I do a lot of my shopping online, so I pay close attention to product reviews. There is one on Amazon (AMZN) that has become somewhat legendary. It was a review of a Wi-Fi thermostat, and while I have no idea if it is real or fake, it’s an entertaining read. The headline is:
She Took the House, the Dog and the 401(k) But I Still Control the Thermostat
It was posted nearly four years ago, and according to the reviewer (“The General”), his ex-wife got some big things in their divorce, including the house. However, she didn’t change any passwords, allowing him to continue to access the wireless network – and the thermostat. He goes on to say:
Since this past Ohio winter has been so cold I’ve been messing with the temp while the new love birds are sleeping. Doesn’t everyone want to wake up at 7 AM to a 40 degree house? When they are away on the weekend getaways, I crank the heat up to 80 degrees and back down to 40 degrees before they arrive home. I can only imagine what their electricity bills will be.
Clearly he had the password at one point in time, so this doesn’t qualify as a master hack job. But aside from being a funny story, it does bring up a couple of important trends:
- Our world is growing ever more connected.
- Everything that is connected is vulnerable to being hacked.
More Devices, More Connections
Connectivity is all the rage in the world of investing. The future of technology is all about connecting devices to enhance user experience, and one of the most exciting sectors in the world of connectivity is the Internet of Things (IoT).
Each day the world becomes more connected. At first it was our cell phones, which allowed us to get in contact with someone on the other side of the world within seconds. But now it’s expanded to include so much more. We can close our garage door from our phone if we left in a hurry and forgot. We can turn off lights and program our thermostats. Our dryers can text us when the clothes are done and refrigerators can tell us when we’re low on milk.
It’s not just consumer products. The Internet of Things has found its way into the workplace as well. Nearly every industry has the ability to use IoT to improve production and reduce costs. And according to research firm Gartner, over half of all new business processes will contain devices connected to the internet.
The biggest industry within the IoT space has to do with automobiles. We already have cars with online capabilities, and by 2020 there are expected to be 250 million vehicles connected to the internet. Right now, it’s more cars collecting, sharing and using data, but the eventual endgame is autonomous vehicles – cars that drive themselves.
As amazing as all of this is even now, we are still in the early stages of this trend. The estimates are that there will be at least seven connected devices for every human being on Earth by 2020. That is over 50 billion devices connected to the internet within two years.
The Essential Need for Security
That also means there will be 50 billion hackable devices.
Quite simply, the rate at which the world is becoming connected is growing faster than we can secure it.
From garage door openers to self-driving cars to medical devices that are monitored by wireless signals, the possibilities range from nuisance to life-threatening. In fact, doctors disabled remote monitoring of Vice President Dick Cheney’s heart monitor precisely because they thought it was vulnerable to a hacker who might try to do him harm.
The potential of a cyber hack is the biggest threat to all companies around the world today. The nearly one trillion dollars spent on new IoT hardware only increases the entry points for hackers. Companies will not and are not taking this threat lightly, and spending will only increase in the decade ahead. Cybersecurity Ventures has predicted that cybercrime will cost the world $6 trillion annually by 2021 – double the amount from 2015.
New problems require new and innovative solutions, and there will be a lot of great investment opportunities in both the exploding Internet of Things trend as well as the means to secure these billions of devices. It’s just the kind of theme I look for, and I expect big payoffs.
Note: I’m putting the finishing touches now on my full report on the Internet of Things and cybersecurity in the new Early Stage Investor Monthly Issue. Click here to learn how you can join risk-free to be among the first to read the full report and discover the little-known company I’m recommending that is in great position to profit.