In 2020, there are more devices connected to the Internet than people and the gap continues to grow. The last year ended with 4 billion Internet users worldwide, while the Internet of Things included 7 billion devices. It is also expected that by the end of 2020, the number of connected devices will reach 10 billion.
In terms of science, IoT (Internet of Things) is a network of interrelated devices such as digital machines and computers, that have their UIDs (unique identifiers) and can transfer data from one to another without requiring special human-to-computer interactions.
But what about IoT opportunities for business? Nowadays, IoT is a powerful economic driver and the area where you’ve got extra chances to get funding for your startup. In the article, we’ll describe key results of IoT market revolution and point out some Internet of Things business opportunities.
Why IoT Has a Lot of Business Opportunities
IoT business opportunities are endless as this web segment covers most everyday life and market areas. It connects various tech products from banking terminals to smart home platforms. From the engineering point of view, IoT era begins at the point where there more devices than people connected to the web. In 2008, the point was reached and since then we are leaving on the Internet of Things environment regardless of our personal wish.
All that could sound dark and slightly doomed, but, in fact, the non-human segment of the Internet gives a chance for the global economy to become more human-oriented.
In conjunction with other advanced technologies, such as artificial intelligence (AI) and machine learning (ML), the Internet of Things is a real opportunity for us to solve problems that humanity could not cope with over the years.
For example, inequality, poverty, inequitable distribution of resources and much more.
And, of course, the Internet of Things can free whole classes of people from doing mechanical work.
To measure IoT business opportunity, let’s take some numbers. Last year, the global Internet of Things market was estimated at $150 billion. At the same time, according to the most conservative estimates, by the end of 2025, the market will exceed $1.5 trillion.
The Internet of Things is not yet fully explored. Therefore, startups in this area today receive funding much faster than other projects.
The development of IoT industry entails additional investments in related tech areas like smart home and self-driving cars that grow the most rapidly (compare $663 million gained by the industry in 2017 and $50 billion from next year). And what if we go further and take a look at the smart city concept that is widely discussed across Europe and the US?
A smart city is no more a dream about self-driving inhabited unit with automated transport systems, governmental services, and housing services, but a challenge for IoT architects. In 2019, over 20% of all huge IoT projects were launched in this area. That means that these years there will be a strong demand for tech solutions connected with city life automation.
Global trade and retail, banking, and healthcare systems will be certainly affected by the Internet of Things innovations. In 2020, there will be up to 4 web-connected devices for everyone on Earth. These devices will do a lot of work for us. And the one who masters the new niche first, offering a good solution in the field of automation of customary operations as his unique IoT business ideas, is likely to earn a lot.
How does IoT Impact Businesses?
IoT business ideas is only one aspect of how the Internet of Things development influences business. Obviously, new niches are forming this time, but what if we change our perspective and look on business in general, using the Internet of Things lenses.
Basically, IoT is an interconnected system of various appliances, individual devices, vehicles, and any other electronic items. At the same time, it is empowered by software that uses their sensors, actuators, and connectivity.
The major IoT idea is to make data (as well as Big Data) sharing and analysis fast and accurate. IoT doesn’t need a human anymore to get allowances for executing routine tasks — all of them are approved by the user in advance. That’s why some business operating spheres may change a lot because of IoT integration into their processes.
Here are several key business aspects that have already changed due to IoT innovations:
- A new approach to inventory tracking. IoT software can do a huge part of the work assigned to inventory managers. It can manage your storage units, measure inner company resources, check if all of your hardware is in order and make requests to your suppliers no matter are you working in healthcare, retail or web development field. And what is more important, IoT software never makes human-factor mistakes.
- Data collecting and interpreting. Any company works with data. You may collect information on buyer cycle, record the most popular requirements, study the way people use your online platform and product, and investigate the efficiency of your promotional channels. Luckily, technologies allow marketers to pass data processing to special software which collects and properly interprets data. Due to this the user experience improvement becomes easy to conduct.
- Automating efficiency and productivity. Internet of things investment opportunities is great for your even if you work in the area that is far from the IT world. Connect your business involved devices and give them the right to optimize their work automatically, calculate workflow drawbacks, and look for most frequent reasons for customer service slowing down. IoT implementation can raise the efficiency of your company twice and even more with no extra investments, make the quality of your product higher, and free up staff time for more creative tasks. Also, using IoT you can reject hiring low-skilled employees in favor of really skilled ones that could move your company ahead.
- No-office style. Technology has allowed many companies to forget about office concept at all. Nowadays, employees can interact with each other, using a variety of digital devices. The head of the company can also monitor employee performance and know exactly what is happening in the company from outside the physical office. This makes it possible to save money on renting premises and hiring specialists residing in your area.
Why Security in IoT Is So Important?
