and services.

Broadly, IoT applications occur in one of nine settings:

Human health. Devices are attached to or inserted inside the human body.
Home, including voice assistants, automated vacuums, or security systems.
Retail environments such as self-checkout, extending in-store offers, or optimizing inventory.
Offices, including energy management or building security.
Standardized production environments.
Custom production environments
Vehicles
Cities
Outdoor settings

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The economic impact of IoT

By 2030, the potential value of IoT could amount to up to $12.5 trillion globally. The potential economic value of IoT differs based on settings and usages. For example, factory settings and human health applications represent just over a quarter of the total value potential.

IoT's value can also be explored with use-case clusters. The most common use cases account for a large share of IoTs potential economic value:

Operations optimization (41%)
health (15%)
human productivity (15 %)
condition-based maintenance (12 %)

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IoT platforms

To get value from IoT, it is helpful to have a platform create and manage applications, run analytics and store and secure your data.

If you are trying to choose an IoT platform, you’ll need a good understanding of your company’s IoT strategy. When evaluating IoT platforms, consider these characteristics:

Applications environment. Can the platform maintain multiple applications?
Data management. Can the platform structure and join various unfamiliar data sets?
Ownership of cloud infrastructure.
Security.
Edge processing and control. Can the platform do edge analytics without human intervention?

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IoT security

The billions of IoT devices have created new company vulnerabilities, making cybersecurity crucial. It's vital to address customer privacy concerns and protect critical equipment.

How leaders can tackle IoT cybersecurity:

understand what IoT security will mean for your industry
set clear roles and responsibilities for IoT security
hold strategic conversations with regulators and collaborate with other industry players
view cybersecurity as a priority for the entire product life cycle
transform mindsets and skills
create a point-of-contact system for external security researchers

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Industrial Internet of Things (IIoT)

IIoT is among the advanced manufacturing technologies collectively referred to as Industry 4.0, or the Fourth Industrial Revolution.

IIoT can:

Drastically reduce downtime
Open up new business models
Improve customer experience
Make organizations more resilient

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The Internet of Things B2B uses

Internet of Things B2B solutions accounts for the majority of economic value up to now.

In B2B settings, combining IoT and AI can improve the predictive-maintenance capabilities of machines while empowering service providers to evaluate the health of their assets in real-time.

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