Internet of Things

IoT Challenges and Opportunities

The Internet of Things is poised to exponentially expand from the millions of devices and services available today to billions of components in the coming years. It is difficult to envisage all the ramifications that follow its full-on manifestation not unlike when the Internet took off in the 1980s.

Despite a lack of prediction precision, however, we know that IoT will induce tremendous impacts on standards, security, business models and individual lifestyles. The obstacles to its adoption are enormous, but so will be the opportunities that ensue.

Fundamental Drivers of IoT

IoT’s key technological enabler is the proliferation of rapidly shrinking, low-power sensors and embedded IP-addressable devices. These find their way into applications in manufacturing, the health care sector, consumer products and public infrastructure. Everyday things such as kitchen appliances, automobiles and parking meters – not previously considered “computers” – are now active IoT participants.

These devices generate, gather and act upon “micro-data” that in the aggregate will trivialize the scale of today’s Big Data streams. These data are in demand by increasingly sophisticated analytics services that improve IoT-enabled product performance. They also super-charge a blossoming analytics segment feeding automated enterprise decision-making systems.

Barriers to Adoption

Security and Privacy

The sheer scale of a full-blown IoT approaching a hundred billion devices has a potential to pose unimaginable problems, the first of which are likely to be around privacy and security. IoT offers an enormous attack surface for malware. It adds layers to the software/hardware stacks employed today, which also creates new security risks.

IoT’s data flood being shared across its infrastructure creates the certainty of privacy breaches. Even though single data burst may not contain personally identifiable information, those with criminal intent have an opportunity to create hundreds or thousands of associations that may yield something useful to them. Furthermore, all such data that is stored is subject to attack as well.

Lack of Widespread Standards

Clearly, IoT is well ahead of new standards that would mitigate its inherent complexity. Look forward to a mix of competing standards and proprietary solutions that create a heavy friction for device manufacturers, developers and testers, even though the success of IoT demands a high level of collaboration if it is to reach full promise.

Although in theory IoT presents a rich platform for experimentation, especially for aggregator services layered over it, a lot of junk apps and services will surely crop up. These will muddy value propositions and ROI evaluations for many businesses, especially startups that have worthwhile IoT concepts. At the least, this creates a perceptual drag on IoT.

Opportunities Abound

Despite the obstacles to IoT, it appears it will not fall off a cliff anytime soon. One estimate of its economic potential comes from the McKinsey Global Institute, which estimates it to generate value from $4 trillion to $11 trillion by 2025 in consumer and business applications. IoT participating technology companies producing hardware, software, services and integration are all likely beneficiaries.

Semiconductor Giants as Solution Providers

Already, semiconductor companies are seizing the IoT moment. At the core of every IoT device is silicon of course. However, the most nimble and forward-looking semiconductor companies realize that providing packaged solutions in the form of micro- or pico-sized IoT devices represent a new revenue stream. They will be able to skirt obstacles such as security by keeping these a closed system.

Wearable Health Care and Smart Homes

Already, a huge investment is being made in the healthcare sector in IoT-capable wearable health monitoring devices and supporting technology. Another growing sector is smart home monitors and security systems that rely on a multitude of sensors and actuators that send and receive data and commands remotely. These alone are projected to generate revenue of half a billion dollars in the next few years.

Unimagined Innovation

The application for IoT sensors seems only limited by human imagination. Farmers are already using them to monitor crops and livestock and automating adjustments in food, fertilizer and pesticides. Retailers are utilizing IoT devices to monitor inventory, learn more about their customers and provide them with personalized information and offers. Cities are using IoT to monitor traffic and pedestrian flows, which they optimize via traffic signals or lane sharing.


IoT is at the cusp of transforming our daily lives and society as a whole in ways that go beyond the onset of the Internet. Although IoT faces significant headwinds as it gains speed, especially in areas such as security, privacy and testability, these will be overcome eventually.

Major companies such as Google, Cisco, Microsoft, Intel and many others are already contributing to IoT’s growth, but that does not mean there is not plenty of room for as yet unheard of startups to profit from recognizing both the challenges and opportunities of this new technology wave.