Most Internet of Things business ideas are connected with data processing and it is not just a trend. Facebook that automated its advertising tool is a typical example. In fact, what really has changed due to IoT is our ability to collect, store and analyze data. The number of web-connected devices grows dramatically and that results in data growth too. That’s why automated data proceeding became a great solution.
The situation has a bright and a dark side. First of all, due to IoT the market becomes smarter and companies get a chance to keep their product on a quality level, provide their customers with better service with fewer workers.
On the other hand, automated access to personal and company data comes with critical vulnerabilities to hacker attacks. To feel the advantages of IoT, you need to allow devices to use your data. But are you sure they will use it in the right way?
Any IoT device is literally a remote entering point to private servers. Cybercriminals use this network feature.
Another security problem is about the global market. To conquer the market, you need to be quicker and more agile than your competitors. New software in the field of the Internet of Things is very much in demand. Therefore, developers have a great temptation to bring to the market a raw product with personal data security drawbacks.
If the Internet of Things providers do not adhere to quality standards, which, in turn, in the European Union and the United States have already become part of the law, a social catastrophe is possible.
But there is some good news. Last year, the amount of money spent by companies on global IoT security programs reached $1.5 billion. And by the end of 2021 the global web security budget will grow to $ 3.1 billion, Gartner expects. This means that shortly IoT startup ideas connected to data protection will become even more profitable.
IoT Business Opportunities for Startup
Internet of Things opportunities seems to be endless and the only factor that limits them is the poor development of this digital niche itself (comparing to other tech market areas).
Nevertheless, nearly all modern digital devices are connected to the web. Some of them, have just a few Internet-based functions. For example, a video surveillance system records what’s going on within the area, saves and sends recordings to other devices automatically. A PC and a smart home are often multifunctional, they can execute various interaction scenarios and be programmed by us.
By the end of 2018, there were 26,792 tech startups that use IoT opportunities. The numbers are going to grow, as there is still a constant demand on that kind of projects among investors — over 78% of IoT startups got not more than 2 funding rounds.
Let’s look closer at IoT business opportunities in most lively markets such as Healthcare, Manufacture, Retail, Agriculture, and Banking.
IoT in Healthcare
Healthcare is a field where lots of IoT ideas were implemented for the first time. In 2016, around 60% of healthcare institutions were using the Internet of Things devices; and by the end of 2019, more than 87% of them plan to implement the technology to serve their clients.
Developed countries, such as the US (that has the largest IoT market in the world), have long appreciated the importance of automation and the ability to avoid errors associated with the human factor offered by IoT technology. It is expected that investment in projects related to the healthcare IoT market will increase to $534.3 billion by 2025.
The second IoT healthcare leader is the EU. As much as 2.79 million devices are going to be integrated into the EU healthcare system by the end of 2019. Here, we’ve collected the major trends of the niche to help you to develop your IoT business ideas:
That kind of devices is considered to be the most demanded electronic medical devices in the nearest years. A patient monitor consists of monitoring sensors and a display that measure, show and record patient's vital signs like body blood pressure, temperature, pulse rate, and respiratory rate. ECG monitors and EKG monitors are also types of medical monitors.
Transparency within healthcare organizations
Due to the Internet of Things, the healthcare sector will become more transparent and economical. Accounting systems, electronic patient recording systems and other approaches used by hospitals led to cost savings. More than 73% of organizations working in the health sector confirmed that their costs have decreased, and the quality of service has improved after the IoT implementation.
Every second IoT device in healthcare is a device for remote operation and control. This technology is already used in the UK and other countries. It is about providing medical care at a distance, as well as non-stop remote monitoring of a person’s condition.
IoT healthcare soft protection
More than 80% of organizations that have implemented IoT ideas have encountered errors in their work and suffered cyber attacks. Even now, equipment in this area has many vulnerabilities, and the cost of leakage of patient data could cost a lot. It is expected that in the near future the cyber defense systems for hospital electronic systems will actively develop.
IoT in Manufacturing
With the help of IoT, the owner can link operational technology (OT) and IT to automate lots of business processes, monitor product quality easily, and manage all the resources being far from the working cabinet.
Recent IoT ideas in the field of manufacture could be applied nearly to every existing industry. Find the most significant trends below:
Smart sensors in manufacturing
IoT makes manufacturing cost-effective and time-efficient. A variety of interconnected devices for monitoring the process of production and transportation help companies to find out the causes of product quality drawbacks and production delays.
At least 35% of US manufacturing companies use electronic monitoring systems and plan further digitalization of the manufacture. There, routine manufacturing processes are also executed with the help of IoT-connected robots.
3D printing for better quality
The technology of volumetric printing is used even by small manufacturers. Creating a piece prototype (and several variants of a single product) allows you to fix the critical vulnerabilities of the future industrial design and reduce losses caused by product defects.
