10 Ways Internet of Things Is Triggering a New Surge of Web Growth

by Don Reisinger

It’s rather shocking just how fast the IoT market is growing. According to research firm IDC, the global IoT market was already worth $1.9 trillion in 2013. That figure included just about everything that was connected to the Web at that time. But it’s a staggering sum.

Over the next several years, developed countries around the world will lead the charge in IoT development. Last year, in fact, 90 percent of all the revenue generated through IoT came from developed countries. Although that percentage is expected to decline slightly in the next several years, the developed world will continue to be the main driver of IoT growth.

While consumers are interested in Web-connected products, it’s important to note that it’s really the businesses delivering those devices that are helping to grow the market. As IDC pointed out, technology companies are working hard to create products that aren’t your standard dumb boxes. Instead, they want their products to live on the Web and rely on it to deliver a better customer experience.

When Google acquired home-automation company Nest Labs for $3.2 billion in January, it created a unique opportunity for the IoT market. There are a relatively small number of startups competing in the home-based IoT market at the moment. Google and a few other major companies now own most of the companies in that market. IDC and others believe that many more startups will join the fray with new devices, services and business plans.

Google is placing its massive footprint on the IoT. Besides acquiring Nest, the company noted in a letter to the SEC late last year that it believes differentiating products by “device” is a mistake. Looking ahead, the company noted that the line between different device categories will blur as they all come together on the Internet to deliver various experiences to customers. It was an interesting piece and speaks to Google’s vision of the future.

Apple is trying to eat Google’s lunch in the home-automation market. But Apple’s approach involves a new home-automation suite of software and services, called HomeKit, which it introduced this month at the Worldwide Developers Conference. Apple hopes developers and device makers will jump on the HomeKit bandwagon and make customers rely on iPhones and iPads to control their automated homes.

Why are so many people interested in IoT? It all has to do with convenience. Take, for example, televisions. By putting a wireless chip into televisions, it makes them far more convenient for the user. In addition to watching live television, users can go to Netflix, check out shows on Hulu Plus, and more. The Web changes the paradigm of using products.

Although Google and others have said that they currently have no plans to invest heavily in ads for home-automated products, don’t be surprised if eventually, that happens. Imagine opening your Internet-connected refrigerator and seeing an ad or a coupon for a new brand of apricot jam because your old jar of jam has been hanging around for six months. The IoT could create a whole new ad industry.

The big question security experts are asking about IoT is how practical is it for those who want to maintain their privacy? Every device connected in homes and businesses presents an inviting new target for hackers and could create a new world of headaches for regular consumers. But judging from IDC’s figures, these concerns won’t slow down the growth of IoT.

So just how different will the IoT space look by 2020? According to IDC, the space will generate $7.1 trillion in revenue that year, dwarfing the $1.9 trillion generated in 2013. With that scale of growth, there is no telling how many and what new types of devices will to come with Internet connectivity in the coming years. So get ready.