What is the IoT

What is the IoT? Everything you need to know about the Internet of Things right now

 What is the Internet of Things?

The Internet of Things, or IoT, refers to the billions of physical devices around the world that are now connected to the internet, all collecting and sharing data. Thanks to the arrival of super-cheap computer chips and the ubiquity of wireless networks, it's possible to turn anything, from something as small as a pill to something as big as an aeroplane, into a part of the IoT. Connecting up all these different objects and adding sensors to them adds a level of digital intelligence to devices that would be otherwise dumb, enabling them to communicate real-time data without involving a human being. The Internet of Things is making the fabric of the world around us more smarter and more responsive, merging the digital and physical universes.

What is the history of the Internet of Things?

The idea of adding sensors and intelligence to basic objects was discussed throughout the 1980s and 1990s (and there are arguably some much earlier ancestors), but apart from some early projects -- including an internet-connected vending machine -- progress was slow simply because the technology wasn't ready. Chips were too big and bulky and there was no way for objects to communicate effectively.

Processors that were cheap and power-frugal enough to be all but disposable were needed before it finally became cost-effective to connect up billions of devices. The adoption of RFID tags -- low-power chips that can communicate wirelessly -- solved some of this issue, along with the increasing availability of broadband internet and cellular and wireless networking. The adoption of IPv6 -- which, among other things, should provide enough IP addresses for every device the world (or indeed this galaxy) is ever likely to need -- was also a necessary step for the IoT to scale. 

Kevin Ashton coined the phrase 'Internet of Things' in 1999, although it took at least another decade for the technology to catch up with the vision.

"The IoT integrates the interconnectedness of human culture -- our 'things' -- with the interconnectedness of our digital information system -- 'the internet.' That's the IoT," Ashton told ZDNet.

Adding RFID tags to expensive pieces of equipment to help track their location was one of the first IoT applications. But since then, the cost of adding sensors and an internet connection to objects has continued to fall, and experts predict that this basic functionality could one day cost as little as 10 cents, making it possible to connect nearly everything to the internet.

The IoT was initially most interesting to business and manufacturing, where its application is sometimes known as machine-to-machine (M2M), but the emphasis is now on filling our homes and offices with smart devices, transforming it into something that's relevant to almost everyone. Early suggestions for internet-connected devices included 'blogjects' (objects that blog and record data about themselves to the internet), ubiquitous computing (or 'ubicomp'), invisible computing, and pervasive computing. However, it was Internet of Things and IoT that stuck.

How big is the Internet of Things?

Big and getting bigger -- there are already more connected things than people in the world.

Tech analyst company IDC predicts that in total there will be 41.6 billion connected IoT devices by 2025, or "things." It also suggests industrial and automotive equipment represent the largest opportunity of connected "things,", but it also sees strong adoption of smart home and wearable devices in the near term.  

Another tech analyst, Gartner, predicts that the enterprise and automotive sectors will account for 5.8 billion devices this year, up almost a quarter on 2019. Utilities will be the highest user of IoT, thanks to the continuing rollout of smart meters. Security devices, in the form of intruder detection and web cameras will be the second biggest use of IoT devices. Building automation – like connected lighting – will be the fastest growing sector, followed by automotive (connected cars) and healthcare (monitoring of chronic conditions). 

Image: Gartner

What are the benefits of the Internet of Things for business?

The benefits of the IoT for business depend on the particular implementation; agility and efficiency are usually top considerations. The idea is that enterprises should have access to more data about their own products and their own internal systems, and a greater ability to make changes as a result.

Manufacturers are adding sensors to the components of their products so that they can transmit data back about how they are performing. This can help companies spot when a component is likely to fail and to swap it out before it causes damage. Companies can also use the data generated by these sensors to make their systems and their supply chains more efficient, because they will have much more accurate data about what's really going on

"With the introduction of comprehensive, real-time data collection and analysis, production systems can become dramatically more responsive," say consultants McKinsey.

Enterprise use of the IoT can be divided into two segments: industry-specific offerings like sensors in a generating plant or real-time location devices for healthcare; and IoT devices that can be used in all industries, like smart air conditioning or security systems.

While industry-specific products will make the early running, by 2020 Gartner predicts that cross-industry devices will reach 4.4 billion units, while vertical-specific devices will amount to 3.2 billion units. Consumers purchase more devices, but businesses spend more: the analyst group said that while consumer spending on IoT devices was around $725bn last year, businesses spending on IoT hit $964bn. By 2020, business and consumer spending on IoT hardware will hit nearly $3tn.

Image: IDC

Worldwide spending on the IoT was forecast to reach $745 billion in 2019, an increase of 15.4% over the $646 billion spent in 2018, according to IDC, and pass the $1 trillion mark in 2022.

