All the buzz in tech these days is about the Internet of Things. Is the hype justified? Will it change everything, or is it a passing fad?

Tl; dr. It depends, yes, and no. In that order.

To expand a little on that:

Is the hype justified?

It depends on where it is being used, and what for.

So, the use of the Internet of Things (IoT) in industry is really taking off. In fact, just recently (end of July 2016) 451 Research released a report stating that 65% of enterprises are already using the Internet of Things.

There are numerous examples across many sectors – everything from:

• Agriculture – E & J Gallo wineries used IoT technologies in their vineyards to reduce water consumption by 20%, with an expected 10-20% crop yield increase, while nearly half of all tractors and harvesters in the US are connected to the Internet through AT&T
• Mining – Rio Tinto has rolled out fully autonomous trucks at two of its mines in Australia. The trucks, which are supervised from a control room 1,000km away in Perth, outperform manned trucks by 12%
• Aviation – according to Bill Ruh, GE’s CEO of Digital, GE’s jet engines produce 1TB of data per flight. With a typical plane flying 5-10 flights per day, that’s in the region of 10TB per plane per day. This data gives near realtime data on the status of planes engines, increasing their reliability, fuel efficiency, and safety
• Trains – New York Air Brakes has rolled out a sensor solution for trains, which it says is saving its customers $1bn per year
• Connected cars – in its connected vehicle portfolio, AT&T manage the connections for Tesla, Audi, GM, and Uber. They have 8m connected cars atm, and expect to grow that to 10m by the end of 2017. Tesla alone, in the 18 months since Tesla starting collecting telemetry data from its customers’ cars, has collected 780m miles of driving data. It is now collecting another 1 million miles every 10 hours. And the number of miles increases with each new Tesla vehicle sold
• Energy – Scottish and Southern Energy (SSE) have seen savings of £3M per year from early plant failure detection, with insurance cost reductions of £6M, and AT&T has partnered with solar company SunPower to connect residential solar panels for remote monitoring of the panels’ performance
•  Many, many other examples abound – 80% of the electricity meters in the EU are mandated to be smart meters by 2020, in healthcare, wellness tracking and virtual care solutions are predicted to reach 60m homes & 74m users by 2019, while smart cities are rolling out smart parking, smart lighting and traffic management solutions

As you can see the Industrial Internet of Things (often termed IIoT) is booming, driven by large cost savings, accompanied by deep data insights, and very often reduced carbon emissions.

In the residential sector though, the story is quite different.

There are now Internet of Things connected doorbells, thermostats, lights, televisions, coffee makers, watches, baby monitors, security cameras, lawn sprinklers, refrigerators, even hearing aids.

But the smart home Internet of Things is not yet living up to the hype. The Google Nest, for example only sold 1.3m devices in 2015. All these Things are supposed to offer more convenience, so why aren’t they flying off the shelves?

Two reasons:

1. Cost – Internet connected things for the home are not cheap. In an industrial setting, adding $1,000 worth of sensors to a wind turbine (for example) is a no-brainer if that wind turbine costs $10m, and the sensors are going to make it more efficient at producing energy, and reduce the chances of its failure, whereas if you are a homeowner, it is very hard to justify paying €200 for 3 internet connected Lightbulbs when a regular Philips LED bulb retails for €6!
   
2. Lack of convenience – this may sound like a strange one given I said that the Internet of Things was supposed to add to your convenience. Unfortunately the opposite is often true. Each of the IoT items I listed above has its own app, which you need to download, setup, create an account on, and then open up, every time you want to use/control your Thing. We are starting to see some over-arching platforms now which are supposed to help us control all our devices (HomeKit from Apple, SmartThings from Samsung, and Thread from Google), but, if anything are adding to the confusion.

We have Philips Hue, and Lifx LED bulbs in my home, along with Belkin WeMo Switches. The bulbs are now turned on and off at the wall, because it is easier than using an app, and so could just as easily be ‘dumb’ bulbs, and the Belkin WeMo switches failed shortly after getting them (they no longer can connect to the wifi network), so they are taking up space now at the bottom of a drawer somewhere.

Is the residential Internet of Things doomed?

Not at all. If the technology world has taught us anything it is that devices get better and cheaper as time goes by. Just compare the first iPhone to an iPhone 6 to see what I’m talking about.

So, in time, the cost of making connected bulbs will be so low that all bulbs will be connected by default. Ditto coffee machines, refrigerators, etc. Whether we choose to make use of devices ‘smarts’ will depend then very much on how the standards war works out.

The transition will take longer as well because, while we typically change phones every 1-2 years, Our home appliances (doorbells, refrigerators, even LED lightbulbs) tend to have a life more typically of 10-20 years.

So, the residential Internet of Things, as long as it remains expensive, lacks the type of economic imperative which the IIoT has, and doesn’t have a dominant, open standard, will proceed slowly. It will be 5-10 years at the very least, before homes are truly ‘smart’. And even then, a lot of the growth in this sector will likely come from devices subsidised by utilities (such as British Gas’ Hive product range), for energy efficiency programs, or the provision of services.

In the meantime, the Industrial Internet of Things will boom. Justifying the hype, changing enormously how businesses operate, and demonstrating that this is no passing fad.