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As with most new technologies, it is the consumer uses of the so-called internet of things that have attracted the most attention. But industrial and other business applications are likely to end up being a far bigger market.

The collapsing price of sensors and the rise of ubiquitous internet connectivity have made it easy to connect machinery and many other objects to the internet — though at the risk of opening up attractive new targets to malicious hackers.

Collecting the data thrown off by all the new connected objects should make it possible to monitor them more closely, optimise their performance and anticipate problems before they occur. It could also support new business ideas such as charging a subscription for hardware based on the amount it is used.

The industrial internet is being assembled out of four different parts, each of which has attracted a wave of investment from start-ups and established companies.

One involves the billions of “things” that will one day be connected to the internet, with companies such as Electric Imp, Particle and Arrayent creating platforms to manage all the end points, says Isaac Brown at Lux Research.

A second focus is on connectivity. Companies including Jasper Technologies, which was bought earlier this year by Cisco Systems for $1.4bn, have stitched together networks for handling the machine-to-machine communications on which the industrial internet will rely.

The third area of investment has been in software platforms that pull together data and act as a development platform for applications, much like operating systems in the computer world.

Some platform companies also sell higher-level services like the analytics to make sense of all the data being collected. This area has seen the most frenzied investment, according to Mr Brown, with hundreds of start-ups — led by companies such as ThingWorx and Uptake — taking on the giants of the IT industry and industrial behemoths such as General Electric.

The final element consists of software applications and services, many of them created for specific industries, or “vertical” markets. Venture capitalists like Tim Porter of Seattle-based Madrona Partners argue that these more specialised markets represent the best opportunity for start-ups. “Some of these ‘verticals’ are huge,” he says.

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