The Internet of Things, or IoT, is the latest technology megatrend to watch. It is simply the global network of physical objects with embedded technology that sense and communicate their internal states to external environments.

These Connected Devices range from the more mature industrial connectivity of service system sensors set to report a fault, to the more advanced sensors that track your movement in a retail environment to see what displays catch your time and attention. Even more personal are the emerging smart devices you can wear for exercising that track and report your body’s physical performance and workout statistics to outside systems and even your doctor.

The Internet of Things is predicted to grow to 26 billion units in 2020, an almost 30-fold increase over 10 years. Product and service suppliers to this segment will generate revenue exceeding $300 billion by 2020.

New business models are popping up quickly. You'll see embedded technology in your car that will report your real-time driving patterns and behavior to your insurance company to help set your rates and, as you drive by, farm fields with in-ground technology that transmits water and soil conditions along the supply chain to ensure the crop yields are maximized.

The opportunity for emerging software companies in IoT is big.  IoT encompasses not only the hardware (the Things themselves), but all the embedded software, communications services, information services and platforms associated with the Things.

PTC paid 11X sales in late December 2013 for ThingWorx, an IoT platform for building and running applications. In 2014, watch for companies like Cisco and others looking to dominate the IoT hardware space, pick up companies that have created major IoT software or platform innovations.