Financial markets recently celebrated the 20th anniversary of Amazon’s debut as a public company. And it has been 21 years since the KMS Quarterly first featured the economic and investment potential of the Internet – the “information superhighway,” as it was often described at the time.
Back then and for two decades since, fascination with the Internet has mostly revolved around streamlining and enriching people’s access to one another, their entertainment media, and retail goods and services. That phenomenon has spread well beyond our desktop computers to tablets, smartphones, etc.
Just as profound are the rapidly advancing capabilities of connected things – everyday objects continuously sending and receiving data, enhancing their efficiency and responsiveness to the people and environment around them.
A recent Business Insider Intelligence report estimated that by 2020, this “Internet of Things” will comprise as many as 24 billion devices operating around the world, easily eclipsing the number of traditional computing devices accessing the Internet. The next five years may see some $6 trillion of investment in such devices and technology.
Increasingly, our cars, appliances, and home systems will process and push information to us and an array of service providers and suppliers. If your refrigerator already texts you when the milk’s running low, you have a pretty good inkling of what’s to come. You’ll almost certainly prefer that it ping your designated grocery service instead of bothering you with the news.
Manufacturing and agriculture are also headed for a data-and-connectivity-driven transformation. Just as cars are now loaded with sensors to detect mechanical issues or maintenance needs, the world’s machines, power plants, factories and fields will use sensors communicating information across integrated networks of manufacturers, shippers, and other service providers.
Key objectives include more timely delivery of replacement machines and parts, efficient maintenance schedules and energy use, optimization of equipment performance, comprehensive surveillance of soil and crop conditions – in other words, less friction, less waste, and greater productivity.
Many devices already carry on a robust exchange of data across the Internet, with us plodding humans privileged to drop in on those conversations as required. While much of the developed world has been growth-challenged in recent years, companies that seize the potential of this transformation may enjoy a significant growth premium.
Millions of investors have piled into the acknowledged champions of the Internet of people and products, including Facebook, Amazon, Apple, Netflix, and Google. Maybe the next great surge of enthusiasm will embrace the emerging stars of the Internet of Things.
Published by KMS Financial Services, Inc. * June 2017
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