Waging War within the IoT

Truth be told the Internet of Things (IoT) has a dirty little secret that it’s hiding from the world. Under the cloak of darkness, there is a clandestine war brewing between IoT’s heavyweights: The consumer smart home and commercial smart buildings. Who will reign supreme?

In today’s post, we’re going to endeavor to find out. We’ll take a deeper look at the specific characteristics that make up a consumer smart home and industrial smart building, while also reviewing how each market segment impacts businesses and consumers alike.

Let’s dive in.

Consumer IoT

So before we can jump into the connected home, let’s first take a look at consumer IoT as a whole. The consumer Internet of Things – as the Computer Business Review (CBR) defines it – … “is the Internet of Things that relates to connected devices aimed at the consumer market.” OK, that’s sort of helpful. Let’s expand a bit more to provide a fuller picture of what we mean by consumer IoT.

Let’s first think about the Internet of Things in general terms – the billions of connected devices that will merge our digital and physical worlds. As the CBR puts it, consumer IoT includes the connected devices geared toward the consumer. So what do they mean, specifically? Well, consumer IoT includes the Fitbit-like wearables, “smart” coffee makers, widgets and gadgets that we’d pick up at Best Buy or on Amazon for personal convince. It is within this consumer-driven world that a smart home lives.

The Smart Home

The smart home is coming to a neighborhood near you. Maybe even your own home. Don’t think so? You might be surprised at just how connected our homes already are. What is a smart home, exactly? According to CNET, a smart home is:

A home that is equipped with network-connected products (i.e. “smart products,” connected via Wi-Fi, Bluetooth or similar products) for controlling, automating, optimizing functions such as temperature, lighting, security or entertainment, either remotely by a phone, tablet, computer, or a separate system within the home itself.”

If you have recently installed a Nest thermostat or purchased the surprisingly not so smart Amazon Alexa, your home has already entered the smart home world. Congratulations, you’re an early adopter! You’re now part of what some analysts are predicting to be a smart home market value of $21 billion by 2020.

How does this smart home market prediction compare to that of industrial smart buildings?

Industrial IoT

The Industrial Internet of Things (IIoT), or the Industrial Internet as General Electric likes to call it, is the digitization of our physical world through harnessing sensor data, machine-to-machine learning, and big data analytics. Using these three pillars the Industrial Internet of Things is slated to make offices, warehouses, manufacturing lines, and industrial plants smarter and more efficient.

Commercial Smart Buildings

Slated to morph into a $25 billion market by 2021, commercial smart buildings are certainly on the rise. I’ve said it before and I’ll say it again it’s not just us saying this: the like of Cisco, GE, IBM, they’re all touting the Industrial Internet of Things.

So, what makes a commercial smart building smart? Let’s find out.

Whether it is a manufacturing line, commercial warehouse, or corporate office building, there are three main components to a commercial smart building. The first is sensor implementation. With the rapid drop in sensor price organizations now have the capacity to place data gathering sensors throughout their entire building infrastructure (think, lighting, machines, HVAC systems, etc.). The second smart building component is data storage, and the third is data analytics. If you’re collecting trillions of bytes of data from a building’s infrastructure (vis-à-vis your thousands of newly installed sensors) you’ll need a place to store and analyze it. These are the components that are the foundation of any commercial smart building.

So who’s slated to win this battle royal between smart homes and commercial smart buildings?

Smart Buildings vs. Smart Homes: Who Wins?

If we are to only take the predicted market value of these two markets (smart homes at $21 billion and industrial smart buildings at $25 billion) it certainly seems that industrial smart buildings are favored to win the war.

The sheer number of U.S. households is a whopping 125 million versus a measly 5.6 million commercial buildings, according to the U.S. Energy Information Administration (EIA). While commercial buildings pale in comparison, the EIA pegs that commercial energy use represents over 53% of total US. energy usage. Therefore, the energy savings potential alone could very well sway the pendulum.

Driving the mass-market adoption of 125 million homes is a tall order. Especially when compared to the total commercial building market.  As more businesses make the move to smarter building operations free market competition soon follows. Thus, driving the greater adoption among business in an effort to gain a competitive edge.

Time will only tell how the smart home vs. smart commercial building war will play out. I certainly have my money on commercial smart buildings. And not just because I live and breath this world daily. In my humble opinion, the combining forces of higher operational investment capacity and free market competition mechanics will foster the rapid adoption of commercial smart buildings over smart homes.

Bottom-line, the next five years will reveal whether smarter commercial buildings will, in fact, lead the charge of IoT adoption.