The Internet of Things (IoT) is quickly becoming the newest buzzword in technology. With everything from health trackers to appliances embracing IoT, many of you might be thinking about investing in this emerging technology. But before you do, you should fully understand what IoT is and how this new concept is expected to grow over the next few years. Simply put, IoT is the connection of all things (such as cars, devices, and even appliances) which have never been connected before.
Here’s an example.
If you take an ordinary watch and connect it to the internet, you would have a “smartwatch.” Unlike a standard watch, this new smartwatch can track everything from your location, the number of steps you take in a day, and even notify you of incoming text messages and emails. By simply being connected to the internet, this new watch has an entirely new purpose. This is why IoT is so important – it takes a seemingly mundane device and makes it much more advanced and “in tune” with your daily life.
IoT is the next massive technology, but before you decide to invest in any IoT-based product or business, there are five things to keep in mind. Use the following checklist as a gauge to see if your investment in IoT is worthwhile or not.
- The first thing you have to keep in your arsenal of knowledge is what the Internet of Things is actually worth. By the year 2020 this massive technology is expected to be worth more than $7 Trillion, and this is a conservative estimate. Some IoT experts are even predicting that IoT is going to double this amount in the next 10 years. When you consider the number of items and devices that can be connected to the internet, such as cars and household goods, the number of devices could easily reach beyond 50 Billion in the next 4 years. Gartner predicts one out of every five vehicles, or 250 million total, will be connected to the internet by 2020.
- The next thing to keep in mind is that there is always a trial and error period with any new technology. While many companies and marketers are gearing up for a major IoT takeover, there is always the potential for a severe crash. There are some technologists that are already predicting that IoT will burn out sooner rather than later, citing that the market predictions are too lofty. Privacy and security are another thing to consider. Before investing in any IoT product or business, be sure to find out how the company is planning to take these two elements into account. With the predictions of how big IoT is expected to get over the next few years, this could end up being a massive vulnerability. Any connected device with poor security can lead to hacks and privacy issues. If you happen to invest in IoT with vulnerable security, this could be disastrous. Simply put, the bigger the idea, the harder it can fall.
- Also be aware that many subsectors are already tapping into the IoT concept, which can have both successful and disastrous consequences for anyone involved. While large corporations like GE can invest and walk away with $6 Billion, smaller companies and individuals might not be as lucky. Subsectors only represent a small portion of this developing technology, so be aware of your risks before investing in such companies. IoT offers both large and small companies a huge opportunity, just make sure you fully understand the business’s capabilities and overall goal.
- The key to understand IoT and getting involved is narrowing down your investment opportunities. It’s wise to only be in business with a few companies involved in this technology. As IoT becomes more mainstream, you will find more companies trying to cash in on this new trend. As with any investment opportunity, it’s important to do your own research to find out where and how you can get the most return. Investing in a new technology it just like anything else, it’s best to understand the risks and proceed accordingly. Play it safe by varying your investments and not putting too much time or money into a single entity.
- The last thing to keep in mind is your approach. Remember that when investing in technology you are making a long-term commitment. As IoT technology continues to develop and mature, it will begin finding its way into every aspect of our lives. Soon IoT, and connectivity in general, will become commonplace. It’s just going to take some time and investments from individuals like you for it to come to fruition. Before we know it, IoT will change the way we grow and buy food, commute to work, and even manage our home’s energy usage. Remember that when you invest in IoT, you are making an investment in the future.
Regardless of whether you invest in a large corporation or a small start-up, technology always takes a few years to reach its fullest potential. This is why the short-term way of looking at things needs to be thrown out the window.
Keep Reading: 4 Predictions for the Internet of Things in 2016