IoT Market Could Be Worth $11 Trillion in 10 Years

Much like in the early days of the cloud, the Internet of Things (IoT) is making headlines heralding the possibilities and analysts are making big bets on its future. Global consulting firm McKinsey & Company is the latest to jump in with some bold predictions.

McKinsey Global Institute, the firmEUs research arm, has concluded that the IoT hype may actually understate the technologyEUs full potential. ThatEUs no small statement, given McKinsey is estimating IoTEUs potential economic impact at as much as $11.1 trillion per year in 2025.

For the purpose of its research, the firm defines IoT as sensors and actuators connected by networks to computing systems. These systems can monitor or manage the health and actions of connected objects and machines. Connected sensors can also monitor the natural world, people, and animals.

EUTo realize the full potential from IoT applications, technology will need to continue to evolve, providing lower costs and more robust data analytics. In almost all settings, IoT systems raise questions about data security and privacy,EU according to the EUThe Internet of Things: Mapping the Value Beyond the Hype," report. EUAnd in most organizations, taking advantage of the IoT opportunity will require leaders to truly embrace data-driven decision making.EU

Forcing New Business Models

McKinseyEUs report doesnEUt just look at the vertical industries in which IoT will be deployed, but also the physical settings, such as cities and work sites. Interoperability between IoT systems is critically important for maximizing value, according to the firm. On average, interoperability is required for 40 percent of potential value across IoT applications and by nearly 60 percent in some settings, the report noted.

McKinsey has identified nine settings, including homes, offices, factories, work sites (such as mining, oil and gas, and construction), retail environments, cities, vehicles, and the outdoors. The firm also identified a EUhumanEU setting for...

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