While the internet of things (IoT) is still in its relative infancy, we are starting to see the first signs of what will ultimately be a transformational change to the way we live and work and how the public infrastructure will enable our society to be far more productive in the future. The potential benefits are vast with McKinsey recently estimating the global economic impact of IoT somewhere between $3.9Tn and $11.1Tn by 2025.
Machine to Machine (M2M) technology has already been with us for years, but costs have restricted it to a relatively narrow set of bespoke applications. New low-cost, long-battery life sensors, highly efficient mobile and 'low power' connectivity and the scalable addressing scheme of IPv6 have made it viable to connect billions of 'things'. But the real catalyst for IoT rests in the economics of cloud computing and the advances in data analytics that have made it possible to store the data these billions of things will generate and – more importantly - derive insight into how customers are using these newly connected products and service.
BT has already started to put the IoT to work inside our operations, helping us to understand the demands on our network and to give us the insight we need to better serve our own customers. We are helping our customers with an improbable range of challenges – from connecting sensor laden vehicles in the harsh environment of an African mine to using cameras to provide up to the minute stock data in a luxury retail setting. The transformative potential of IoT isn't just restricted to business. Momentum is building in the connected home and is an area where BT can obviously add value. IoT based Smart Cities will help cities provide sustainable services with fewer resources. Our award winning work with Milton Keynes is helping the City to deal with the pressures of growth, from parking and pollution to the practicalities of refuse collection. IoT powers BT's telehealth services for over twelve thousand residents across Cornwall.
IoT has a wider national significance. There is a huge addressable export market if UK companies get it right. We believe the UK can and should lead in IoT innovation and BT is committed to playing its part. Whilst acknowledging the potential of IoT, we recognise the challenges of securing such a pervasive platform and addressing the associated privacy considerations. We can already bring much to the table and our acquisition of EE – the UK's largest 4G mobile operator – will bring even more possibilities. The question we all need to all be asking ourselves isn't 'if' the IoT will impact our business, but 'how' and 'when'. And then make sure we are ready.