Top industries for the IoT were predicted to be discrete manufacturing ($119 billion in spending), process manufacturing ($78 billion), transportation ($71 billion), and utilities ($61 billion). For manufacturers, projects to support asset management will be key; in transportation it will be freight monitoring and fleet management taking top priority. IoT spending in the utilities industry will be dominated by smart-grid projects for electricity, gas, and water.

Consumer IoT spending was predicted to hit $108 billion, making it the second largest industry segment: smart home, personal wellness, and connected vehicle infotainment will see much of the spending.

By use case, manufacturing operations ($100 billion), production asset management ($44.2 billion), smart home ($44.1 billion), and freight monitoring ($41.7 billion) will be the largest areas of investment. 

What is the Industrial Internet of Things?

The Industrial Internet of Things (IIoT) or the fourth industrial revolution or Industry 4.0 are all names given to the use of IoT technology in a business setting. The concept is the same as for the consumer IoT devices in the home, but in this case the aim is to use a combination of sensors, wireless networks, big data, AI and analytics to measure and optimise industrial processes. 

If introduced across an entire supply chain, rather than just individual companies, the impact could be even greater with just-in-time delivery of materials and the management of production from start to finish. Increasing workforce productivity or cost savings are two potential aims, but the IIoT can also create new revenue streams for businesses; rather than just selling a standalone product – for example, like an engine – manufacturers can also sell predictive maintenance of the engine. 

What are the benefits of the Internet of Things for consumers?

The IoT promises to make our environment -- our homes and offices and vehicles -- smarter, more measurable, and... chattier. Smart speakers like Amazon's Echo and Google Home make it easier to play music, set timers, or get information. Home security systems make it easier to monitor what's going on inside and outside, or to see and talk to visitors. Meanwhile, smart thermostats can help us heat our homes before we arrive back, and smart lightbulbs can make it look like we're home even when we're out.

Looking beyond the home, sensors can help us to understand how noisy or polluted our environment might be. Self-driving cars and smart cities could change how we build and manage our public spaces.

However, many of these innovations could have major implications for our personal privacy.

The Internet of Things and smart homes

The House that Alexa Built: An Amazon showcase in London in 2017.

Image: Steve Ranger/ZDNet

For consumers, the smart home is probably where they are likely to come into contact with internet-enabled things, and it's one area where the big tech companies (in particular Amazon, Google, and Apple) are competing hard.

The most obvious of these are smart speakers like Amazon's Echo, but there are also smart plugs, lightbulbs, cameras, thermostats, and the much-mocked smart fridge. But as well as showing off your enthusiasm for shiny new gadgets, there's a more serious side to smart home applications. They may be able to help keep older people independent and in their own homes longer by making it easier for family and carers to communicate with them and monitor how they are getting on. A better understanding of how our homes operate, and the ability to tweak those settings, could help save energy -- by cutting heating costs, for example.

What about Internet of Things security?

Security is one the biggest issues with the IoT. These sensors are collecting in many cases extremely sensitive data -- what you say and do in your own home, for example. Keeping that secure is vital to consumer trust, but so far the IoT's security track record has been extremely poor. Too many IoT devices give little thought to the basics of security, like encrypting data in transit and at rest.

Flaws in software -- even old and well-used code -- are discovered on a regular basis, but many IoT devices lack the capability to be patched, which means they are permanently at risk. Hackers are now actively targeting IoT devices such as routers and webcams because their inherent lack of security makes them easy to compromise and roll up into giant botnets.

Flaws have left smart home devices like refrigerators, ovens, and dishwashers open to hackers. Researchers found 100,000 webcams that could be hacked with ease, while some internet-connected smartwatches for children have been found to contain security vulnerabilities that allow hackers to track the wearer's location, eavesdrop on conversations, or even communicate with the user.

Governments are growing worried about the risks here. The UK government has published its own guidelines around the security of consumer IoT devices. It expects devices to have unique passwords, that companies will provide a public point of contact so anyone can report a vulnerability (and that these will be acted on), and that manufacturers will explicitly state how long0 devices will get security updates. It's a modest list, but a start. 

When the cost of making smart objects becomes negligible, these problems will only become more widespread and intractable.

All of this applies in business as well, but the stakes are even higher. Connecting industrial machinery to IoT networks increases the potential risk of hackers discovering and attacking these devices. Industrial espionage or a destructive attack on critical infrastructure are both potential risks. That means businesses will need to make sure that these networks are isolated and protected, with data encryption with security of sensors, gateways and other components a necessity. The current state of IoT technology makes that harder to ensure, however, as does a lack of consistent IoT security planning across organisations. That's very worrying considering the documented willingness of hackers to tamper with industrial systems that have been connected to the internet but left unprotected.