Internet of Things: benefits, challenges, and use

You can face IoT wherever you go, from contextual advertising, which tells the user where to have lunch or refuel, depending on the current geolocation, to food delivery or car purchase. The Internet of things creates a new reality where everything is correlated for making our life more comfortable than ever.

What is it?

The IoT (Internet of things) is a huge network of connected things and people – all of which collect and share data about the way they are used. This system integrates devices into a computer network and allows them to collect, analyze, process, and transmit data to other objects through software, applications, or technical devices. IoT is inextricably related to Big Data.

How does it work?

IoT devices function independently, although people can configure them or provide access to data. IoT systems work in real-time and typically consist of a network of smart devices and a cloud platform to which they are connected via WiFi, Bluetooth, or other types of communication.

What happens if the temperature is too high or a burglar breaks into your house? The system notifies the user about this or performs further actions itself — for example, turns on the air conditioner or calls the police.

First, the devices collect data, for instance, about the temperature in the apartment or the user's heart rate, then this data is sent to the cloud, and is processed by software.

IoT structure

The Internet of Things is a complex system that consists of several core components.

In addition to Big Data, analytics, connections, devices, and experience are also important for the operation of the Internet of Things. To make it simpler, this principle is presented as ABCDE: Analytics, Big Data, Connectivity, Device, Experience.

Analytics

This is a key element in the functioning of IoT, which combines the devices themselves, data from them, and optimizes business processes. To operate, IoT analytics needs three key elements: storage, stream processing software, and an analytics engine.

BigData

This refers to information from devices stored in the cloud. It enables users to automate existing processes or build new ones. Big data analytics allows us to make sense of the data gathered through IoT devices. It provides different types of insights when used with the IoT; namely, descriptive analytics, diagnostic analytics, predictive analytics, and prescriptive analytics.

Connectivity

These are the channels through which devices receive and transmit information. The sensors/devices can be connected to the cloud in various ways. They include cellular, satellite, WiFi, Bluetooth, low-power wide-area networks, connecting through a gateway/router.

Devices/sensors

They are connected to the system, which, depending on the tasks, must have the appropriate message frequency in order to work properly. Multiple sensors can be bundled together constitute part of a device that does more than just sense things.

Experience

It means working with the existing experience of solving customer problems via IoT, its analytics and rethinking.

Statistics

The global IoT market size was valued at $300 billion in 2020. The market is projected to grow from $380 billion in 2021 to $1 trillion in 2028 at a CAGR of 25% in the 2021-2028 period. 

The amount of IoT-connected devices globally exceeded 11 billion in 2020. Notably, this is higher than the number of mobile devices in use in the world. With new technologies like 5G and an uptick in IoT adoption, companies’ intentions to invest in IoT solutions appear to grow.

The IoT market research demonstrates a slight dominance of hardware, which is expected to reach a market value of $580 billion. Services will account for 27% (XaaS 12% and IT and installation services 15%), Connectivity for 22%, and Software for 16%.

IoT advantages

Safety & Security

The use of IoT technologies minimizes emergencies and traumatic conditions, which is particularly important when using the system for industrial and commercial purposes. At the same time, production volumes can grow several times, because a lot of operations are automated.

Customer experience

The Internet of Things makes users`life much more convenient. It can make you coffee, monitor the road when driving a car, or clean your house. Data tracking also improves the quality of customers` lives, because they can be sure about the product quality. IoT helps businesses automotize their services which makes it more attractive for consumers.

What are the IoT benefits in daily life?

Many associate the Internet of Things with a smart home. Thanks to technology and devices developed by Google, Amazon, Apple, and others, users can make online purchases, adjust the room temperature, turn on the lights and music, giving voice commands to virtual assistants.

You no longer have to worry that you forgot to turn off the iron or faucet — just press the button in your smartphone and the smart home will fix everything. Sometimes, you don`t even have to click, as the house is so smart that it will put everything in order itself, and then notify you. The surveillance system taps computer vision to recognize anyone who passes by your apartment and compare the images with the police database.

