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How to Develop an IoT Strategy

Forget the hype and think about whether a technology or application adds value to your company.
By Mark Roberti
Jun 18, 2014

One of the hottest buzzwords in business these days is "Internet of Things." Cisco hypes it in TV commercials, and Google, Intel and Microsoft are reportedly investing in Internet of Thing technologies. Internet of Things conferences are held worldwide, and Apr. 9 was the fourth annual Global Internet of Things Day, with events held in more than 18 countries.

The term Internet of Things, now commonly referred to as IoT, was coined in 1999 by Kevin Ashton, who was trying to explain radio frequency identification to executives at Procter & Gamble. Ashton envisioned a world in which computers would communicate with passive RFID transponders on cases of P&G products and maybe even the products themselves. This would enable computers to collect and analyze information about what was happening in the real world, without people having to type information into a computer or scan a bar code.

Illustration: iStockphoto
Today, some companies have expanded the term IoT to include a wide range of smart devices, cloud computing, Google Glass and other technologies they are trying to promote. The truth is, experts struggle to define exactly what the Internet of Things is. The European Union has funded IoT research, but the project's website does not define the term. Cisco says the IoT is a "network of physical objects accessed through the Internet." TechTarget, a popular IT website, says it is "a scenario in which objects, animals or people are provided with unique identifiers and the ability to automatically transfer data over a network without requiring human-to-human or human-to-computer interaction."

RFID Journal recently surveyed its readers to learn their views on the Internet of Things. Six percent of the 516 respondents said the IoT is just a buzzword without much substance behind it. Half said it covers RFID and other technologies that are important, and 32 percent said it is an important trend their companies take seriously.

With the growing media hype, many businesspeople see the Internet of Things as something important they need to focus on. The question is: How do you develop an IoT strategy when it's not clear exactly what the IoT is?

Taken literally, the term Internet of Things covers any technology that links a physical object (other than a computer) to the Internet. There are, fundamentally, two reasons you would want to connect an object to the Internet. One is to be able to track and manage it. The second is to make it smarter.

Tracking and managing items is what RFID is all about, and many companies have been deploying RFID to identify assets, equipment, inventory, tools, work-in-process and other "things" to reduce operational costs, increase sales, improve safety and enhance customer satisfaction. Often, RFID data is filtered and transferred to software running in the cloud so it can be shared within an organization. Inventory data, for example, can be made available in near-real time to salespeople or to alert employees when goods need to be replenished.

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