In its latest forecast, Gartner Inc. predicts that nearly 6.4 billion connected "things" will be in use in 2016, up 30% from 2015.
According to Gartner, the enterprise will shell out a total of $868 billion on Internet of Things (IoT) next year on cross-industry and vertical-specific connected things -- everything from smart light bulbs and HVACs to hospital monitors and trackers.
The explosion in IoT-type devices will fuel a surge in spending on IoT services, said Gartner, as enterprises increasingly contract with external, IoT-centered providers to help jumpstart and govern their IoT initiatives. Total IoT services spending will reach $235 billion in 2016, according to the consultancy.
"IoT services of various kinds will be important to enterprises," wrote Jim Tully, vice president and distinguished analyst at Gartner, in an email. "These will provide functions such as consulting (to help enterprises recognize and capture the potential benefits of IoT), implementation services (carrying out integration and related functions), and managed services (operating and managing things on behalf of the enterprise)."
Jim Tullyvice president and distinguished analyst, Gartner
Tully believes these IoT services to be the "real driver of value" in IoT next year and beyond. That means CIOs can expect an onslaught of new IoT service providers fighting for their attention, which is why it's important to do the research.
"All of these services are important and the providers need to be evaluated carefully," wrote Tully. "I would single out managed services as being particularly critical, as these may involve the outsourcing of a key business process that may be customer-facing."
These IoT services may come from vendors that currently provide an IoT-related product and now offer the same kind of solution as a service, according to Tully. "The same guidelines apply -- look for expertise and track record within the vertical industry, endorsements from other customers, financial viability, a solid roadmap and so on."
Jonathan Reichental, CIO for the City of Palo Alto, Calif., is already planning for an IoT-centric future, in which connected things improve the quality of city living -- from shortening commutes to reducing pollution. The city has done away with analog traffic signals, upgrading to Internet-connected traffic signals from which data can be pushed out and pulled. And it is in the midst of deploying a system of traffic-counting sensors that's able to differentiate between cars, people and larger vehicles, as well as detect the direction of either individuals or vehicles, Reichental said. The citywide push to exploit IoT adds another wrinkle to his job.
"What's happening is, as we move into connected cities, the challenges go way beyond information technology; we're talking about moving parts here. The physics of smart cities now comes into play and that hasn't, traditionally, been the role of the senior officer involved in all things digital and Internet-related," Reichental said.
IoT services and the CIO agenda in 2016
"It's important for CIOs to have visibility of any project where the data could potentially be shared with other functions across the company," wrote Tully. "This is why we recommend the formation of teams to explore IoT that are made up from individuals from each major unit -- including IT."
As the value of IoT data becomes more apparent to enterprises, CIOs will need to have a strategy in place for protecting that value, Tully said. "This is one of the key issues for CIOs. Managing and securing this data will be a key challenge of the next few years," he said.
Indeed, Reichental said he has spent a lot of time thinking about the risks related to an IoT-enabled city -- and his responsibilities as chief caretaker of the data.
"When it comes to the smart cities and the Internet of Things, you are dealing with real issues around safety," Reichental said. "If a traffic signal system is uncoordinated, cars will crash. If a system of triggers won't work, police won't be dispatched or ambulance won't go to the right place."
CIO news roundup for week of Nov. 9
Here is more technology news from the week:
- Four men were charged by federal authorities this week on charges that they hacked into several financial institutions, including JP Morgan Chase, last year, gaining access to more than 80 million customer accounts and generating hundreds of millions of dollars of illegal profit. In a plot straight out of Hollywood, the men and their co-conspirators had a massive global hacking ring from 2012 to 2015 that stretched across Israel, Cyprus, Switzerland and the U.S.
- Self-driving cars may be the future, but there are still a few speed bumps to get over before mass deployment. One of Google's self-driving cars was pulled over this week for driving 11 miles under the speed limit, causing traffic to back up behind it. The traffic officer stopped the car and made contact with the operators. For future traffic violations involving autonomous cars, Google has stated that the company itself should be responsible for any tickets.
- A new mobile app lets you contribute to cancer research while you sleep. All you have to do is plug in your phone before you go to sleep and let the app harness your smartphone's processing power overnight. Your phone will receive genetic sequencing tasks from the Garvan Institute, run data to complete the tasks, and then send the completed information back to the institute for research use, according to Quartz.
- T-Mobile Binge, a new feature from the telecommunications company, lets users stream video from services such as Netflix, Hulu and HBO GO without being charged for data. The catch is that the videos will stream at a lower quality of 480p, but T-Mobile is betting most customers will accept the lower quality in exchange for watching them for free. Customers will still have to pay individual subscription fees for the streaming services. Your move, Verizon!
Check out our previous Searchlight roundups on IDC's 2016 predictions and Oracle cloud entry and an HP cloud exit.
Experts: Don't leap into IoT services; take small, careful steps
Concerns over Internet of Things security prompt increase in IoT services