Challenges when implementing IoT

Security and privacy issues

There is always a risk of data leakage as intelligent devices collect and transmit confidential information, the disclosure of which can lead to severe problems. Failure to provide sufficient protection can result in costly and critical consequences: loss of personal and corporate data, and, as a result, financial and reputational damage. Therefore, the development and implementation of IoT solutions should be carried out by qualified IT specialists who can ensure the installed hardware and software are reliable enough.

Lack of technical knowledge

IoT implementation requires responsible and experienced IT professionals who clearly understand the scope and possible consequences of their work. Deploying, configuring, maintaining, and scaling IoT solutions need highly-skilled administrators. All employees who will interact with the implemented network of smart devices must undergo proper training and receive the necessary instructions.

Internet and power connectivity dependence

Although the Internet of Things implies the autonomous operation of several devices, such a network is still highly dependent on external factors. The continuous operation of the entire IT infrastructure depends on a stable and sufficient power supply. In the case of smart devices, this dependence is further enhanced, so it is necessary to provide a well-planned additional infrastructure. It should include the required number of uninterruptible power supplies, surge protection devices and other equipment.

Time-consuming and expensive to implement

The implementation of IoT solutions means the construction of an extensive network consisting of multiple intelligent devices and the corresponding technical infrastructure. Hence, such a solution requires significant investments to maintain and gradually expand the established network in accordance with future business needs. Although IoT solutions provide many advantages, it takes a while before they become truly effective, and the profit from the introduction of new solutions may overweight the initial costs.

Where is IoT used?

The Internet of Things helps businesses automate and streamline their processes and reduce labor costs. This decreases the amount of waste, enhances the service quality provided, reduces the costs related to the production process and logistics.

According to the IoT Analytics study, in 2020, the highest level of IoT technology penetration was observed in transport, energy, retail, city life management, healthcare, and manufacturing.

Agriculture

Smart farms and greenhouses dose fertilizers and water themselves, and smart animal trackers instantly notify farmers not only about where animals are but also about their health status, analyzing heartbeat, body temperature, and general activity.

Electric power industry

The examples of IoT usage in this field are supervisory control and data acquisition and advanced metering infrastructure. The Internet of Things can enhance the controllability of substations and transmission lines by means of remote monitoring.

Logistics

Transport that is connected to the Internet and remote monitoring of the vehicle fleet helps to reduce costs by optimizing the repair and maintenance of equipment. IoT reduces freight costs and minimizes the impact of the human factor. IoT systems can also monitor the occupancy of garbage cans and optimize garbage collection costs based on the data derived.

Healthcare

IoT enables companies to shift to a new level of disease diagnosis. Smart devices monitor the patient's health indicators in the background. Besides, the devices are used for tracking the real-time location of medical equipment such as wheelchairs, defibrillators, nebulizers, oxygen pumps, and so on.

Transport

Typical IoT solutions include telematics and smart fleet management, in which the vehicle is connected to a local operating system for monitoring and diagnostics. According to Statista estimates, $740 billion will be invested in the development of IoT for cars by 2025.

Oil and gas industry/mining industry

IoT-based sensors can monitor inventory levels of onshore oil tanks and automatically send trucks when the tanks need to be emptied. They also monitor the performance of above-ground pumps to alert maintenance teams of potential and actual issues and provide employees with early warning signs of possible safety issues to help prevent injuries and fatalities. The use of in-depth analytics on drilling wells helps the oil and gas industry to boost production volumes at already spent fields.

Retail

IoT allows brands to optimize costs and improve customer experience through digital signage, customer interaction tracking, inventory management, and smart vending machines. The market is expected to grow from $14.5 billion in 2020 to $35.5 billion by 2025, as ResearchAndMarkets assumes.