By 2020, the profit of the technology market in the field of 3D printing is estimated at $3.1 billion. The areas of production where the technology will be most in-demand are the defense industry, aerospace, and automobile design.
Flexible production chains
Digitalization in manufacturing can take on a very different look. Within one enterprise they may use digital twins, in another company they experiment with mobile apps, and someone develops AI approaches. But the goal is always the same. Dealing with the global market requires flexibility, high service speed, openness and high quality from the manufacturer. To optimize the production schedule and customer service style, access to many databases is required. Automation maintenance IoT idea is what the solution looks like in 2020.
AI on each production level
It is not a secret that AI in manufacturing processes performs better quality control than people, as well as reduce the time required to execute the production task, saving your materials and money. By the end of 2025, the shared revenue of the AI market will reach $118.6 billion, and at least 20% of all solutions will be related to manufacturing issues.
AI will also be universally embedded in marketing. These processes are noticeable even now, and in the future, they will only get stronger. IoT-integrated devices will study customer demands and resource markets rates, independently improving products that will then be sent to mass production.
Big data storage and analysis
Using IoT will help managers make informed decisions about the future development of the enterprise. Programs that work with IoT devices will be able to collect data, such as a chronicle of enterprise productivity, demand for manufactured goods, prices for materials, and industry trends in local markets.
IoT in Retail
Internet of Things is a network that connects physical devices. In the field of retail, technology can also bring many benefits, improving the customer experience and reducing the owner’s costs.
Automatic debiting of funds from your account after you left the store with the selected product and displaying the store map on the screen of your smartphone after you came to the store for the product you saw on the Internet — are just the most obvious Internet of Things ideas, which, quite possibly, will soon become real in countries where consumerism is the norm and lifestyle. For example, in the USA and China.
How promising is the retail industry for those who want to launch a startup using IoT approaches? Let's talk in terms of numbers: the potential of the IoT-based retail segment today is estimated at $410 billion. It is expected that by 2025 the annual profits of the IoT retail market will increase to $1.2 trillion.
And here are some trends in the retail sector that you need to know about:
Mobile payment apps and checkout systems
No more queues! The most promising and simple technology that is implemented in retail networks is automated checkout. How does it work? Each product has an electronic tag that the sensor system reads when you exit the store. This approach not only stimulates sales (after all, you can shop quicker!) but also reduces the cost of maintaining cashiers. By 2025, 75% of stores are expected to use automatic checkout systems.
IoT allows retailers to increase conversion, using their creativity. First, you can give discounts to regular customers when they enter the store (the sensor system can fix the person on whose device the store application is installed). Second, you can give a discount to the regular customer on the goods to which he or she approaches in the store. Third, you can track the requests of your buyer on the Internet and provide discounts on exactly those products in your store.
Beacons system by Apple is also an example of providing customers with personalized (or, at least, on-demand) discounts. The app lets the user know about discounts in particular shops when she or he passes it.
Robots and smart shelves
None of these IoT-based technologies emerged yesterday, but it is expected that next years they will be used in every second store. Smart shelves save the time of store employees, as they can automatically keep track of the goods and send replenishment requests to the stock. Smart shelves may indicate a discrepancy between the price tag and their contents, as well as fix thefts.
As for the robots on the trading floor, they also help store owners save costs on the maintenance of the business. Robots can help people find the right product, find out all its characteristics, or check if the right product is in stock. An important advantage — robots can speak many languages!
Customer behavior study
To find out how to improve the layout of goods in your sales area or avoid human jams at the cash desk, install a tracking system to learn the behavior of store visitors. It can automatically process the information that the cameras, cash register, and mobile client apps send to it, and then provide you with ready-made solutions. That is one more Internet of Things investment opportunity.
Retail network management
IoT helps you to manage your stores and stocks at a distance, as well as constantly receive information about what is happening there. For example, you can equip stocks with temperature trackers and configure automatic temperature maintenance that recognizes the type of goods you store.
You can also monitor the delivery of new products to the store and suppliers’ pricing. Automatic transactions and product purchases are also the reality of the IoT world, which accelerates business processes by up to 25%.
IoT in Agricultural
Agribusiness is another area in which IoT solutions are very popular. The population of the planet continues to grow, which means that agriculture should produce more and more food products to feed us. Since Earth’s natural resources are limited, production can be increased only through the careful use of land, water, and other natural components.
AgTech is the sphere to which the Agricultural-related IoT ideas 2020 belong. Just 4 years ago, investments in this sphere amounted to $4.6 billion, and by the end of 2030, they are expected to increase by 60%.
Let's analyze the trends of IoT in Agricultural to determine the idea of a promising startup!
There are many options for the usage of sensors in Agriculture. For example, you can surround the field with sensors that will recognize the readiness of the crop and report it to farmers.
