The Internet of Things (IoT) could be the hottest topic at the 2014 International CES in Las Vegas. But even if it dominates the popular consumer electronics show, it still has a long way to go before it becomes a reality.

Still, that hasn't stopped companies like IBM and Cisco from lining up to provide services and technologies to enable its development. In fact, in the recent partnership between IBM and Technicolor, we can see the first signs of IoT development.

Relevant Partnership

IBM and Technicolor announced last week that they were partnering to introduce a cloud-based monitoring and management service for IoT and machine-to-machine (M2M) services, The first joint initiatives will be made public at CES this week.

The most recent IoT-relevant partnership, it points to the development of early specializations in IoT apps and services. The partnership involves the creation of Virdata by Technicolor, whose device and application monitoring and management service features a real time and historical big data analytics stack.

According to a statement from Technicolor, initial industries targeted by Virdata are consumer electronics, automotive, utilities, health, industrial automation and retail. It will also be built on IBM’s SoftLayer cloud capabilities to provide clients with elastic and scalable services.

The key here is that the combined  capabilities of IBM’s SoftLayer cloud — watch for more from SoftLayer in this respect over the coming year — and Virdata are providing services to a specific set of verticals and leaving others to other vendors.

Technicolor has also said Virdata will operate as a pay-as-you-go solution that will provide these IoT services to the consumer electronics market, adding that it will also looking at other opportunities on a worldwide basis as they emerge.

PTC’s ThingWorx Acquisition

Other companies appear to be specializing in early stage IoT development, too. PTC, a Massachusetts provider of manufacturing technology, announced late last month that it is buying ThingWorx, which provides a platform for building and running IoT applications.

For a platform that could put it at the cutting edge of manufacturing IT, PTC paid the relatively paltry sum of $112 million for a new technology that will be able to provide connected products across the manufacturing industry.

In this case, PTC aims to enable the IoT across the telecommunications, utilities, medical devices, agriculture, and transportation verticals, as well as an emerging partner network of IoT-enabled service providers for manufacturing.

According to Jim Heppelmann, CEO of PTC, the company has been watching the development of IoT for some time and has developed a business strategy in response to it that, he says, will give the company an edge over competitors that have yet to develop IoT technologies. He noted:

All aspects of our strategy to date have centered on helping manufacturing companies transform how they create and service smart, connected products…For manufacturers today, it is clear to us that improved service strategies and service delivery is the near-term ‘killer app’ for the Internet of Things and this opportunity has guided our strategy for some time."

Bosch’s In-House Development

Other companies are developing their own IoT presences in-house and have set up specialized units to develop their IoT strategies.

Bosch, best known as a provider of consumer electronics, has set up a specialized company called Bosch Connected Devices and Solutions GmbH (BCDS), to supply compact electronic products and software expertise designed to make devices and objects intelligent and web-enabled.

Initially, it will focus on the development of what it describes as “smart homes” as well as developing technologies for traffic, transportation and logistics, and placing it on a collision course with IBM’s Smart Cities program.

However, Bosch comes with a long pedigree of sensor development and has been developing and building MEMS (Micro-Electro-Mechanical Systems) sensors since the 1980s, currently producing around 1 billion of them every year, according to Bosch’s own figures.

This new company is being set up in Germany with sites in India and China. The sensors developed for the IoT enable them to process measurement data and send it over the Internet to other devices, such as a user’s smartphone.

The Cisco Vision

However, this is only the start and there are many other companies involved in the development of the IoT too. One of the interesting keynotes this week at CES will be the contribution from Cisco’s Chairman and CEO, John Chambers, who will outline its vision of the IoT or the Internet of Everything as it has taken to calling it.

Cisco has a long record in this and has been busy developing some of the services and technologies that will make the IoT a reality in the coming years.

Last September, for example, it announced the release of Smart+Connected City WiFi, an integrated solution to help cities provide connectivity and establish platforms for IoT development.

One of the aspects of the new WiFi services — and one that is likely to become a key issue in the future — is its security features. These promise to assure users security of the data being collected.

According to the Cisco, the solution is built via a three-layer architecture composed of the street layer (outdoor access points), city network layer (which connects hardware to the data center) and data network layer (which provides resources to enable city Wi-Fi applications and services), which makes it more difficult to compromise data.

Measuring IoT

While IoT remains hard to describe and define, no one doubts its size or how pervasive it is likely to become in the coming years.

According to research from Gartner, it will include 26 billion units — excluding PCs, tablets and smartphones — by 2020 and have a global economic value of $1.9 trillion, outstripping growth in the smartphone, tablets, and PCs combined.

That said, business and development strategies are already beginning to emerge, even if those strategies are far from fully developed.

Over the next few days at CES, all the companies is this report, along with many others, will be presenting their ideas and products for the IoT as it is understood at the moment.

However, for all this to become a reality economies of scale are a core prerequisite. Without cheap chips that can be installed into — well into everything — the IoT will just not be possible for economic reasons. What the likes of Bosch, or Cisco have to say about this over the week will be revealing.