IoT set to revolutionize digital transformation
Earlier in this series, we discussed how the VR (virtual reality) and AR (augmented reality) space is expected to dominate. Microsoft (MSFT), keen on finding new growth avenues, has launched HoloLens. Let’s see how the IoT (Internet of Things) fits into the next computing cycle.
Computing endpoints are everywhere: in our phones, smartwatches, home appliances, industrial equipment, and home refrigerators. This ever-expanding ecosystem of digital sensors has made it extremely cheap to gather data. However, the majority of the data is left unused. According to IBM’s (IBM) estimates, there will be more than 30 billion connected devices by 2020, leading to an exponential surge in the volume of data generated.
The IoT is the network between these connected devices. It enables these devices to share information with other devices and communicate through wired and wireless networks using IP (Internet protocol).
According to the Cisco (CSCO) Global Cloud Index, the IoT is expected to drive data creation by any device to 600 ZB (zettabytes) per year by 2020, compared with 145 ZB per year in 2015. As the above chart shows, M2M (machine-to-machine) connections are expected to amount to 46% of total connected devices.
Cisco’s latest report on factors driving global IP traffic estimates shows that, among various other categories of connected devices, the IoT will grow the fastest. IoT and database analytics applications are expected to be the fastest growing in the enterprise segment, at a CAGR (compound annual growth rate) of 22% between 2015 and 2020.
The IoT leads investments in data centers
The unprecedented growth in the amount of data generated by the IoT would require the adaptation of data centers, which explains Oracle’s (ORCL) billion-dollar capital expenditure to set up data centers.
Recently, IBM (IBM) announced plans to add four new cloud data centers integrated with cognitive intelligence in the United Kingdom (EWU). Alphabet (GOOG) invested ~$10 billion in building its cloud operations in 2015.