Internet of Things Shows Promise and Peril

By Pedro Hernandez | Posted May 21, 2014

Small businesses are bullish on the Internet of Things (IoT), the biggest new trend in IT. What is IoT (we hear you cry)? Webopedia defines it as an "ever-growing network of physical objects that feature an IP address for Internet connectivity, and the communication that occurs between these objects and other Internet-enabled devices and systems."

The IoT leverages a range of devices with embedded technology—think smart appliances, thermostats, cameras, vehicles and the like—to interact with the real world. These devices communicate over the Internet at large, setting the stage for a broad ecosystem of interconnected, smart device-driven services.

The Internet of Things and Small Business

A new study conducted by Vanson Bourne on behalf of data security specialist AVG Technologies revealed that 82 percent of American small business owners believe that IoT will deliver new opportunities for their companies. Vanson Bourne surveyed 2,000 small business IT professionals across the U.K., U.S., Canada and Australia.

The IoT will help deliver improved customer service, said 56 percent of respondents. Fifty-one percent expect IoT to improve profit margins.

A full 69 percent of those polled said that IoT will help make them more productive. Sixty-six percent said that they expect to benefit from faster access to more data while, 65 percent bank on increased access to data. A third of small businesses expect to adopt IoT-enabled tech within two years.

It's not hard to see why small businesses are enthusiastic about IoT, said AVG's Luke Walling, the company's North American vice president of sales and operations. IoT will finally bring enterprise-grade automation along with advanced, sophisticated IT capabilities within the reach of small businesses.

"I see the benefits of big business coming downstream to SMBs through the Internet of Things," Walling told Small Business Computing. IoT promises to lift a huge burden, like supervising inventory, from overworked entrepreneurs. "The technology does the management," he said.

Innovators and technology vendors envision that IoT, fueled by data from connected smart devices and sensors, and combined with automation provided by back-end systems and cloud services, can open up new world business opportunities and efficiencies.

For example, shops can repair or replace their equipment before it goes up in a puff of smoke. As early warning signs begin to crop up, sensors will alert the maintenance staff—saving them costly repairs and downtime. Noticing that a shopper keeps lingering in a non-committal manner around a product, a brick-and-mortar retailer can issue an on-the-spot discount, scoring a sale and leveling the playing field with online stores.

Risk and The Internet of Things

Those are just a few ways that IoT can help businesses operate better. Yet, as with every new game-changing IT trend, it harbors a dark side. Among the small business IT professionals polled, 54 percent said that IoT will leave them more susceptible to security breaches and hacks, due in part to a bigger device mix.

Walling described IoT in its current state as "boundless, but also standardless." Needless to say, without industry-supported frameworks, small business IT pros are wary of deploying sensors or any other devices that may open their network doors to hackers.

Small businesses have also been burned before. Explaining why some IT pros are leery about IoT, Walling said "it comes from history." Like the bring-your-own-device (BYOD) trend before it, IoT will introduce new devices that users may configure incorrectly, potentially poking holes in an organization's network security.

Security concerns aside, 44 percent of the study's respondents worried that cost would stand as barrier to implementing IoT tech. Thirty-four percent said that IoT would add complexity to their data backup strategies.

AVG's data also revealed that the IT industry has to do a better job of communicating what IoT means to small businesses. Fewer than 60 percent of respondents knew that IoT essentially means a network of connected smart devices that communicate with each other.

There are also some strange IoT misconceptions floating around, added Walling. "Fifteen percent thought it was a re-branding of Big Data," he said. "Eight percent of U.S. small businesses mistook it for a type of email system."

Pedro Hernandez is a contributing editor at Small Business Computing. Follow him on Twitter @ecoINSITE.

Do you have a comment or question about this article or other small business topics in general? Speak out in the SmallBusinessComputing.com Forums. Join the discussion today!

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