Where is the Internet of Things heading?

27 July 2015

According to Gartner, the term "Internet of Things“ (IoT) reached its peak last year on the first wave of the so-called hype cycle of emerging technologies.

The IoT is not really an emerging technology any more, but the breaking of the first wave is an important landmark. 

The emphasis on "talked about" indicates that the IoT is often perceived as a marketing term. Most of us are one step beyond this and are actually using connected things or devices. Connected things are being ever more widely used to monitor our environment, our health and our fitness. 

How the connection is delivered is not particularly important. Devices are sometimes connected directly to the Internet and sometimes networked via a hub device. The crucial point is that we are creating a new cloud of sensors that "feel" our environment and supply data to a network or other topology. What is decisive is how we use all this data. Ultimately the end user wants less complexity as well as convenience, security and cost savings through recording data and acting on it.

There are huge opportunities for equipment manufacturers to make the transition to become high-value service providers and build closer relationships with end users, particularly by configuring innovative partnerships. Partnering with cloud service providers is an obvious move, and some services based on this model are already entering the market. 

It is likely that flexibility rather than size will be the key success factor in the new IoT markets. For example, a (smart) sensor manufacturer could offer a complete building security solution together with a cloud provider, a telecommunications operator and an insurance company.

Indeed, insurance companies have become quite well aware of the potential opportunities – and threats – the IoT presents to their businesses. In its 2015 report, New Emerging Risk Insights, Swiss Re listed the IoT as a macro trend that has high potential impact in the 3+ years timeframe.  The company sees advantages, such as new ways for insurers to avoid losses and improve risk assessments, but also sees potential weaknesses in increased dependence on data and opportunities for other organisations such as large technology companies to enter the insurance business. Interestingly, the report suggests that the average family will have 100 connected devices, and individuals may be in daily contact with as many as 5000 connected things, by 2025.

The Internet of Things – or more broadly, the Internet of Everything – is heading into a world full of sensors which supply data more or less directly to the cloud.

This ”sensor to the cloud“ connectivity is likely to drive a small revolution in the cloud services sector and change the way data centres are set up to interface with IoT clients. Many of us have become familiar with cloud services, particularly for storing and sharing content, and gaining access to files or information we need when working remotely from the office. For the data centres, this means managing a relatively small number of clients, each typically exchanging large quantities of data. The Industrial Internet of Things, in particular, will change this significantly. 

Consider a city authority, for example, which may implement an IoT-based solution utilising massive numbers of smart sensors to monitor air quality, street lights, congestion levels, energy usage, waste management or many other aspects of the metropolitan environment. This type of scenario is critically dependent on sensor coverage, to maximise the completeness and accuracy of the information collected. In this case there will be many, many sources of quite small quantities of data, all connected to the cloud. This presents significantly different challenges to the cloud services provider, in terms of capturing, and managing sensor data, and processing the data to generate coherent results.

With the widespread connection of smart sensors, self-learning is another term to become familiar in the cloud services lexicon. Increasingly, sensor networking will involve two-way communication between the cloud and smart sensors, not only to gather information but also to apply updates and adjust sensor settings on a more or less continuous basis. For example, if a sensor in an HVAC system shows consistently low temperature readings, the self-learning cloud can become adept at distinguishing the cause and determining the action needed to return the sensor reading to its correct range.

Of course, there is another, more important issue facing the IoT today: data security. Over the last 12 to 18 months, the IoT has ”wised up“ quickly in the sense that the entire industry now recognises the importance of security and is serious about addressing the issue. There has been a noticeable shift in attitudes, and the issue is brought up very quickly now in any presentation on IoT technology. Not so long ago, audiences would focus predominantly on the exciting new applications enabled by smart interactive devices. Now, security is the top-ranked concern.

We have all become aware that the possibility for unauthorised or malicious access to IoT devices, with the objective of stealing data or corrupting equipment or processes, is a very real threat. Exploits such as interfering with a traffic management system or certain types of healthcare technology may threaten life and limb, while other attacks can be aimed at compromising personal privacy or finances, or even national security.

Fortunately, now, there is no longer any need to educate decision makers or product developers about the need to build adequate security into IoT applications. Everyone now understands that security is a critical aspect that must be given proper consideration from an early stage of development.

Moreover, security needs to be comprehensive, covering all aspects such as sensor IDs as well as authorisation and access control, and also must be implemented consistently at all levels, from the sensors to gateways and the cloud. We can draw on existing technologies, such as software authentication and encryption, as well as hardware security such as secure microcontrollers or dedicated cryptographic modules, which have already been deployed successfully in sectors such as mobile wireless, banking and public-transport ticketing. Suitable technologies are available, as is the knowledge needed to apply them, although these may well mean additional costs for IoT applications.

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