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Part of a ZDNet Special Feature: 5G: What it means for IoT

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

Updated: The Internet of Things explained. What the IoT is, and where it's going next.

5G: What it means for IoT

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 an example of an Internet of Things device?

Pretty much any physical object can be transformed into an IoT device if it can be connected to the internet to be controlled or communicate information.

A lightbulb that can be switched on using a smartphone app is an IoT device, as is a motion sensor or a smart thermostat in your office or a connected streetlight. An IoT device could be as fluffy as a child's toy or as serious as a driverless truck. Some larger objects may themselves be filled with many smaller IoT components, such as a jet engine that's now filled with thousands of sensors collecting and transmitting data back to make sure it is operating efficiently. At an even bigger scale, smart cities projects are filling entire regions with sensors to help us understand and control the environment. 

SEE: 5G: What it means for IoT (ZDNet/TechRepublic special feature) | Download the free PDF version (TechRepublic)

The term IoT is mainly used for devices that wouldn't usually be generally expected to have an internet connection, and that can communicate with the network independently of human action. For this reason, a PC isn't generally considered an IoT device and neither is a smartphone -- even though the latter is crammed with sensors. A smartwatch or a fitness band or other wearable device might be counted as an IoT device, however.

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.

news-networking-iot-city-istock.png

"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). 

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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.

See also: How SMBs can maximize the benefits of IoT initiatives

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.

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"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.

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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

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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 long 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.

The IoT bridges the gap between the digital world and the physical world, which means that hacking into devices can have dangerous real-world consequences. Hacking into the sensors controlling the temperature in a power station could trick the operators into making a catastrophic decision; taking control of a driverless car could also end in disaster.

What about privacy and the Internet of Things?

With all those sensors collecting data on everything you do, the IoT is a potentially vast privacy and security headache. Take the smart home: it can tell when you wake up (when the smart coffee machine is activated) and how well you brush your teeth (thanks to your smart toothbrush), what radio station you listen to (thanks to your smart speaker), what type of food you eat (thanks to your smart oven or fridge), what your children think (thanks to their smart toys), and who visits you and passes by your house (thanks to your smart doorbell). While companies will make money from selling you the smart object in the first place, their IoT business model probably involves selling at least some of that data, too.

What happens to that data is a vitally important privacy matter. Not all smart home companies build their business model around harvesting and selling your data, but some do.

And it's worth remembering that IoT data can be combined with other bits of data to create a surprisingly detailed picture of you. It's surprisingly easy to find out a lot about a person from a few different sensor readings. In one project, a researcher found that by analysing data charting just the home's energy consumption, carbon monoxide and carbon dioxide levels, temperature, and humidity throughout the day they could work out what someone was having for dinner.

IoT, privacy and business

Consumers need to understand the exchange they are making and whether they are happy with that. Some of the same issues apply to business: would your executive team be happy to discuss a merger in a meeting room equipped with smart speakers and cameras, for example? One recent survey found that four out of five companies would be unable to identify all the IoT devices on their network.

Badly installed IoT products could easily open up corporate networks to attack by hackers, or simply leak data. It might seem like a trivial threat but imagine if the smart locks at your office refused to open one morning or the smart weather station in the CEO's office was used by hackers to create a backdoor into your network.

The IoT and cyberwarfare

The IoT makes computing physical. So if things go wrong with IoT devices, there can be major real-world consequences -- something that nations planning their cyberwarfare strategies are now taking into account.

US intelligence community briefings have warned that the country's adversaries already have the ability to threaten its critical infrastructure as well "as the broader ecosystem of connected consumer and industrial devices known as the Internet of Things". US intelligence has also warned that connected thermostats, cameras, and cookers could all be used either to spy on citizens of another country, or to cause havoc if they were hacked. Adding key elements of national critical infrastructure (like dams, bridges, and elements of the electricity grid) to the IoT makes it even more vital that security is as tight as possible.

The Internet of Things and data

An IoT device will likely contain one or more sensors which it will use to collect data. Just what those sensors are collecting will depend on the individual device and its task. Sensors inside industrial machinery might measure temperature or pressure; a security camera might have a proximity sensor along with sound and video, while your home weather station will probably be packing a humidity sensor. All this sensor data – and much, much more – will have to be sent somewhere. That means IoT devices will need to transmit data and will do it via Wi-Fi, 4G, 5G and more.

Tech analyst IDC calculates that within five years IoT gadgets will be creating 79.4 zettabytes of data. Some of this IoT data will be "small and bursty" says IDC – a quick update like a temperature reading from a sensor or a reading from a smart meter. Other devices might create huge amounts of data traffic, like a video surveillance camera using computer vision.

IDC said the amount of data created by IoT devices will grow rapidly in the next few years. Most of the data is being generated by video surveillance, it said, but other industrial and medical uses will generate more data over time.

It said drones will also be a big driver of data creation using cameras. Looking further out, self-driving cars will also generate vast amounts of rich sensor data including audio and video, as well as more specialised automotive sensor data.

Internet of Things and big data analytics

The IoT generates vast amounts of data: from sensors attached to machine parts or environment sensors, or the words we shout at our smart speakers. That means the IoT is a significant driver of big-data analytics projects because it allows companies to create vast data sets and analyse them. Giving a manufacturer vast amounts of data about how its components behave in real-world situations can help them to make improvements much more rapidly, while data culled from sensors around a city could help planners make traffic flow more efficiently.

