Internet of Things

Last Updated: 7th July, 2016 (RSS)
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The Internet of Things (IoT) is the emerging disruptive technology for the 21st Century, that will take the place, in the business imagination, of the Internet in the late 20th century (although, of course, it isn't in any sense an "Internet replacement"). Basically, according to Bloor Analyst David Norfolk, the IoT is the emerging, potentially global, network of smart connected products, linked as "systems of systems".

From a business point of view, The Times reports on "Industry 4.0" - the Fourth Industrial Revolution - and the expectations of the EEF, the manufacturing industry's trade body, that this will bring "a much more cyber-connected world in which manufacturing is ever more advanced and automated and in which skilled manual workers will be as adept with IT, software and data handling". The IoT is what will underlay Industry 4.0, which will [probably] be the primary opportunity for the manufacturing industry to grow and make profits through the rest of the 21st century.

IoT essentials

The IoT, in essence, comprises:

  • "Things", which are smart connected products and product systems. Things have intelligence (internal processors), with capabilities ranging from the trivial (an embedded sensor) to the most sophisticated systems (such as weapons control systems).
  • An "Internet-like" Communications Infrastructure. Note this is "Internet-like" - most IoT applications won't be using the vanilla public Internet for communications, as it simply can't support the Trust and Governance - security, reliability, resilience, predictable performance - needed for IoT systems generally.
  • The IoT Computing Infrastructure: the technology systems and systems of systems, that can create new business and social value from connected intelligent Things. There are synergies with the Cloud, as many IoT applications are likely to be Cloud applications too. Bloor Analyst Martin Banks also notes that hierarchical Systems of Systems - "sets of things" clustered into into monitorable, manageable, meta-things - might reduce the amount of data any one IT system needs to deal with, to the point where it can cope; which is one example of the crossover between IoT and IT


Most people think of the IoT in terms of what it makes possible. Examples include:

  • Smart metering, which is probably the first contact of ordinary people with the IoT. This is just a meter that automatically sends meter readings securely, to (for instance) a utilities provider, so that the usage/charging process can be automated - very basic IoT but none-the-less useful. And the automation can be extended in clever ways. The UK government wants all UK businesses and homes to use smart metering by the end of 2020.
  • RFID applications such as tracking a tagged car's progress through the assembly line or tracking pharmaceuticals through a warehouse are basic IoT applications.
  • A car is a Thing that might monitor its environment, so when it starts to rain, it might close its windows. More, as a connected Thing, it might monitor the weather forecast and suggest that you might not want to take off, or down, your convertible's roof at the start of a journey. And, of course, driver-less cars are IoT systems, and are becoming a reality.
  • Proactive maintenance of Things is probably what delivers the most immediate RoI for IoT applications. Replacement parts can arrive before the business notices an emerging problem, because a smart sensor has noticed the issue and placed the order on-line - and scheduled the maintenance effort too. Potentially, this reduces disruption and can also save lives.
  • Remote operation of intelligent drone-Things, over (obviously) secure and resilient communications channels, can provide troops with a real-time "eye in the sky" for safer military operations. Like it or not, military applications are driving IoT technology forwards and, at least, give us confidence that any security issues will be addressed.
  • The IoT as a potential enabler for changing business models. Bloor Analyst Philip Howard highlights a company that has traditionally been a manufacturer of compressors. It now wants to change to a service model in which it provides compressed air; using IoT technology, with sensors in its compressors, to monitor compliance with its SLAs.

IoT caveats

However, as with many new technology initiatives, the IoT is subject to considerable and far from disinterested hype. It is too easy to see the IoT as just a marketing opportunity for consultancy gurus and for extensions to familiar technologies from familiar vendors: relational databases with improved time series and geospatial capabilities; innovative NoSQL databases like Hadoop; and mainstream business intelligence vendors with products querying "big data platforms.

IoT can encompass all of this; but it is potentially much more a genuinely disruptive revolution in 21st century business and social automation, giving people freedom to live and work more effectively. What the IoT is not, is just another cleverer, bigger, Internet initiative. Neither will it "change everything".

The new possibilities it enables will still require old-fashioned governance, as Bloor Analyst David Norfolk points out. The rules governing privacy, legal compliance, business competition and competitive advantage won't go away. In fact, with new possibilities come new risks, which means that the rules must be understood better than ever, and implemented flexibly (focussed on results, not just on the "letter of the law"), and transparently.

