IoT: The benefits of interconnectedness

08 April 2016 04:01 PM | #News

Steve Case, the founder of America Online (AOL), recently discussed his forecast of the future of technology in a recent Fortune article. Case briefly outlines his theory of technological innovation, which can be split into three waves:

  1. Building the foundations of the internet (networks and servers)
  2. Building on the foundations of the internet with social and mobile
  3. Integration of the ‘internet more seamlessly and pervasively in every aspect of our lives’

The third wave is the wave in which we currently find ourselves. In practice, this wave refers to the ‘internet of things’, or IoT, which aims to connect everyday objects to enable them to exchange data with each other as well as with us. The idea is that such interconnectedness will ease the burden that is life. Nest, a provider of smart thermostat technology, has garnered much attention in the IoT sphere, not least because it was acquired by Alphabet Inc for $3.2 billion in 2014.

The sector has since proliferated, with the likes of Samsung offering connected home solutions and even Amazon offering an IoT platform. Additionally, a number of businesses bringing to market a range of IoT solutions are successfully raising large amounts of capital from investors, examples of which include Juicero which recently raised $70 million (Series B) for its internet connected appliances and Ring which has raised close to $100 million for its smart doorbell. The potential use cases are endless:

As to the benefits of such interconnectedness, the jury is out. The potential commercial benefits to end users within industry and commerce are immense. Equally, IoT’s potential to benefit individuals within the healthcare vertical could have profound implications on the industry, not to mention the potential benefits available to a range of other verticals. How much value a smart fridge or oven could add to one’s life is debatable. Of most concern, however, is the potential breach of privacy, both in commercial and personal use cases such as those outlined above. Are there adequate safeguards and measures being considered to decrease the risk of potential data breaches?

What is known, however, is that investors continue to be interested in IoT despite the unknowns, given the potential rewards. CB Insights estimates that funding for IoT start-ups doubled from $768 million in 2010 to $1.488 billion as of November 2015. This is a constantly evolving space, so stay tuned!

Zafar Kanani

Forbury Invesment Network