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The Internet of Things (IoT) is gathering steam, according to a new report from telecommunications and cloud services provider Verizon.
Released today by the company's Enterprise Solutions division, the report, titled State of the Market: The Internet of Things (IoT) 2015, delves into the transformative effects of an expanding machine-to-machine (M2M) and smart connected device marketplace. One of the biggest changes the IT and communications industries will need to contend with is the sheer number of new connections.
Backed by data from technology market analyst firm ABI Research, the report predicts that between 2014 and 2020, the number of business-to- business (B2B) IoT connections will grow at a rate of 28 percent year-over-year, reaching 5.4 billion connections worldwide. By comparison, 1.2 billion IoT connections were trafficking in B2B data in 2014.
An improved financial outlook awaits businesses that jump on the IoT bandwagon, said the company. Verizon predicts "that by 2025, organizations that adopt IoT extensively will be at least 10 percent more profitable than competitors that don't," stated the report. Also by 2015, IoT-savvy businesses will put smart cities at the top of their lists as they consider where to set up shop next.
Powerful processors, declining sensor costs and a range of connectivity options are bringing IoT capabilities within the reach of more organizations. An improving economic landscape is also moving things along, said Mark Bartolomeo, vice president IoT Connected Solutions at Verizon.
"Within the past year, amid an improving economy, we've seen a number of new entrants starting to use IoT as a roadmap to improve their customers' experiences, accelerate growth and create new business models that are driving societal innovation," said Bartolomeo in a statement.
Already, booming demand for IoT solutions is having an impact on Verizon's own bottom line. The company reported that its IoT business experienced a 45 percent year-over-year sales increase in 2014, "with 4GLTE activations growing by 135 percent." To date, the company is managing 15 million IoT-enabled connections.
In 2014, the Verizon-managed IoT connections for manufacturing sector increased by 204 percent, followed by finance and insurance (128 percent) and media and entertainment (120 percent). Home monitoring (89 percent) and retail and hospitality (88 percent), round out the top five.
Despite these gains, IoT adoption is currently low. "Verizon experts estimate that just 10 percent of enterprises have deployed IoT technologies extensively -- suggesting that many organizations are in a pilot phase or are waiting for more insights from early adopters," said the company in a statement.
Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.
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