Welcome to the age of “Smart”. Smart phones, smart refrigerators and smart cars are just a sampling of what’s occurring in society. This “Smart” phenomenon, known as the internet of things (IoT), has permeated into consumers’ lifestyles into such items as watches, phones, and even clothing. It has also spread into businessto-business transactions and, yes, even the warehouse.
Internet of Things There are many definitions for the IoT but perhaps one of the most succinct is from the McKinsey Global Institute which defines IoT devices as those that “can monitor their environment, report their status, receive instructions, and even take action based on the information they receive.” McKinsey further notes that there are three basic components that make a “thing” or device part of the IoT:
Sensors to track and measure the activity that is taking place. Connectivity to the Internet is contained in the object itself, a connected hub, a smartphone, or a base station. Processors that enable the object to have at least some computing power.
Yes, as you can imagine, the size of this market is difficult to grasp. According to Gartner, there are about 4.9 billion “connected things”. In the next five years, that is projected to be 25 billion. Meanwhile, research firm IDC expects the global Internet of Things market will grow to $1.7 trillion in 2020 from $655.8 billion in 2014. One thing is for certain, the growth in IoT-enabled devices has been fueled in part by the declining cost of sensors, connectivity, and data processing power. The software needed to analyze this data has also improved and companies are using it to enhance operational efficiencies and seek out new business models.