Gadget trends come and go, with only a few starting real tech revolutions. Thus, it is natural to be skeptical about the latest gadgets-gone-gaga trend: the Internet of Things (IoT).
However, Technology researcher Gartner projects that there will be 4.9 billion ‘connected things’ (or ‘smart-connected products’, as Harvard Business School Professor Michael Porter refers to them) this year. And according to Gartner, we haven’t seen anything yet. It predicts the number will grow five times by the end of the decade, to 25 billion connected things, including a quarter billion vehicles.
Will that really be the case? If two age-old industrial companies are bellwethers, the forecast might well be valid.
First, consider General Electric Co., the firm that sprang from Thomas Alva Edison’s New Jersey laboratory in 1878. Since 2011, the $149 billion industrial manufacturing company has committed more than $1 billion to IoT initiatives, an investment that is expected to yield revenue of more than $1 billion this year. What’s interesting is that the proselytizing is coming from the highest level at GE – from CEO Jeffrey Immelt.
The IoT has come to mean everything to Caterpillar Inc. as well. That says a lot, given that the roots of the $55 billion construction equipment manufacturer date back more than 100 years, when one founder, Benjamin Leroy Holt, began tinkering with a steam engine tractor in central California. Fast forward to today, Caterpillar’s CEO has similarly been smitten with the Internet of Things. “We have slightly over 3 million machines running somewhere in the world every day,” Doug Oberhelman told a reporter earlier this year. “What we don’t have today is all of those [machines] hooked into a system that can predict failures.”