After years of hype, anticipation, and gradual acceptance, the Internet of Things (IoT) appears to be on its way to becoming a popular business tool. The number of companies using IoT technologies has increased from 13% in 2014 to about 25% today. In addition, the number of IoT-connected devices worldwide is projected to rise to 43 billion by 2023, nearly tripling from 2018.
This degree of acceptance is both the product of and the driving force behind the growth of IoT-supporting technology. For one thing, technological advances would make it simpler to incorporate IoT technology, enabling a wider variety of companies to benefit from IoT applications. Despite the fact that large companies have been investing substantial capital in IoT technologies for years, small and medium-sized enterprises will benefit from this new IoT maturity wave. Even if they don’t have the money to build custom apps, they can still invest in simple IoT solutions.
As regular investors in mid-sized companies, private equity (PE) funds can re-evaluate the Internet of Things as an area that can help generate significant value. To that end, this paper will provide an overview of the growing IoT market, its main applications, and the components that make up the IoT technology stack. These insights can then be transformed into business advantages for PE funds involved in participating in the IoT as investors, shareholders, or partners.
IoT growth varies depending on the underlying technology. Advanced key technologies and a proliferation of devices have fueled the growth of IoT technologies. Sensor technology will continue to become cheaper, more advanced, and more commonly available as it is integrated in IoT devices. As a result of this availability and cost-effectiveness, new sensor applications, such as large-scale surveillance and detection, would be possible. Meanwhile, computing power has risen by a factor of 100 in the last 15 years. As a result, technologies like real-time analytics and artificial intelligence can migrate from local devices to cloud and edge computing solutions. Furthermore, with the launch of 5G, increased mobile connectivity would allow new applications for augmented and virtual reality experiences.
Finally, the IoT market would broaden as current IT devices are expected to be connected to the Internet of Things. Traditional connected IT devices are rising at a slow pace of about 2% per year. However, with more than five billion smartphones, two billion computers, and one billion tablets in operation, there is a large demand for mobile convergence. Although there are over 200 known IoT applications in enterprise settings, IoT adoption is not limited to large corporations. 6 Early adopters have gone beyond pilots to implement IoT solutions across their entire organisation. Indeed, IoT technologies have already spawned a slew of ground-breaking applications in fields as varied as Industry 4.0, smart cities, smart homes, connected cars, and e-health.
Furthermore, advances in the technologies that contribute to the IoT mean that all affected sectors can now access functionality that did not exist five years earlier. B2B companies, for example, have begun to implement Industry 4.0 technologies in order to maintain direct connections with their products in the field. This continuous monitoring allows for predictive maintenance and increases efficiency and equanimity.
Over the last five years, the IoT technology stack has evolved, and each layer now provides substantial business growth opportunities. Device-enablement platforms have the distinct strategic advantage of facilitating related IoT growth while still in the early stages of their own development.
The IoT has significant potential to increase output, decrease production costs, improve safety outcomes and reduce environmental impact. The benefits delivered by the IoT would have substantial flow-on effects given the importance of mining to the Australian economy.
Adopting IoT technology would help primary producers increase yields and reduce costs, which in turn would lift profitability and improve the competitiveness of Australian produce in international markets.
Construction has been one of the slowest industries to adopt process innovations, yet it is characterised by physical activities and a significant amount of technical equipment. The combination of these two factors makes for substantial potential benefits from the IoT.
While other industries have reinvented their delivery models, technology base and value chain, healthcare in Australia remains relatively unchanged and is becoming increasingly unsustainable. The potential impact of the IoT on the broader healthcare sector is enormous.
Any advice provided by Laverne is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.
