Google (GOOG -1.22%) (GOOGL -0.95%) is planning to launch an operating system for Internet of Things (IoT) devices soon, according to recent reports from The Information and Fortune. The OS, known as Brillo, is expected to be revealed at its I/O event on May 28 and 29.

Source: Pixabay.

Brillo is intended to do for IoT devices what Android did for mobile devices -- unite a fragmented universe of real-time operating systems (RTOS) under its software umbrella. This market could get much bigger over the next five years. Cisco expects the number of connected devices to double from 25 billion in 2015 to 50 billion in 2020 thanks to the use of embedded chips in everyday objects and wearable devices.

The business of IoT RTOS
Today, the RTOS market mainly consists of operating systems written by chipmakers for specific chips. Many IoT devices are "headless," meaning they don't connect directly to physical displays. Instead, they synchronize with apps on PCs or mobile devices. Therefore, an RTOS is harder to recognize than a mobile OS with a graphic user interface, like iOS, Android, or Windows Phone.

Google isn't the only company that wants to consolidate the RTOS market. Samsung recently introduced its tiny ARTIK IoT chips, which run on Mentor Graphics' Nucleus OS. Microsoft is also moving into the RTOS space with Windows 10 IoT Core, which is designed for ATMs, wearables, and even ultrasounds.

ARM Holdings, which licenses the majority of smartphone and tablet chip designs in the world, introduced mBed OS for IoT devices last year. ARM hopes to use the mobile market as an IoT launchpad with its Cortex-M embedded microcontrollers, which accounted for nearly a fourth of its cumulative licenses last quarter. ARM also recently introduced its next-gen IoT chips, codenamed Teal and Grebe, for connected cars and wearable devices. Plenty of other players, like Contiki, are also vying for a piece of this "invisible" market.

Security and analytics
A primary concern about the IoT market is security. Connecting homes, cars, and medical equipment to the Internet could leave them wide open to hackers.

Intel (INTC 1.79%), which formed a dedicated IoT unit for embedded chips last year, unveiled an IoT security platform based on technology it gained from its acquisition of McAfee in 2010. In response, ARM acquired Dutch security specialist Offspark last year to integrate its security software into mBed.

The challenge Google faces is that embedded devices are often considered more secure if the software is designed specifically for the hardware. Convincing IoT device manufacturers to run a Google OS on Intel or ARM-licensed hardware could be challenging, since it could open up new vulnerabilities.

Several companies -- like ARM, Intel, and Cisco -- bundle analytics solutions for IoT devices with security software. This allows IoT devices to aggregate data in real time for analytics purposes. That data is highly valuable to Google, which builds targeted ads based on the information it accumulates from users.

How Brillo fits into the Google ecosystem
To understand how Brillo fits into Google's ecosystem, we should discuss the company's other plans for connected devices. Google already owns Android, the most widely used mobile OS in the world. It intends to use Android as a foundation for expanding into smart homes, connected cars, and wearable devices with Nest, Android Auto, and Android Wear, respectively.

With Brillo, Google could reach headless fitness bands. In the future, a Brillo-connected smart toothbrush could evaluate how well a person brushes his or her teeth. A Brillo-connected refrigerator could even order products automatically, similar to what Amazon is trying to do with its Dash Buttons. By expanding its reach beyond PCs and mobile devices, Google would collect much more data for marketing purposes.

Amazon's Dash Buttons. Source: Amazon.

That's easier said than done, though. In addition to potential security concerns, there are also major privacy ones. Therefore, it's unlikely that Google's advance into everyday objects via the Internet of Things will go unnoticed by regulators and privacy advocates.

The key takeaway
IoT is one of the hottest topics in tech today. As the owner of the largest search engine and mobile OS in the world, Google could possibly consolidate the RTOS market with Brillo. However, investors should remember that current operating systems already synchronize with a variety of mobile platforms, and security or privacy concerns might derail Google's dreams of collecting data from all connected devices.