That data will come in many different forms – voice requests, video, temperature or other sensor readings, all of which can be mined for insight. As analyst IDC notes, IoT metadata category is a growing source of data to be managed and leveraged. "Metadata is a prime candidate to be fed into NoSQL databases like MongoDB to bring structure to unstructured content or fed into cognitive systems to bring new levels of understanding, intelligence, and order to outwardly random environments," it said.

In particular, the IoT will deliver large amounts of real-time data. Cisco calculates that machine-to machine connections that support IoT applications will account for more than half of the total 27.1 billion devices and connections, and will account for 5% of global IP traffic by 2021.

Internet of Things and the cloud

The huge amount of data that IoT applications generate means that many companies will choose to do their data processing in the cloud rather than build huge amounts of in-house capacity. Cloud computing giants are already courting these companies: Microsoft has its Azure IoT suite, while Amazon Web Services provides a range of IoT services, as does Google Cloud.

The Internet of Things and smart cities

By spreading a vast number of sensors over a town or city, planners can get a better idea of what's really happening, in real time. As a result, smart cities projects are a key feature of the IoT. Cities already generate large amounts of data (from security cameras and environmental sensors) and already contain big infrastructure networks (like those controlling traffic lights). IoT projects aim to connect these up, and then add further intelligence into the system.

There are plans to blanket Spain's Balearic Islands with half a million sensors and turn it into a lab for IoT projects, for example. One scheme could involve the regional social-services department using the sensors to help the elderly, while another could identify if a beach has become too crowded and offer alternatives to swimmers. In another example, AT&T is launching a service to monitor infrastructure such as bridges, roadways, and railways with LTE-enabled sensors to monitor structural changes such as cracks and tilts.

The ability to better understand how a city is functioning should allow planners to make changes and monitor how this improves residents' lives.

Big tech companies see smart cities projects as a potentially huge area, and many -- including mobile operators and networking companies -- are now positioning themselves to get involved.

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How do Internet of Things and 5G connect and share data?

IoT devices use a variety of methods to connect and share data, although most will use some form of wireless connectivity: homes and offices will use standard Wi-Fi, Zigbee or Bluetooth Low Energy (or even Ethernet if they aren't especially mobile); other devices will use LTE (existing technologies include Narrowband IoT and LTE-M, largely aimed at small devices sending limited amounts of data) or even satellite connections to communicate. However, the vast number of different options has already led some to argue that IoT communications standards need to be as accepted and interoperable as Wi-Fi is today. 

One area of growth in the next few years will undoubtedly be the use of 5G networks to support IoT projects. 5G offers the ability to fit as many as one million 5G devices in a square kilometre, which means that it will be possible to use a vast number of sensors in a very small area, making large-scale industrial IoT deployments more possible. The UK has just started a trial of 5G and the IoT at two 'smart factories'. However, it could be some time before 5G deployments are widespread: Ericsson predicts that there will be somewhere around five billion IoT devices connected to cellular networks by 2025, but only around a quarter of those will be broadband IoT, with 4G connecting the majority of those.

Outdoor surveillance cameras will be the largest market for 5G IoT devices in the near term, according to Gartner, accounting for the majority (70%) of the 5G IoT devices this year, before dropping to around 30% by the end of 2023, at which point they will be overtaken by connected cars.

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Image: Gartner

The analyst firm predicts that there will be 3.5 million 5G IoT devices in use this year, and nearly 50 million by 2023. Longer term the automotive industry will be the largest sector for 5G IoT use cases, it predicted.

One likely trend is that, as the IoT develops, it could be that less data will be sent for processing in the cloud. To keep costs down, more processing could be done on-device with only the useful data sent back to the cloud – a strategy known as 'edge computing'. This will require new technology – like tamper-proof edge servers that can collect and analyse data far from the cloud or corporate data center.

IoT data and artificial intelligence

IoT devices generate vast amounts of data; that might be information about an engine's temperature or whether a door is open or closed or the reading from a smart meter. All this IoT data has to be collected, stored and analysed. One way companies are making the most of this data is to feed it into artificial intelligence (AI) systems that will take that IoT data and use it to make predictions.

For example, Google has put an AI in charge of its data centre cooling system. The AI uses data pulled from thousands of IoT sensors, which is fed into deep neural networks, and which predict how different choices will affect future energy consumption. By using machine learning and AI, Google has been able to make its data centres more efficient and said the same technology could have uses in other industrial settings.

IoT evolution: Where does the Internet of Things go next?

As the price of sensors and communications continue to drop, it becomes cost-effective to add more devices to the IoT – even if in some cases there's little obvious benefit to consumers. Deployments are at an early stage; most companies that are engaging with the IoT are at the trial stage right now, largely because the necessary technology – sensor technology, 5G and machine-learning powered analytics – are still themselves at a reasonably early stage of development. There are many competing platforms and standards and many different vendors, from device makers to software companies to network operators, want a slice of the pie. It's still not clear which of those will win out. But without standards, and with security an ongoing issue, we are likely to see some more big IoT security mishaps in the next few years.

As the number of connected devices continues to rise, our living and working environments will become filled with smart products – assuming we are willing to accept the security and privacy trade-offs. Some will welcome the new era of smart things. Others will pine for the days when a chair was simply a chair.

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