The Internet of Things explained: evolutions, possibilities and realities

The Internet of Things: what is it, where does it come from, which technologies are involved and how can you use it?

Among the many phenomena and related technologies that show exponential growth in recent years and (will) result(s) in digital transformation (initiatives) is the Internet of Things, a.k.a. IoT.

It has taken over 15 years for the Internet of Things to become a reality that will impact many areas of business and society. Yet, it will take several more years before it is a daily reality in all possible areas, for numerous reasons.

At the same time, among others driven by new connectivity solutions and the cloud, as well as other 3rd platform technologies, the number of applications concerning the Internet of Things, as well as the number of connected devices, are accelerating. Add to that viable business models, technologies designed to leverage IoT-generated data fast and it’s clear that the Internet of Things is evolving fast and has found fertile ground to be leveraged in valuable ways. It had to wait a bit but now it’s really here.

nternet of Things concept

How it all started and evolved

The idea of the Internet of Things indeed goes back quite some time. In the nineties, technologies such as RFID, sensors and a few wireless innovations led to several applications in the connecting of devices and “things”. Most real-life implementations of RFID in those days happened in logistics, warehouses and the supply chain in general.

However, there were many challenges and hurdles to overcome, as we covered early 2001 in research and a white paper for a Belgian RFID specialist who targeted primarily logistics and retail.

An example of an RFID application - electronic toll collection - Wikipedia by user Gary D
An example of an RFID application – electronic toll collection – Wikipedia by user Gary D

Still, the use of RFID (and along with it, several NFC or “near field communication”, wireless technologies), became popular in areas beyond logistics and supply chain management: from public transport, identification (from pets to people), electronic toll collection (see image), access control and authentication, traffic monitoring, retail to – back then – innovative forms of outdoor advertising. That growing usage was, among others, driven by the decreasing cost of RFID tags, increasing standardization and NFC.

The Internet of Things in context
As such, adding “things” such as sensors and ever more devices in a machine-to-machine context, is meaningless. In a broader context, the Internet of Things is just another – albeit huge – evolution towards a vaster Internet – and also other networks. It’s essential to keep in mind that this Internet and the umbrella of the Internet of Things as such in the end is about connecting people, processes, data and that it’s the information that is put into context that matters. All too often the narrative regarding the internet of Things looks too much at devices, presumably due to the attention that is given to the consumer side of things with wearables and the likes. It’s also important to put the Internet of Things in a broader technology perspective without which it couldn’t be, let alone lead to tangible benefits. Related technologies include artificial intelligence, data (big and others), mobile, the cloud and so on.

From RFID to the Internet of Things

Although RFID strictly speaking has nothing to do with the Internet of Things, the possibility of tagging, tracking, connecting and “reading” objects went hand in hand with what would become known as the Internet of Things around the beginning of this century.

It was obvious that the connection of the types of “things” and applications – as we saw them in RFID – with the Internet would change a lot. It might surprise you but the concepts of connected refrigerators, telling you that you need to buy milk, or the vision of an immersive shopping experience (without bar code scanning and smart real-time information) go back since before the term Internet of Things even existed.

Again, it took a long time. Furthermore, we shouldn’t play the Internet of Things to just these popular and widely known concepts, even if consumer-related attention for the IoT without a doubt has led to the grown attention for it as you’ll read further.

The Internet of Things - infographic The Connectivist based on Cisco data - click for full image
The Internet of Things – infographic The Connectivist based on Cisco dataclick for full image

The exponential growth of IoT

Internet of Things growth in numbers

One thing we can agree on is that the internet of Things still has a long way to go and that growth of connected devices or “intelligent things” will indeed grow exponentially over the coming years.

With that growth, enabled by what Gartner would call a “nexus of forces”, comes growth in many other areas such as traffic, storage, processing capacity, data volumes, you name it.

The exact predictions regarding the exponential growth of the Internet of Things in the broadest context differ but it’s assumed (Gartner) that by 2020 we’ll live in a world with over 26 billion connected devices. Some go even further and predict anything from 37 billion intelligent things connected to the Internet by 2020 (such as Cisco, earlier the company talked about 50 billion, see below) to even over 200 billion. Regardless of the exact numbers, one thing is clear: there is a LOT that can still be connected and it’s safe to assume we’ll probably reach the lower numbers of connected devices (20-35 billion) by 2020.

