The Internet of Things (IoT) – whereby everything from air conditioners to automated cars, and security cameras to sprinkler systems are connected to the web and controlled via mobile devices from afar – isn’t a thing of the future.

It’s here.

About 6.4 billion devices are hooked up to the Internet, according to a 2015 study by Gartner. By 2020, that number is expected to climb to 20.8 billion, while total spending on IoT services will reach an estimated US$263 billion. And while exact figures can be disputed, no one doubts the market will be huge.

Such connectivity is already improving lives and businesses. For instance, a family in Lewisburg, Indiana controls their farm vehicles and irrigation system using a central digital platform, boosting the yield from soy and cornfields. Cities like Copenhagen, Denmark have installed smart street lighting that conserves energy and improves safety based on factors like the time of night and natural illumination from the moon.

IoT will help perform many functions more efficiently, based on user preferences, location and other metrics. It won’t just save time and money, or provide convenience. IoT will help boost production of entire economies, save lives by freeing up and redistributing critical resources more efficiently, and help preserve the environment through carbon and waste reduction.

Service provider pioneers

Service providers are poised to play a big role in this emerging market thanks to at least two main competitive advantages:

First, they provide basic radio connectivity through which devices transmit and receive information; they are the glue that creates smart environments.

Second, they’re already deeply embedded in homes and businesses. Since service providers oversee huge customer networks and manage large quantities of data, they are well placed to expand their advantage to develop, introduce and integrate IoT services.

It won’t be an easy task, however. Service providers will have to address challenges unique to the IoT world it they are to offer frameworks for managing smart environments.

For instance, data will be more difficult to handle. As more devices come online, the flow of information will grow exponentially. Service providers will therefore have to manage, store and integrate information across large disparate systems.

At the same time, service providers are increasingly challenged by over-the-top providers (OTTs) entering this growing domain. IoT-enabled products like Google’s Home and Amazon’s Echo firmly establish both companies in this new market. More are sure to follow. If service providers do not leverage their competitive advantages now, they are likely to cede ground to OTTs.

Then there’s security. As illustrated by the large cyber-attacks that took place in October 2016, a world of connected devices can also cause disruption. During this incident, hackers used internet-connected devices including printers, cameras and residential gateways to overwhelm servers, slow down the internet and temporarily shut down access to websites.

StarHub, a Singapore-based service provider servicing 470,000 broadband residential subscribers, was among those affected by malware, according to the Financial Times. Explaining how this was possible, the publication quoted John Ellis of Akami, a cloud service provider, as saying, “Devices were instructed to participate in an attack – which could have been targeted anywhere – and this went through StarHub’s [domain name servers] and overloaded the infrastructure.”

To prevent breaches of this nature, as well as other challenges to privacy, safety and service integrity, service providers must employ advanced predictive and preventative approaches.

For individuals, many concerns will revolve around privacy. Customers will want to feel confident their information won’t be stolen or control of their devices lost. Indeed, customers expect nothing but top-notch protection when choosing a service provider. According to a 2014 study by Deloitte, almost 60% of those asked said a single data breach would negatively impact the likelihood of buying brands from a consumer products company. In the same study, 70% of respondents expressed a preference for doing business with companies that protect their personal information.

Pooling resources

Successfully entering the IoT market requires a multifaceted set of skills and systems. For this reason, many of the world’s biggest service providers and tech companies are pooling their resources to meet the challenge.

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