A thing in the internet of things can be a person with a heart monitor implant, a farm animal with a biochip transponder, an automobile that has built-in sensors to alert the driver when tire pressure is low or any other natural or man-made object that can be assigned an IP address and is able to transfer data over a network.

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Increasingly, organizations in a variety of industries are using IoT to operate more efficiently, better understand customers to deliver enhanced customer service, improve decision-making and increase the value of the business.

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History of IoT

Kevin Ashton, co-founder of the Auto-ID Center at MIT, first mentioned the internet of things in a presentation he made to Procter & Gamble (P&G) in 1999. Wanting to bring radio frequency ID (RFID) to the attention of P&G’s senior management, Ashton called his presentation “Internet of Things” to incorporate the cool new trend of 1999: the internet.

MIT professor Neil Gershenfeld’s book, When Things Start to Think, also appearing in 1999, didn’t use the exact term but provided a clear vision of where IoT was headed.

When Things Start to Think

IoT has evolved from the convergence of wireless technologies, microelectromechanical systems (MEMS), microservices and the internet. The convergence has helped tear down the silos between operational technology (OT) and information technology (IT), enabling unstructured machine-generated data to be analyzed for insights to drive improvements.

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The first internet appliance, for example, was a Coke machine at Carnegie Mellon University in the early 1980s. Using the web, programmers could check the status of the machine and determine whether there would be a cold drink awaiting them, should they decide to make the trip to the machine.

IoT evolved from machine-to-machine (M2M) communication, i.e., machines connecting to each other via a network without human interaction. M2M refers to connecting a device to the cloud, managing it and collecting data.

Taking M2M to the next level, IoT is a sensor network of billions of smart devices that connect people, systems and other applications to collect and share data. As its foundation, M2M offers the connectivity that enables IoT.

How IoT works

An IoT ecosystem consists of web-enabled smart devices that use embedded processors, sensors and communication hardware to collect, send and act on data they acquire from their environments. IoT devices share the sensor data they collect by connecting to an IoT gateway or other edge device where data is either sent to the cloud to be analyzed or analyzed locally. Sometimes, these devices communicate with other related devices and act on the information they get from one another. The devices do most of the work without human intervention, although people can interact with the devices — for instance, to set them up, give them instructions or access the data

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The future of IoT

IoT is about connecting stuff so that it just works better. As if by magic, IoT has the power to make our lives safer, more connected, more productive, and just better in general.

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The Internet of Things has the opportunity to make utilities and public services more efficient by giving homeowners, building managers, and city planners more data around trends and fluctuations in utility use. This data enables actionable insights that can have a positive impact, both financially and on environmental resource consumption. When you hear terms like smart home, smart building, and smart city, it is the highly granular level of tracking and optimization of utility usage that IoT adopters are looking to achieve.

There is no shortage of IoT market estimations. For example:

Bain & Company expects annual IoT revenue of hardware and software to exceed $450 billion by 2020.

McKinsey & Company estimates IoT will have an $11.1 trillion impact by 2025.

IHS Markit believes the number of connected IoT devices will increase 12% annually to reach 125 billion in 2030.

Gartner assesses that 20.8 billion connected things will be in use by 2020, with total spend on IoT devices and services to reach $3.7 trillion in 2018.