According to Cisco more than 99 percent of things in the physical world are not connected to the Internet yet – read the full article
According to Cisco more than 99 percent of things in the physical world are not connected to the Internet yet – read the full article
According to the Ericsson Mobility Report 2016, there will be approximately 28 billion connected devices by 2021. The report expects the Internet of Things to surpass mobile phones as the largest category of connected devices with 16 billion connected devices being IoT devices (of the the forecasted total of 28 billion, which include for instance smartphones as we mentioned in our article on mobile and mobility.

IoT devices are about to to surpass mobile phones as the largest category of connected devices - source Ericsson Mobility Report 2016
IoT devices are about to to surpass mobile phones as the largest category of connected devices – source Ericsson Mobility Report 2016

Reasons for the exponential growth of the Internet of Things

So, why this exponential growth of the Internet of Things and, admittedly, equally exponential growth of the attention for it, sometimes feeling like a hype?

Well, first of all IoT today is effectively hyped (yet, at the same time very real). Gartner’s latest Hype cycle for emerging technologies shows that the Internet of Things is at the peak of inflated expectations (while NFC is reaching the slope of enlightenment).

The Internet of Things and NFC in Gartners Hype Cycle for emerging technologies – more on InformationDynamix
The Internet of Things and NFC in Gartners Hype Cycle for emerging technologies

There are numerous reasons for the growing attention for the Internet of Things. While you will often will read about the decreasing costs of storage, processing and material or the third platform with the cloud, big data, smart (mobile) technologies/devices, etc. there certainly is also a societal/people dimension with a strong consumer element (more in the Goldman Sachs infographic below).

Digital ubiquity and the Internet of Everything

The ubiquitous presence of digital technologies and, along with it, ongoing connection of people, information, smart devices, sensors, objects etc. across intelligent networks, various types of clouds and processes is sometimes called the Internet of Everything, a term invented by Cisco, which makes it look even more like a “thing” and it’s not as you’ll read below. Even if we indeed connect ever more “everything”, digital ubiquity in a business context is not about some “open” Internet that encompasses everything. Depending on data regulations, security and privacy issues and the scope of interconnecting sensors, devices, data and “things” in an industrialized context, the reality of über-connected networks is less visible than the consumer-related view but also far more pervasive in the ways we do business.

The Internet of Things isn’t a “thing” indeed. It’s many things, for starters, in the sense of connected things. But it’s also not one big network or a nicely defined set of technologies, devices, sensors, categories or applications. It’s an umbrella for many underlying realities with a lack of standardization, business applications being more important than the consumer-related context (for at least a few more years) and so on. By approaching it as a “thing” we risk losing ourselves in a Babylonian confusion (once again).

Protocols, data impact, standards and changing paradigms: from cloud to fog computing

As so much data is created and increasingly will be created with the Internet of Things, the decentralized ways in which these data are generated need different aproaches, among others in the ways they are transported, processed and analyzed, driving (automated) actions.

One of these approaches is fog computing, a system-level architecture that extends the computing, network and storage capability of the cloud to the edge of the IoT network. This is especially important when a large geographical area is involved, when data needs to be processed extremely fast and data is collected at the extreme edge as Cisco calls it, for instance on oil rigs or in ships.

Fog computing visually explained - source Cisco blog post announcing the launch of the OpenFog Consortium
Fog computing visually explained – source Cisco blog post announcing the launch of the OpenFog Consortium

Fog computing is not the only technological aspect to deal with the reality regarding data, bandwidth, processing and analysis requirements of IoT projects. There are also numerous technologies that are involved, depending on the scope and context of the application, ranging from cellular technologies and home automation standards to satellite connections and machine-to-machine (M2M) technologies in the context of, among others, Low-Power Wide Area Networks.

With the huge challenges and opportunities on the unstructured data front in mind, it’s key to look at the evolutions of these technologies and the evolutions in fog computing.

