Why M2M + the Internet of Things = $1 trillion

The rate of adoption for machine-to-machine, or M2M, technologies enabling devices of virtually every size and function to share valuable data will be nothing short of mind-boggling over the next seven years — becoming an almost $1 trillion industry by 2020, according to a new report published by the Carbon War Room.

What exactly does that mean? By that timeframe, there will be approximately 12.5 billion devices endowed with sensors that enable them to be controlled, monitored, and automated based on our wishes, according to 2012 data from Machina Research cited in the report. Everything from intelligent, programmable light switches to buildings sensors that keep tabs on ambient climate and operating conditions to sensors that monitor moisture in agriculture fields will communicate with the so-called Internet of Things, as these billions of devices have come to be collectively known.

The potential benefits center squarely on improved efficiency, with particular promise for applications in energy, transportation, agriculture and the built environment.

By the end of the decade, for example, the Carbon War Room report predicts that M2M solutions and related technologies could help reduce greenhouse gas emissions by 9.1 billion metric tons or gigatons (Gt) annually. That's an amount equivalent to the total emissions attributable to the carbon-intensive economies of the United States and India in 2010.

The big reason you should care is this: M2M promise to be instrumental in helping businesses reduce energy and water consumption — without forcing them to constrain growth. That's a position that sits well with Carbon War Room, started by entrepreneur Richard Branson, who advocates the notion that sustainable business practices can yield substantial returns.

"In the past, sustainability often meant privation — a contraction of economic activity, but by optimizing the functions of our ever more complex industrial societies, M2M could represent a solution to the interconnected global challenges of resource scarcity and climate change," write the Carbon War Room report authors. "If we utilize technologies such as M2M to their full potential, 'low carbon' will by synonymous with economic growth and sustainable prosperity, now and into the future."

Next page: Substantial benefits for four sectors