The internet of Things

For now, commercial and technical motivations are paramount, but the impact of the Internet of Things will have profound changes on business models, the national economy and society.

The Internet of Things (IoT) has the technical transformational power to change our world. While we are only beginning to understand how its impact will unfold, we are only at the beginning of the journey.

There are already many successful companies from Germany and the U.S. that have implemented IoT business models.

Some of the most well-known companies using IoT business models are companies like NEST (home automation), Uber (transportation), and Siemens (manufacturing). One of the most successful companies in the IoT space is Nest. With a clean design, a simple user interface like existing programmable thermostats, and financial backing from Google, Nest has had great success. The Nest solution can learn the schedule of electrical devices such as lights, TVs, computers, and stereos, program itself, and be controlled from a cell phone. This allows users to save 20% on energy costs. Nest was bought by Google in 2013 for $2.3 billion.

Uber and Airbnb are in fact Internet of Things (IoT) platforms, as each user carries sensor technology on their smartphone.

The Uber model is based on the hardware and applications available on a typical smartphone. Global positioning system (GPS) is the most obvious, but many other sensors are already built in and more will be added in the future.

In Germany, Siemens manufactures nearly 12 million programmable logic controllers annually in Amberg, Germany. A PLC is a control panel that can control systems as diverse as cruise ships, ski lifts and assembly lines.

Microsensors in the production process have helped the company virtually eliminate errors: it claims its PLCs are 99.99885% perfect.

German startup KONUX combines machine learning algorithms and IoT to offer software-as-a-service solutions for automating rail operations, monitoring and maintenance processes.

Networked devices can reduce costs and increase efficiency in production and manufacturing. They promise not only more effective management, but also smarter working.

Through the Internet of Things, systems can function better without human intervention and organize predictive maintenance without us having to intervene.

Soon, every device we own - and nearly every product we use - will be connected to the Internet. Whether it's a cell phone, wearable devices or everyday household items, the Internet of Things (IoT) is connecting us in ways we struggle to comprehend.

Gartner Research estimates there will be 25 billion connected things by 2020: smart cars, smoke detectors, door locks, industrial robots, streetlights, heart rate monitors, trains, wind turbines, even tennis rackets and toasters.

The IoT market - which includes hardware, software, systems integration, and data and telecommunications services - is expected to grow to $520 billion by 2021. That's an increase of more than 100 percent from 2017's $235 billion in sales.

More than half of the world's population now lives in urban centers, and nearly two-thirds will do so by 2050 - meaning 2.5 billion more city dwellers

Cities struggle with traffic, smog, crime, and inefficient lighting that consume between a quarter and half of municipal electricity budgets.

Technologies currently being tested will help cities of the future address these issues using IoT technology.

Smart cities use IoT infrastructure to collect and analyze data. Cities then use this data to improve infrastructure, public utilities and services.

Smart grids help manage electricity intelligently. The European Commission projects that by the end of 2020, 72% of consumers in the European Union will have smart electricity meters in their homes, and 40% of households will have smart gas meters.

San Diego has installed 14,000 streetlights connected to the latest LightGrid mesh networking technology. The CityIQ nodes are installed on select light poles in San Diego adjacent to the LED lights, but do not directly depend on or interact with the lights. The smart LED streetlights in San Diego only turn on when a pedestrian or vehicle approaches.

The CityIQ nodes are equipped with sensors that can detect air quality, temperature and wind speed.

The Industrial Internet of Things is based on concepts in manufacturing companies that lead to intelligent and horizontally integrated production systems. The resulting smart factories are able to meet dynamic customer requirements with high variability at small batch sizes, integrating human ingenuity and automation.

The Industrial Internet (Industrie 4.0) is useful for automation and control functions by leading to process optimization and optimized resource consumption.

Where does the term Industry 4.0 come from?

There are four different industrial revolutions that the world has either experienced or is still experiencing today. The term stands for the 4th industrial revolution.

Right now, we are in the transition from the third to the fourth industrial revolution.

This is important for this book because each industrial revolution has caused major upheavals in the economy, in business models and in society.