The Internet of Things has reached peak buzz. Gartner placed IoT at the very pinnacle of its 2014 Hype Cycle for emerging technologies, and it’s little wonder why.

For years now, technology executives, “thought leaders” and especially marketers have loved to talk about the seemingly futuristic concept of a global nervous system of networked, intelligent sensors. The implications of 28 billion devices being linked to the Internet by 2020 is a common thread neatly woven into other hot topics like wearable technologies, cloud, big data, smart homes and smart cities. It makes great fodder for cool YouTube videos and infographics.

Beyond the buzz

But it would be shortsighted to dismiss IoT as “just” hype. Equating IoT to the idea of Internet-enabled refrigerators is like saying Twitter is only used to post 140 characters about your lunch. IT research firm IDC estimates that as of 2013, the global IoT market already stood at about $1.9 trillion (U.S.), and predicts it will grow to $7.1 trillion by 2020.

Here is what you need to know so you can move past the hype, push through the Trough of Disillusionment that will surely follow, and come out the other side better prepared for the Internet of Things.

New technological infrastructure

IoT will merge the physical and virtual, and that requires a new layer of technological infrastructure built at a massive scale. The cost of sensors, processing power and bandwidth to connect devices has plummeted to a point where this is possible.

But the huge number of devices, machines, sensors collecting and streaming data is only the start. That data needs to be gathered and stored somewhere, and then put into a context for integration, analysis and reporting, and ultimately presented in a form that it can be understood and used.

Generating such massive amounts of data to be analyzed in real-time will increase pressures on data centers. Earlier this year, Gartner published analysis about how IoT will transform data centers, estimating that by 2020, “IoT product and service suppliers will generate incremental revenue exceeding $300 billion, mostly in services,” according to a release. But Gartner also highlighted several key areas of challenges for data centers, including:

• Security
• IT availability requirements
• Real-time business processes
• Storage capacity and management
• Server technologies
• Data center networks (WAN links might not cut it for massive amounts of small message sensor data)

For vendors and IT professionals alike, IoT will significantly raise the stakes across all of these fronts. It’s worth contemplating just how businesses will find ways to harvest and use IoT data in a cost-effective, secure manner.

A new industrial revolution?

It’s easy to see the opportunities for new consumer products and services that IoT could bring, starting with the health monitors and Google Glass that are already available. Specialized Internet-connected devices within homes, cars and public urban infastructure are also most commonly used as examples for the potential of IoT.

But IoT will likely impact industrial sectors as well. As Simona Jankowski, a senior equity research analyst with Goldman, Sachs & Co. recently wrote on HBR.org, “…the IoT represents a structural change akin to the industrial revolution. Equipment is becoming more digitized and more connected, establishing networks between machines, humans, and the Internet and creating new ecosystems.”

According to Goldman Sachs, the Industrial IoT could be a $2 trillion (U.S.) market within five years, and it will impact a wide range of sectors, including transportation, health care, and oil and gas. But the analyst specifically highlights three — building automation, manufacturing and resources — because factories and industrial facilities will be able to use IoT for energy efficiency, remote monitoring and control of physical assets.

Brace for another new Internet

Technology vendors of all shapes and stripes will continue to prosthelytize about the Internet of Things, and indeed it could have profound implications for business, consumers and society. Organizations and business models will need to adapt.

But as some of the pieces begin to fall in place, the real work now begins: picking through the hype to find the best uses and then actually making it work.

Photo: IBMSocialMedia YouTube video