Not Just B2C: The Economy of the Internet of Things

So far, the greatest supporters of the Internet of Things seem to be lacking one thing: a marketing department. Why? Because all the hype concerning our soon-to-be-digitized world has thus far revolved around its promise to bring everyone new toys: wifi-enabled kitchens, garages, bathrooms, etc. And those toys will be good and fun for everyone–but they’re only half the story.

Facebook sets the stage

Let’s rewind to a previous innovation to see why. Put yourself in Facebook’s shoes in the mid 2000s. Its user base was growing at an exponential rate. Things were good. But had Facebook stopped there, it would have missed out on the market innovation that made it a billion dollar company: information. Suddenly, a B2C (business-to-consumer) service transformed into a B2B (business-to-business) service that created a gargantuan market for advertising and information. Facebook grew from a few employees to thousands, and businesses all over the globe began to grow and expand because of its usefulness as a marketing tool.

The Internet of Things is poised for this same transformation from a B2C mindset to B2B. The market for digitizing home appliances and tools is indeed large, but think about what this innovation will mean for the business world.  Manufacturers all over the world will not only need an Internet of Things infrastructure in their products, but in their communications and corporate operations as well.

Think about a manufacturing plant that must periodically replace the gears in machinery when they run down. Because the gears can last anywhere from 6 months to a year, regular inspections must occur in order to see if the gears need to be replaced. It doesn’t take an accountant to know the financial burden and inefficiency this places on the company. With the Internet of Things, however, the wirelessly connected factory will be like a child that finally learns to tell his or her mother what’s wrong. No more guessing games or wasted inspections.

The next industrial revolution

Take a second to consider the economic implications for this. Just like the development of railroads across the continental United States paved the way for an industrial revolution, the development and proliferation of the Internet of Things will end up connecting the world in a way never seen before. Except, in the place of goods and raw materials, it will be data that is transported across the nation and the globe seamlessly. And what’s more, that data won’t just end up in the cloud until someone finds a use for it, but will be automatically put to use by this new “smart” infrastructure that has already begun to change the world.

But if we would prefer to stick to kitchens and garages, that’s okay too.