Does your house have a smart thermostat? Or maybe you’re one of the one in three Americans who wears a fitness tracker to help you stay physically active. If you do, you are tapping into the Internet of Things, or IoT. It’s become embedded in our lives, as well as in the way organizations operate.

IoT uses a variety of technologies to connect the digital and physical worlds. Physical objects can be embedded with sensors and actuators. Sensors monitor things like temperature or motion, or really any change in environment. Actuators receive signals from sensors and then react to the reported changes. Sensors and actuators communicate with computing systems via wired (for example, Ethernet) or wireless (for example, Wi-Fi or cellular) networks; these computers can monitor or manage the health and actions of connected objects and machines.

The constant connectivity that IoT enables, combined with data and analytics, provides new opportunities for companies to innovate products and services, as well as to increase operational efficiency. Indeed, IoT has emerged as one of today’s most significant trends in the digital transformation of business and economies. Challenges abound, particularly when it comes to IoT cybersecurity, but we estimate the total value potential for the IoT ecosystem could reach $12.6 trillion by 2030.