INSIGHT: Why the Internet of Things will dwarf Big Data

"This “ah ha”, that IoT will dwarf big data, is slowly forming in my mind."

I don’t think the idea is perfect: I am sure there are examples that imply everything is dependent on everything else.

But examples like the solid-state electronics, ERP, Business Intelligence, and Big Data stand out. IoT is just another example.

So what about “technology’s” role in growth and productivity? Is “technology” just one thing or does hardware and software differ in its impact? How does software really evolve and support innovation?

There is much published on the finding that US productivity improvements peaked some years ago and has started to stagnate or fall. Only a couple of years ago there were alarming reports in the US and UK about how productivity seems to be flat or falling.

This is a major issue for us all since it is only through productivity improvements that our collective standard of living will improve.

The introduction of computers to the workplace helped; ERP helped a lot; the Internet helped a lot. But what now? Has IT spent its lot – and are we now in a phase of only incremental improvement at best? I have been trying to find the answers in the data.

The problem is that the data collected and produced by the US Department of Labor and Statistics is not that helpful.

And they recently re-classified some of their understanding of software and hardware that makes looking for what I am looking for even harder to find. I think they did what they did due to the fact that they do not fully understand IT and specifically how software-based innovation permeates an industry.

Software is very different to hardware. Some innovations act as platforms that do not offer up improvements in the data until much later.

My concern is that I am looking for the next big thing — the next big platform that could, in a few years, push the US (and other) economies into high gear through significantly improved information and technology based productivity.

So here we are in 2015 and here I am looking at big data and IOT. Big data seems too narrowly focused, and though its technology is spinning off new tools and solutions, how they are being used is just too focused.

Then we have IOT. IOT represents both the idea that more than customers leave behind digital footprints (devices, wherever they are, do) and we need the same, if not more, analysis capability.

And IOT also couples together the idea that by instrumenting everything, the very process themselves may change – completely reinventing what it was that was being instrumented in the first place.

So in my mind (and using the language of my idea) big data has a low to medium innovation platform coefficient and IOT has a very large innovation platform coefficient.

I believe that big data will continue to burn bright for a little while longer, and create a few, new spin-off ideas and tools. Big data will help with some information and technology based productivity improvement, mostly customer facing.

But it will be IOT that will dwarf and consume big data and then burn long into our collective future. IOT will be a major platform for all – more than ERP, more then Business Intelligence, more than big data, more than CRM.

IOT could be the one (think Neo) as in the primary IT innovation that creates the next big step change in productivity that we so urgently need.

By Andrew White - Research analyst, Gartner

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