And here is another idea that has already been tested in Europe: sensors can be located in the soil. These devices measure the temperature, composition, and moisture of the soil, as well as monitor the development of crops. They can activate irrigation, disinfection and harvesting programs.
As you know, the equipment that farmers use is worth millions. The better it works, the higher the efficiency of the farm is. Modern combine harvesters, tractors and even smart farm systems that automate routine agricultural processes can be equipped with sensors that monitor their technical “health” and prevent breakdowns.
In addition, sensors can report where the equipment is located and predict its performance. Another type of sensors can automate tractors movements and measure harvest.
Automated field monitoring
Dron-based crop monitoring that is being actively used in the USA today is one more IoT business opportunity. IoT becomes the medium for transferring data from a drone's camera to a processor, which calculates whether the field will be suitable for efficient farming. The system predicts the time for which the land can be planted.
One of the modules of the monitoring system can be responsible for miscalculation of the risks of the region — it could measure the likelihood of natural disasters, droughts, and landslides in a particular zone.
AI has potential in the field of Agriculture, where most of the work is monotonous. Planting, fertilizing the soil, watering, harvesting and transporting the crop — all can be automated within the framework of the IoT approach.
Do not forget that the robot can very strong, it does not need to sleep and take a break for lunch. In addition, robots can be used in difficult-to-reach regions. Surprisingly, but robots are also environmentally friendly! The use of them allows us to reject 90% of agrochemical products!
IoT approaches in the relationship between farms and shops will help protect the end customer health. With the help of a special code, right now in some stores you can find out not only who the supplier of the product is, but also how this product was grown (tillage, terms, and conditions of storage of the crop, and much more). Thus, a farmer who has violated production standards will be personally responsible for his mistake.
IoT in Banking
Mobile tech and IoT development have a significant impact on the bank industry.
IoT-empowered banks can provide customers with really personalized and consumer-facing solutions. Digitalization and IoT automation turn banks into a convenient tool to manage finances for those who’d been scared of having any deals with banks because of bank procedures complexity. Banks’ operations are also becoming transparent for customers.
One more advantage is the raising inclusiveness of banks which are now reachable from any mobile device. A vivid confirmation of these thoughts is the Compound Annual Growth Rate (CAGR) of IoT in banking. From 2019 to 2027, this index is expected to reach 55.3%.
Let us look through the major Internet of Things ideas for banking!
Personalized banking solutions
The development of IoT is dangerous for the banking sector. Sellers and buyers, as well as employers and individuals use automated financial management systems based on the peer-to-peer business model which exclude banks at all. At the same time, banks provide valuable financial guarantees which peers do not.
However, banks must become flexible to meet the needs of customers. Financial institutions have already invested $117.4 million in tech startups to study customer behavior through analysis of their bank accounts and data from the bank’s mobile apps. The idea is to develop an alternative for the peer-to-peer model, even more flexible, personalized and reliable.
IoT-banking and security
IoT banking is a simplified system of financial transactions, which requires minimal actions from the client's side.
On the one hand, the client always has access to information about his financial transactions. On the other hand, he does not need to confirm routine things like permitting the bank to pay for the parking space that the client has taken. Mobile devices literary became the client’s pay points.
Another aspect of IoT banking is biometric passwords and tracking of the client’s mobile device. Matching a client’s mobile device, a camera of this device, a fingerprint scanner, bank servers, GPS sensors and scanners of bank card chips into one system resulted in maximum protection of client’s account.
Bank of Things (BoT) and data protection
Mobile apps that simplify banking operations is not the limit of digitization of banks, many think. A new concept by US financial institutions is called Bank of Things. It refers to the global IoT-in-business infrastructure that allows individuals and legal customers to exchange financial data within a single network (avoiding banks), which links all personal IoT devices.
Contactless payments and the ability to monitor the budget in real mode, as well as reducing transaction chains are major advantages of BoT.
Similar innovations have already been tested by Visa and MasterCard. Unfortunately, BoT-oriented business models have serious flaws like vulnerability to cyber attacks. For example, in 2018, 1.7 million bank accounts were affected by cybercriminals. It is expected that cyber defense systems will be in demand in upcoming years.
IoT in business is a philosophical concept rather than a scientific term with a clear framework. However, it linked together a lot of digital disciplines that had only been helpful for us individually.
Artificial intelligence, cloud services, high-speed Internet, edge computing and increased productivity of mobile devices altogether have given a new breath to a variety of business industries. Customer service has become more personalized, financial transactions have become easier, medical and professional areas have become more inclusive.
Do not be surprised that IoT is also a socio-cultural phenomenon and is already shaping our environment. During this period, for those who plan to launch a startup, as well as for those who run a business, it is important to recognize the prospects of IoT ideas. And the LANARS team is ready to help you with this!