More about IoT technologies, data impact and solutions

Consumer applications of the Internet of Things

Give and take 5 years ago, consumers rarely saw what the Internet of Things would mean to their private lives. Today, they increasingly do: not just because they are more interested in technology but mainly because all these applications are happening and mentioned on virtually every news outlet and website that covers technology.

Smart is a key concept in the evolution of the Internet of Things – from smart cities to smart social care but also empowered by smart devices and intelligent networks – picture J-P De Clerck – BT Benelux showcase 2014
Smart is a key concept in the evolution of the Internet of Things – from smart cities to smart social care but also empowered by smart devices and intelligent networks – picture J-P De Clerck – BT Benelux showcase 2014

Wearables and smart watches, connected and smart home applications (with Google’s Nest being a popular one but certainly not the first), you know the examples.

Although it is said that there is some technology fatigue appearing, the combination of applications in a consumer context and of technology fascination undoubtedly plays a role in the growing attention for the Internet of Things. That consumer fascination/applications aspect comes on top of all the real-life possibilities as they start getting implemented right now and the contextual and technological realities, making the Internet of Things one of those many pervasive technological umbrella terms, leading to genuine digital transformation opportunities in several areas, digital disruptions and, simply, business opportunities in the broadest sense.

Industries driving the Internet of Things

From the sheer perspective of (number of) devices, IoT is driven by consumer devices. According to a 2015 report by IC Insights (via Datamotion), a research company specializing in the semiconductor market, the increasing popularity of wearable devices and IoT devices is boosting sensor shipments.

However, behind this popularity and the growth of IoT, are several industries with some clearly taking the lead.

Manufacturing

Given the “origins” of the Internet of Things and the most typical (early) use cases, manufacturing (for now) is still taking the lead.

In April 2015, Gartner analyst Jim Tully said that there were 307 million installed units at the time of the Q&A in the manufacturing industry where systems with sensors have always been embedded into manufacturing and the automation processes.

In a May 2015 forecast on the worldwide growth of the Internet of Things market (poised to grow 19% in 2015) IDC forecasts the IoT market in manufacturing operations will reach $98.8 billion in 2018. Drivers: efficiency optimization and “linking islands of automation”.

Utilities

Facing huge challenges and transformations for several reasons, utility firms have 299 million units installed according to Gartner’s Tully.

Among the many typical use cases: smart meters to improve efficiency in energy, from a household perspective (savings, better monitoring etc.) and a utility company perspective (billing, better processes and of course also dealing with natural resources in a more efficient way as they are not endless).

“Smart” is the word of the day in the service economy in which utilities operate.

Retail

Retail is moving up fast, both in operations and customer-facing circumstances as Tully says.

In its mentioned forecast on the worldwide growth of the Internet of Things market, IDC also emphasized retail in an ongoing effort to digitize the consumer experience. Digital signage in retail outlets is in fact the big driver in 2015, IDC found.

Automotive

Connected cars and all the other evolutions in the automotive industry are driving the IoT market as well.

Again, according to the same research by IDC, connected vehicles is the hottest US market in the overall Internet of Things picture. You can see an example of how it can work in a car scenario in the video below.

Other industries (also mentioned by IDC) include healthcare, transportation (where “smart devices” and sensors have existed for quite some time), government (also since quite some time) etc.

Add to that the consumer context of IoT and you know why it is such a hot topic. However, just as was the case with RFID, there are still many challenges ahead, also regarding technology and standards.

The Internet of Things: security challenges

The Internet of Things still is a security nightmare. Both in consumer applications and industrial applications, there are many questions that need to be solved.

In fact, when Accenture looked at the slowing down of the consumer electronics market at the occasion of the Consumer Electronics Show 2016, the company observed that in order to bridge the gap between the current decreasing growth of the consumer electronics market and the next stage of increasing growth, which is expected to be driven by consumer applications in the IoT space and wearables, vendors need to address these security challenges.

The IoT Security Dilemma

Gartner estimates that more than 20% of enterprise security attacks will involve IoT connections by 2020, and threat growth is expected to outstrip security spending (source: Motley Fool SlideShare).

