Impact of Internet-of-Things on Small Businesses

IoT is a combination of sensors, networking equipment, and analytics which are combined to create greater production efficiency, better quality of life, and a higher level of automation in devices and systems. Most of these devices operate without human interaction, for example, automatically gathering data from sensors and reporting it to the operator, business owner or manufacturer. 

Vernon Turner, an analyst at IDC, predicts that the worldwide market for IoT is expected to grow from $655.8 billion in 2014 to $1.7 trillion in 2020. "Wearable devices are the consumer face of the Internet of Things, and where recognition of IoT appears to begin," said Turner.

With companies like GE, Samsung and LG looking to enter the home automation market, this will have huge implications on small-to-medium-sized businesses around the world. But small businesses should give heed to the fact that blue chip companies are getting ready to adopt IoT in a huge way. A major zone of impact is at a personal level. Fitness bands which communicate with smartphones and cloud providers provide information about the user and his activities. Nest thermostats allow smartphones to activate the air conditioning at home just before arriving, in order to avoid the discomfort of a hot atmosphere. Corporations are investing billions of dollars in order to fit their equipment with sensors and supporting systems which can analyze gathered information & immediately gain insight about user trends. This results in more efficient operation, lower fuel consumption, and more responsiveness to changes by the user or system.

Unless small businesses stay informed and find out a method to use this knowledge to their advantage, they might get bogged down by the bigger giants in the playing field. Small businesses might be able to piggyback onto the IoT systems of larger firms. Just as car dealerships and service repair firms compete with companies like Honda, there is a wide array of abundant opportunities for small business to assist the market by using the efforts of others.

The secret sauce for success in the future of IoT is to keep things practical, and at a level playing-field. In the end, major capital budgets need to be allocated for sensors and software, not to mention the processing and storing of data. It is vitally important to figure out how to justify those expenses by adding real value that people will be willing to buy.

"Cloud computing incited huge changes in IT markets and among traditional system vendors, but IoT promises even greater evolution and disruption," said Charles King, principal analyst at Pund-IT. "If IoT market projections are anywhere near accurate, it will be a massive commercial opportunity that could transform the ways that businesses use and benefit from technology."

About 1.5 billion internet-enabled devices are sold each year, which is a small fraction of all connected devices. Currently, another 200 billion devices or things could be connected to the Internet, of which 14 billion are already connected. By 2020, IDC estimates that will soar to 32 billion. IT firm Cisco put the number at greater than 50 billion in the future. This greatly helps offshore software development companies who provide businesses with solutions with regard to such devices.