Everything You Need To Know About The New Internet—The 'Internet Of Things'

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This post is part of the “Future of Business” series, which examines how cutting-edge technologies are rapidly reshaping our world, from how businesses run to how we live. “The Future of Business” is sponsored by SAP.

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On June 6, 2012, a brand-new version of the Internet was turned on.

Chances are you didn’t notice anything different that day, as we switched over to Internet Protocol Version 6, or IPv6. Engineers worked for years so the new Internet could be turned on without causing problems.

But in the coming years, this new Internet will change your life dramatically. It will lead to the realisation of a concept called “The Internet of Things,” where everything—not just computers—gets connected.

And it’s going to be awesome.

A giant new Internet gives rise to the Internet of Things

We needed a new Internet because the old Internet was running out of address space. Behind domain names we're used to typing in like 'amazon.com,' there's a set of numbers that represents an Internet-connected machine. The servers running websites need addresses, but so do the computing devices we use to access them--and the old Internet only had 4.3 billion unique addresses.

That sounds like plenty, until you think about everyone in the world getting a smartphone and other Internet-connected devices proliferating.

While there are stopgap measures we could take to add new devices, it would get harder and harder to have new smartphones, websites, data centre servers, and other devices join the Internet.

The new Internet, IPv6, is 'trillions upon trillions of times larger' than the old one, says the Vint Cerf. He should know. He's not only the chief Internet evangelist at Google, he's also an inventor of the original Internet Protocol.

The size of the new Internet is what will lead to the Internet of Things. Any object can be tagged with a microprocessor or sensor that takes on an IP address and connects to the Internet--from dog collars to railway cars.

Sensors are also key to the Internet of Things

In addition to the new Internet, another technological development is making the Internet of Things possible: low-cost, low-power sensors.

Sensors can be programmed to sense the environment and share that information over the Internet, such as the location of items, their temperature and so on.

Vint Cerf has famously built a wine cellar with sensors. It makes sure bottles don't get lost and alerts him if the cellar gets too hot or too cold.

The Internet of Things will start to become more visible every year

We can see inklings of the Internet of Things today as all sorts of devices get 'smart,' from your home's thermostat to your water meter.

Every year, more smart devices will be invented and connected to the Internet. Soon there will be more devices on the Internet than there are people on Earth.

In five years, by 2018, Earth will be home to 7.6 billion people, says the United Nations. By contrast, some 25 billion devices will be connected by 2015, and 50 billion by 2020, says Cisco.

First step: We'll connect things so we can find and monitor them

Today, the Internet of Things is in its early stages and is mostly used to monitoring things from afar. For instance:

  • Ranchers are using wireless sensors on cattle to alert the rancher if a cow gets sick or lost.
  • Wearable health tech lets doctors monitor patients with chronic illnesses.
  • Sensors on household appliances can alert the manufacturer if an appliance needs maintenance or repair.

Second step: Things will start talking to each other

Eventually, the Internet of Things will do more than just alert you to the whereabouts or condition of something. Devices will talk to each other and grow autonomous. This is often called machine-to-machine technologies (M2M).

Examples include:

  • Cars that drive themselves.
  • Traffic lights that automatically respond to traffic jams or an accident, directing cars away from troubled areas.
  • Buildings that automatically turn the lights and heat off when they detect no one is in the room.

The Internet of Things will change your work life, too

Eventually, every item in the supply will be tracked and 'smart.'

The whereabouts of coworkers will be instantly available, too.

'Employees on every level will be able to perform their functions more efficiently,' says W. David Stephenson, a consultant with INEX Advisors.

This will alter how managers run companies, getting rid of hierarchical decision makers--the classic role of the boss. 'That, in my mind, will be the greatest business benefit of the Internet of Things,' Stephenson says.

There's real money to be made thanks to the Internet of Things

Naturally, the Internet of Things represents a huge business opportunity, too

By 2020, there will be 12.5 billion devices globally connecting machine to machine, up from 1.3 billion devices today. The M2M sector is a $121 billion business today that will grow to $948 billion by 2020, according to a report by the Carbon War Room.

And when factoring in all the companies doing everything with the Internet of Things, it will create a whopping $14.4 trillion in 'private sector economic value' by 2023, Cisco estimates.

The opportunity is huge for startups

Problems with the Internet of Things

As cool as the Internet of Things sounds, there is a downside. Issues such as privacy, reliability, and control of data still have to be worked out.

But even so, there's no stopping the Internet of Things now. Within a few years, it will be like mobile phones and broadband--you won't know how you ever lived without it.

Now, consider some more inventions tranforming our everyday lives ...

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