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The “Internet of Things” refers to the idea of physical objects being connected to the Internet. Advances in wireless technologies and sensors will allow physical objects to send and receive data about themselves. Many of the technologies to enable this are already available – it is just a matter of integrating them together.
In a 2010 report by McKinsey & Company on the Internet of Things 1, six broad applications are identified:
- Tracking behavior. When products are embedded with sensors, companies can track the movements of these products and even monitor interactions with them. Business models can be fine-tuned to take advantage of this behavioral data. Some insurance companies, for example, are offering to install location sensors in customers’ cars. That allows these companies to base the price of policies on how a car is driven as well as where it travels.
- Enhanced situational awareness. Data from large numbers of sensors deployed, for example, in infrastructure (such as roads and buildings), or to report on environmental conditions (including soil moisture, ocean currents, or weather), can give decision makers a heightened awareness of real-time events, particularly when the sensors are used with advanced display or visualization technologies. Security personnel, for instance, can use sensor networks that combine video, audio, and vibration detectors to spot unauthorized individuals who enter restricted areas.
- Sensor-driven decision analysis. The Internet of Things also can support longer-range, more complex human planning and decision making. The technology requirements – tremendous storage and computing resources linked with advanced software systems that generate a variety of graphical displays for analyzing data – rise accordingly.
- Process optimization. Some industries, such as chemical production, are installing legions of sensors to bring much greater granularity to monitoring. These sensors feed data to computers, which in turn analyze the data and then send signals to actuators that adjust processes – for example, by modifying ingredient mixtures, temperatures, or pressures.
- Optimized resource consumption. Networked sensors and automated feedback mechanisms can change usage patterns for scarce resources, such as energy and water. This can be accomplished by dynamically changing the price of these goods to increase or reduce demand.
- Complex autonomous systems. The most demanding use of the Internet of Things involves the rapid, real-time sensing of unpredictable conditions and instantaneous responses guided by automated systems. This kind of machine decision-making mimics human reactions, though at vastly enhanced performance levels. The automobile industry, for instance, is stepping up the development of systems that can detect imminent collisions and take evasive action.
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