Sunday, March 13, 2016

IoT Could Bring IT Advantages to Another 80% of Firms

There is a very good reason why communications and information technology  industry executives believe the Internet of Things will be so consequential.

For starters, we are approaching the point where every person that wants a phone, equipped with Internet access service, already will buy such products.

Such a saturated market will force mobile operators to look for big new markets. And a logical big new market is IoT.

So connecting billions of sensors, and putting their information to work, will create a huge new market for connections.

And IoT could create big new enterprise markets, bringing some IT benefits to "physical" industries that have been reaped mostly by "digital product" industries.

If it is true that “physical” industries make up roughly 80 percent of the private sector, and if those industries have deployed information technology at rates less than seven times that of leading industries, then the Internet of Things could lead to an enormous change in communications and information technology markets.

In fact, some might go so far as to argue that the full benefits of the Internet, beyond older waves of computer technology, might be reaped for the first time by most businesses, as a direct result of IoT.

Machine-to-machine communications related to “Internet of Things” processes will account for roughly 35 percent to 47 percent of mobile data communications by 2030, argues Michael Mandel, Progressive Policy Institute chief economic strategist and a senior fellow at Wharton’s Mack Institute for Innovation Management.

By 2030, more than 1900 MHz of spectrum in the sub-mmW bands (three times the current availability) and at least 1.2 million cell sites (four times the current level) will be necessary, Mandel argues.

Though “causation” arguably is difficult to establish, digital industries have had triple the productivity growth of the physical industries in recent years.

For the 14-year period between 2000 and 2014, productivity growth for digital industries has averaged 2.8 percent per year, compared to 0.9 percent for the physical industries.

“Today, tech/telecom spending per worker in the digital industries is almost seven times that of the physical industries,” Mandel says.

source: KEW Associates

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