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IoT: The Present and the Future


The Internet of Things (IoT) is one of the world’s fastest-growing technology segments. Over the next ten years, the IoT will become a pervasive presence. It has the potential to make a substantial impact on every aspect of our lives, whether it’s in the home, our place of business, in airports and other transportation hubs, in hospitals, or in the cities and towns where we live.

Because of the implications of this technology – not just in everyone’s lives, but also specifically in the data center space – we felt the need to catalog the current state of all things IoT, as well as where we see the future for a connected world.

The Current State of IoT

Here are some of the key points you’ll find regarding the current state of IoT:

  • According to a frequently cited forecast by Gartner, Inc., there will be 20 billion IoT devices in operation by the end of 2020, up from 6.4 billion in 2016. Within the next decade, says Statistica, that number is projected to rise to 50 billion.
  • Currently, in consumer vs. business IoT, the consumer sector is the larger of the two. In 2016, there were about 4 billion consumer-directed IoT devices (or 63%), and about 2.4 billion business-directed IoT devices (or 37%). Future growth in consumer vs. business IoT is expected to follow this percentage split. Out of the predicted 20 billion IoT devices in operation by the end of 2020 (that’s barely a year away), about 12.9 billion will be consumer-related.
  • In 2016, spending on IoT devices amounted to $1.38 trillion, with approximately $0.53 trillion spent on consumer-directed devices, and about $0.85 trillion spent on business-directed devices. In 2020, however, an estimated $2.93 trillion will be spent on IoT devices, with consumer and business spending being about equal (approximately $1.43 trillion for each side).
  • On the business side, a 2018 Vanson Bourne survey looked at 800 worldwide organizations with global annual revenues of $500M+. One in four of these companies ranked IoT development as their most important initiative.

Industrial Applications of IoT

Curious about the growth potential for industrial applications of IoT? Here are a few industries to watch:

  • Agriculture – Although still in the early stages, IIoT technology is being developed for use in large-scale crop production and livestock enterprises. Applications in development include everything from sensors designed to measure fertilizer, moisture, and temperature levels (known as precision farming) to AI-driven robots that will assist in planting, irrigation, and crop harvesting.
  • Energy – All sectors of the energy industry (oil & gas, nuclear, solar, hydroelectric, wind) are integrating IIoT technologies. Energy distributors (e.g. power companies) seem to be leading the way in terms of adopting smart metering sensors to measure distribution levels. But energy explorers (e.g. oil drillers, solar operators) are lagging behind in integrating IIoT for exploration, extraction & drilling, real-time process monitoring, predictive maintenance, automation, and tracking of energy production yields.
  • Manufacturing – Companies in numerous manufacturing sectors are investing in the development of “Smart Factories,” where AI-powered robots and devices automate multiple tasks, and IoT sensors measure everything from product yields to inventory levels. (At this time, Schneider Electric has just opened America’s first “Smart Factory” in Lexington, Kentucky, manufacturing electrical load centers and safety switches.)
  • Maritime – Shipping and fishing companies are adopting IIoT solutions, mostly in an effort to keep up with international regulations. For example, many shipping companies are now using IIoT sensors paired with satellite networks to monitor fuel consumption and emissions for cargo ships. Fishing companies are using IIoT technology to document and certify that their catches are coming from sustainable sources.
  • Mining – Compared to other industries, the mining industry has been relatively slow to integrate IIoT solutions, but is now looking for ways to utilize IIoT devices to increase automation of mining activities, improve health and safety for workers, and improve environmental sustainability. One example: Some mining companies are requiring workers to wear connected safety devices that can warn them of unsafe mine conditions, such as the presence of dangerous gases.

IoT Problems

Of course, we cannot talk about IoT without addressing some of the nagging problems that plague the sector. Some of the hurdles that will need to be overcome for IoT to thrive are:

  • Network Latency – Latency is the slow delivery of applications and data over a network. It is caused by several factors, including the distance that data transmissions must travel between servers and connected devices, the number of network hops involved, and the density of network traffic. Occasionally, latency can result in data loss during transference. Many IoT devices will require real-time application processing and fail-safe transfer of data. For example, self-driving cars will require split-second timing and data transfer to communicate with smart traffic signals, and to avoid collisions with other vehicles and pedestrians. Network latency between IoT devices must be overcome if self-driving vehicles are ever going to operate correctly, to the point where they be accepted as safe by the general public.
  • Security – A major concern is how to keep IoT devices secure when they are connected to the open Internet. Cybercriminals have already figured out how to use IoT devices to launch Distributed Denial of Service (DDoS) attacks (e.g. the 2016 Mirai malware attack, which brought down the servers of Twitter, Netflix, and PayPal). It should be noted that the lack of security in IoT is more of a cultural problem. Many companies are so focused on perfecting their IoT technologies and bringing them to market that installing security features is often an afterthought. In the future, companies in the IoT business ecosystem will need to increase their focus on security, to protect IoT devices, systems, and users from outside cyberattacks.
  • Privacy – A significant problem for IoT is who gets access to what data, and how will they be allowed to use it? This question is especially important due to the many connected devices now being adopted by consumers, which have the ability to collect user data and send it back to their home company. Also, commercial and industrial users of IoT technology will need to consider what data they will collect, and what regulations they need to follow (e.g. GDPR) to protect customer privacy and avoid legal and regulatory challenges.
  • Technology StandardsAt this time, there is a lack of standards for IoT devices and technology ecosystems. Many IoT systems use a complex mix of protocols and technologies. There is also a lack of business processes for IoT devices and limited best practices for IoT developers.

What role will edge data centers play in the future of IoT?

Edge computing offers several advantages for IoT:

  • By deploying computing resources in close proximity to IoT devices, edge computing cuts the distance that data transmissions have to travel over networks. This reduces latency and enables real-time application processing, which is especially important for IoT devices such as self-driving cars.
  • Edge computing improves the performance and reliability of IoT applications, through localized computing, data storage, and data analytics.
  • Edge computing reduces the cost of data transmission and the risk of data loss by reducing the number of network hops that IoT applications and data must make between servers and devices.

Examples of how edge data centers may be used in conjunction with IoT include locating them:

  • Outside manufacturing plants to house the servers that operate robotic machines and collect data from sensors in the facility.
  • Throughout large-scale industrial farms to support AI-driven farming robots and collect crop and weather data from local sensors.
  • In urban areas to operate smart traffic lights and streetlights, while transmitting traffic data and commands to self-driving vehicles.

For a more detailed look into the current and future state of IoT, download the full whitepaper (pdf).

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