After Cloud and Big Data, a new buzzword has arrived on the scene: Internet of Things. Self-driving cars, connected tennis rackets, and connected refrigerators—everything connected. Analysts and companies such as Cisco and Intel predict that 20-40 billion of devices will be connected to the Internet by 2020.

Recently, my colleague Dan Murariu offered his vision on the Internet of Things, seeing it as a great business opportunity that will change the way we live. But before we get to that point, there are a couple of challenges the IoT has to overcome before it becomes the disruptive technological advancement so many are predicting it will be.

1) IPv6 adoption

Billions of new IP addresses need to be supplied to billions of devices. Although the industry is aware that we run will out of IPv4 addresses soon, we have seen that IPv6 adoption is not growing as fast as needed. We have even seen a decline in IPv6 traffic at the AMS-IX last year.

2) Data storage investments

With all the billions of devices coming online, more and more data needs to be stored. To facilitate all of this data storage, new and bigger data centers need to be built in the coming years. Cisco is expecting that by 2018 we will see 120MW data centers in Europe and the U.S. Very large investments need to be made to build these data centers and big data farms.

3) Security management

While the number of connected devices is growing, the Internet of Things will collect and store more and more personal information. All this data is attractive for hackers and we will see more security breaches in the future. Analysts already warned that most new gadgets lack the most basic protection against hackers. Symantec already discovered a worm that appears to target the IoT. Managing all these connected devices will become a full-time job unless vendors come up with smart solutions. People already forget to update their computers regularly and have problems with their home networks. Imagine what you will have to do when you have tens of devices on your home network, which you have to update frequently.

4) Privacy concerns

In the recent years, we have seen a growing interest in our personal information. With the recent hacks and NSA revelations, people are becoming more and more concerned with their privacy. These concerns will have an impact on where and how personal information is stored. We already see that legislation is being prepared to have personal data stored only in Russia, while Europe is resisting more and more against the grasping of personal data of its citizens by the United States. International alignment on privacy rules is needed to enable the development of the Internet of Things. Without this alignment, companies might need to choose their markets and not be able to provide the same services all around the world. Organizations like Google, Facebook, and Twitter might place your personal data in Russia. However, are smaller companies also willing to invest in Russia or another country with the same sort of legislation?

5) Consumer needs

The biggest question nobody can answer is do we really want all these connected devices? Do we want to buy new TV’s, refrigerators, and cars because they are connected? Most products have life-cycles of many years and consumers are not going to replace them just because of the IoT. I am not going to replace my refrigerator for a long time as it is doing what it should (keeping my beer cold). I like driving my car and don’t need a self-driving car. Do you really need a connected tennis racket to improve your game or will it take the fun out of it!

In my opinion, the Internet of Things is being hyped at this moment by companies who are designing equipment for it. In the future, we will see more and differently connected devices, but I highly doubt it will go as fast as some would like us to believe.