As Bloor Analyst Philip Howard observes: "when Shakespeare wrote 'The wanton stings and motion of the sense' in Measure for Measure, he may not have had the IoT in mind but the IoT is all about motion and sensors. And measures for that matter". The IoT represents a huge opportunity for manufacturers of communications and intelligent sensor technology, which means that the end-users of such technologies will need to have a rational and informed - metrics-based - response to IoT marketing claims.

Manufacturing must be able to take reasoned advantage of the new business opportunities that will become available. More than that, however, deep analytics based on feedback from IoT systems has the potential to change behaviours. There is the possibility for (hopefully benign) social engineering, to combat (for example) energy waste and social deprivation.

The size and scope of the IoT

The number of Things connected to the Internet is said to exceed the human population of our planet already, and might reach 50 billion connected devices by the end of the decade.

According to a recent McKinsey Global Institute report:

  • The Internet of Things (IoT) has the potential to unleash as much as $6.2 trillion in new global economic value annually by 2025.
  • McKinsey estimates that 80 to 100 percent of all manufacturers will be using IoT applications by 2025.
  • Global manufacturing by itself might see an economic impact of as much as $2.3 trillion

The implication of all this is that the complexity of business automation will increase and that this must be managed and exploited. Complexity increases exponentially with increasing connectivity; but the consequent increase in degrees of freedom implies increasing opportunities for innovation and business benefit.

The bottom line

You should care about the IoT because big money is involved. Its rise is being fuelled by converging market forces and enabling technology innovations. Companies and users of automated business systems have to ride the IoT wave (or at least pick a safe spot on the beach to observe it from), or they'll be swamped by it.

Fundamentally, the IoT is a disruptive opportunity for companies of all types to offer innovative products and services, managed and governed with end-to-end feedback-controlled management systems; and for users of technology to do better business governed by rich actionable insights

Primarily, you should consider addressing IoT with systems engineering - systems of systems - approaches, using feedback and actionable insights from smart analytics to ensure, in near real time, that the business outcomes are what you are expecting.

People-centric automation

It is important to look at people-centric automation of the whole system. Even when an IoT application is technology-centric and doesn't involve people interactions, it will contribute to a system (think systems-of-systems) that does deliver people-centric services, and you should be at least considering the whole system.

The user experience resulting, ultimately, from IoT systems of systems is paramount. Feedback-controlled intelligent systems can exhibit chaos effects. A small change or failure in one element can have a huge scope of impact - it can flip the state of the whole system. Emergent behaviours are possible: if there is a million to one chance of something going wrong with a sensor-based decision and you make 10million decisions based on that sensor a day, then you will probably experience that failure - and possibly dysfunctional behaviour as a result - on a daily basis.

More choices

So don't limit your choices to the technology vendors you are used to; who may not have a mature experience of the IoT environment. Investigate the systems engineering specialists who are already adopting IoT and have been delivering feedback controlled systems-of-systems solutions - often in the military, aerospace, transport and safety-critical domains - for years. Look too at the more innovative vendors of deployment and management systems for sensor technology.

Disruptive technologies often need disruptive infrastructures to exploit them fully. As well as extensions (hardening) of basic networking and Internet technology, look at emerging standards such as DDS (see Bloor Analyst David Norfolk's blog here and the OMG standard here), as well as emerging technologies such as Graph Databases.

Good governance

Bloor Analyst David Norfolk says that you shouldn't overlook the need for good governance of IoT systems using tools for enabling: analytics; data governance; data quality; advanced threat protection; information governance and data security; network and endpoint security; and so on.

Nevertheless, you will need to do "due diligence", to ensure that your tools can actually cope with the potential scale and complexity of the IoT opportunity.


You will also need to educate your employees in the IoT, its implications, and in its associated technologies. With disruptive technologies, relying on people educating themselves in the new technology and its issues can be very risky.

The EEF, according to the article in The Times already cited, is particularly interested in helping to alleviate the pressure that Industry 4.0 will place on investment and skills - and 58% of its members surveyed are, apparently, concerned that the British workforce does not have the right skills yet. Bloor Analyst Martin Banks says that the IoT winners will come from two camps: those that understand the IoT and IT crossovers, probably with a grounding in business management too; and non-techie but functionally-astute people who can connect what users want to achieve with what is possible. Producing such people will need "education", with a wider scope than mere technical IoT "training".

Even so, don't provide more than very general IoT education to your employees until after they have an immediate opportunity to use what they have learned. Knowledge that isn't used is soon forgotten.

Further Information (Icon) Further Information

Further resources to broaden your knowledge: