Explainer Series: The Internet of Things

What Is It?

The Internet of Things (IoT) is the connection of physical devices to networks in which data is gathered and communicated ready for consumption and/or action. McKinsey and Company have identified six distinct types of IoT applications; tracking behaviour, enhanced situation awareness, sensor-driven analytics, process optimisation, optimised resources consumption, and complex autonomous systems. 

When Was It Invented?

Kevin Ashton, an entrepreneur and consumer sensor expert, is widely credited as first coining the term in 1999 whilst working at Proctor & Gamble. Ashton wanted to solve the problem of empty shelves. The answer came in the form of Radio Frequency Identification (RFID), a technology which uses electromagnetic fields to automatically identify and track tags attached to objects. Thus, the Internet of Things was born.

How Does It Work?

A typical IoT ecosystem involves devices, sensors, actuators, applications, protocols, standards, data acquisition and analysis technology, specifically designed software, digital systems, electronic systems, the Internet, wireless networks, unique identifying addresses or markers, and a real-world environment.

1. Intelligent device is installed and network configured.
2. Device begins sensing its environment and captures data.
3. Data is transmitted to control centre.
4. Transmitted data is analysed.
5. Data is converted into actionable intelligence.
6. Actionable intelligence used to create benefit/value. 

Numbers & Statistics

When concerning the IoT, the numbers are staggering. Juniper Research estimates by 2021, the number of connected IoT devices, sensors, and actuators will reach 46 billion. SAP estimates it could be as high as 50 billion. Accenture projects the IoT’s impact on the global economy could be as high as $14.2 trillion (2030) and in the coming years, 40 per cent of total data created will come from sensors (Gartner). In one final demonstration of the IoT’s potential, the IoT platform market is expected to grow by 116 per cent in 2017 and robust double digit growth is forecast until at least 2025 (MachNation).

Pros & Cons 

There are significant benefits to the widespread adoption of the IoT; automation of tasks, time saving and efficiency gains, optimum utilisation of energy and resources, improvements in quality of life, and the ability to command from central access points are just some of the many communicated benefits. That said, experts point to the potential loss of privacy, security concerns (especially hacking), device compatibility, network complexity, job dislocation, and society becoming increasingly dependent on technology as some of the challenges to be addressed as the IoT integrates into our daily lives. 

The Future

Imagine living in a world where your fridge can detect out of date products and send you a reminder to pick up some milk or yoghurt on the way home from work. Consider the savings made when your washing machine cycles in off-peak electricity usage times. What if you could drive into a parking lot and be made immediately aware of the closest available parking spot? By doing away with intrusive and often painful devices, wearable technology may make your hospital visit far more tolerable. These are some of the possibilities the IoT affords. 

Final Thoughts

Our world is connecting. Processes, people, innovation, optimisation, data, and intelligence are converging to create value. First it was the smart device, then it was the smart building, and now, it’s smart cities. As data storage, data analytics, and sensory devices become faster and cheaper to develop and deploy, the commercial appeal of the IoT will only increase and more than likely, result in an unprecedented information systems arms race. 

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