The Internet of Things has been one of the most overhyped technologies in recent years, and that has left more than a few people skeptical of what it can do. That's partly the fault of ho-hum Internet of Things products such as smart refrigerators, which lead to the obvious question, "Why would I need that?"
But let's be clear: The Internet of Things, or IoT, is no gimmick. It has the potential to change how your food is grown, how your city uses electricity, how you maintain and monitor your health, and a host of other things that sound too far-fetched to be believed. But it's true. The Internet of Things is already here, and it's changing nearly every part of our world.
The Internet of Thing is going to be huge
In 2008, there were already more Internet-connected items than people in the world, and Cisco Systems (NASDAQ:CSCO) projects that by 2020 there will be 50 billion connected things. These include not just smartphones and tablets, but formerly unconnected items such as airplane turbines, cars, industrial equipment, and even trees.
All of these connections allow companies to work more efficiently and save a ton of money in the process.
General Electric (NYSE:GE) believes that if the oil and gas, power, healthcare, aviation, and rail industries increase efficiency by just 1% using the Internet of Things, that would produce a savings of $276 billion over the next 15 years. The company expects IoT technologies to add up to $15 trillion to the global GDP by 2030.
General Electric is not alone in making huge IoT projections. Cisco estimates companies will generate nearly $19 trillion in combined revenue and cost savings from the Internet of Things over the next 10 years.
This isn't a pipe a dream
But future predictions don't always pan out, so let's look at a few examples of why the IoT is already here to stay.
Agricultural companies are using the Internet of Things to increase crop yields and improve field management. A company called SemiosBio uses the IoT to manage pest control in orchards. The company hangs boxes equipped with sensors, cameras, and cellular connections so it can monitor pests remotely. When too many bugs migrate to the area, the boxes can automatically release pheromones to confuse the bugs' mating habits and protect the orchard.
Our health is benefiting from the Internet of Things as well. A company called Proteus Digital Health makes an ingestible sensor that transmits data to a wearable patch, which allows medical professionals and family members to monitor when a patient has taken his or her medication.
General Electric uses sensors and software to connect airplane turbines to the Internet. Gol, a Brazilian airline, uses GE's technology to collect and analyze data so that it can optimize its airplane turbines -- saving the company a projected $90 million in fuel costs over the next five years.
The public sector is getting in on the IoT action as well. Prague, London, and Rotterdam have tapped Sierra Wireless (NASDAQ:SWIR) to create Internet-connected city light systems. The connected system enables the cities to manage energy usage and broken lights, and remotely add more or less lighting in specific areas. Similarly, San Jose, Calif., teamed up with Intel to add sensors throughout the city to monitor pollution, improve vehicle traffic patterns, and manage water quality.
If all that weren't enough, a Dutch company has connected cows (yes, cows) to the Internet in order to track where they go, when they get sick, and if they're pregnant. By doing so, the company can monitor the health of the animals and ensure they get treatment exactly when needed.
Believe the IoT hype
While there are plenty of seemingly outlandish Internet of Things statistics, there's no denying IoT technologies are already transforming many industries. We're just getting started in connecting all of these items to the Internet, yet cost savings and increased efficiencies are already being realized.
And it's not too late for investors to benefit. A wide range of companies are betting big on this new tech wave, from megaconglomerate GE to small caps such as Sierra Wireless. Patient investors who see the Internet of Things through to the end won't likely be disappointed -- beginning with admitting the IoT is here to stay.