As said, the many security challenges regarding the Internet of Things are not just in the consumer electronics space. In business applications, the security challenges of a hyper-connected Internet of Things reality are at least as high, not to mention the impact on IT infrastructure and data capabilities.

In the IoT sensors communicate with each other and through gateways, connected to an Internet of Things platform, the various applications of the company are fed and triggered. Obviously such a platform needs to be highly secure as do the communications between sensors, gateways and the platform.

In a SlideShare presentation The Motley Fool summarizes some aspects of the Internet of Things Security Dilemma.

They mainly touch upon the impact on networks and information, the protection and funneling of data, the lack of standardization across networks and application programming interfaces (APIs) that inevitably come when devices and software interact and are interconnected and, last but not least, the disconnect between de facto expected security breaches in IoT and the efforts that businesses are doing to tackle with these security challenges.

More in the IoT Security Dilemma presentation below.

The IoT made tangible: video

To make the ways the Internet of Things works and can be used across various areas of business and society here is a video example.

Among the many videos and presentations explaining the IoT is a video from the IBM Think Academy that explains it in a visual way with a practical example.

The Internet of Things is changing much about the world we live in. By way of example, the video mentions the way we drive (think about the autonomous or driverless car but also about smart parking systems and how the IoT can help in solving traffic issues or car diagnostics), the way we purchase (retail is one of the industries where the IoT is being looked at intensively) and how we get/pay energy (smart meters, for instance).

The IBM Think Academy YouTube channel video focuses a lot on how embedded sensors and chips send data that can be used for numerous reasons and then explains various applications where this data can be used. That’s not a surprise as the Internet of Things can’t be separated from big data (analytics) and artificial intelligence and cognitive computing, domains where IBM is highly involved in.

That is also what the Internet of Things is essentially about: how data is used from chips and sensors to drive various business processes, automate them, enable new applications and service customers in entirely new ways, to name a few.

The video gives the example of a car that alerts its driver a ‘check engine’ is needed and then shows how this data is leveraged in various scenarios, making the Internet of Things very tangible in case you are relatively new to what the IoT means and can mean in practice.

Hungry for more? The Think Academy channel has some other nice videos on the IoT and other technologies, explained in a simple and hands-on way.

RFID in the lives of consumers

RFID has come a long way. Even if you don’t know what it means, you “use” it.

Examples? Electronic door locks, many modern credit cards, identification cards with RFID, the list is long.

RFID-blocking fabric - soon in your pants?
RFID-blocking fabric – soon in your pants?

RFID is even used so much that end 2014, security firm Norton and Betabrand designer Steven B. Wheeler joined forces to create the world’s first RFID (and NFC) blocking jeans to avoid theft of data.

 

Below is the promised infographic by Goldman Sachs.

The Internet of Things - what is it and where does it go - infographic by Goldman Sachs
The Internet of Things – what is it and where does it go – infographic by Goldman Sachs

Recent blog posts and articles about the Internet of Things

Below is a selection of recent articles, research and blog post concerning the Internet of Things, its application in, for instance marketing, and the technologies involved.

Internet of Things Connectivity Smart City Concept

Connectivity, networks and edge computing for the Internet of Things data deluge

With the rise of the Internet of Things (IoT) or Internet of Everything if you prefer, there is obviously an avalanche of data being added to the networks and data processing, storage and analysis...

The Internet of Things and the need to tackle IT and OT integration

Back in 2011 Gartner advised (IT) leaders to prepare for the transition of their organizations to the converging, aligning and integrating of IT and OT environments. With the Internet of Things that convergence is happening...

How the Internet of Things impacts marketing

The Internet of Things is affecting virtual all industries, has a tremendous impact on the volume of data and on network traffic (and how we handle them) and is increasingly popular in a consumer...

Being smart about the Internet of Things: from facts to benefits

It's official: IoT (the Internet of Things) has reached the peak of inflated expectations; or the very top of Gartner's hype cycle of emerging technologies. And it's hard to ignore all the buzz regarding...

 

Top image: Shutterstock – Copyright: jamesteohart – All other images are the property of their respective mentioned owners.