Internet of things (IoT)

Internet of Things

Quick definition: The Internet of Things (IoT) refers to the connecting of physical devices to create a network that is capable of making real-time computations at the location — also known as on the edge — and also relaying and receiving information to and from the cloud.

Key takeaways:

The following information was provided during an interview with Josh van Tonder, product marketing strategist for Adobe Experience Manager.

What is the Internet of Things (IoT)?

What are some IoT applications and uses?

What are the benefits of IoT?

What challenges does IoT present for brands?

What is the history of IoT?

How does IoT impact consumer privacy?

What is “the edge”?

What are the components of an IoT system?

Do IoT systems require a Wi-Fi connection?

Who analyzes information gathered from IoT devices?

Does IoT open up new revenue streams?

What is the future of IoT?

What is the Internet of Things (IoT)?

The Internet of Things is a conglomerate of interconnected computing devices in the physical realm, often quite small, that performs specific actions and collects information.

A connected device could be something used for consumer purposes — like a smart thermostat, virtual assistant, smart check-in at a hotel, touch display at a store, smart vending machines, smartwatch or smart security systems — or it could be a device used for commercial purposes, like smart sprinklers on a farm.

A connected device takes information from where it is located — like a smart home, store, car, wearable device, or factory — and sends that information to the cloud. It’s a way of distributing computing power.

A device could be a sensor that collects data and intelligently takes an action, or it could offer a specific experience.

What are some IoT applications and uses?

IoT devices provide a wide variety of benefits to the user and can perform many different tasks. An example of Internet of Things in a commercial setting is a system used to automate and improve farming techniques.

You might have sensors that monitor the rainfall and temperature. In that scenario, the system is going to collect information and decide, possibly using AI, on the best amount of water for irrigation, then relay that information to the sprinklers.

In a home setting, you can have a security system that monitors for possible intrusions or suspicious noises.

Then if it detects anything, it will automatically set off the alarm on the site, notify the homeowner on their app, and also notify the security firm so that they can take action.

Other IoT uses on the consumer side include examples listed above, like smart refrigerators and smart hotel check-in, as well as many other things like smart washing machines that orders detergent when it senses you’re low.

Smart devices for consumers can ensure complete automatic fulfillment and offer personalized experiences. In the future, customers may be able to go to a gas station and see the gas pump already preselected with their fuel choice and payment amount.

Another way IoT comes into play in a consumer environment is in the sharing economy. Many urban areas now allow people to rent a bike or electric scooter from one location and return it to another location, or just leave it for pick up.

The bike or scooter is a connected device that reports when it’s in use, who rented it, and where they left it. That experience ultimately can then be more personalized for you over time.

That is data that can be leveraged to remove friction for your experience and provide an experience specifically for you.

What are the benefits of IoT?

You can start to collect information at a scale that has never really been possible and collate that and add intelligence around it.

For example, in agriculture, the business benefit is that you could drive better crop production by using AI and sensors on location where the crops are grown. IoT democratizes intelligence and information gathering to a much higher scale.

On the consumer side, the benefits of Internet of Things are its ability to automate basic tasks to save time, like reordering laundry detergent or printer ink, and its ability to offer personalized experiences that meet the needs of the user.

It gets you the things you need faster and more effectively, and overall, it all makes life easier. And companies who invest in IoT can benefit from learning more about their customers, allowing them to make better business decisions.

What challenges does IoT present for brands?

One concern is protecting privacy. There is a balancing act of figuring out what the consumer wants and what is an acceptable level of information to gather.

The customer may appreciate the company recognizing a hardware problem with the device and automatically sending a replacement part, but some consumers may be concerned if their smart refrigerator is communicating all the different food that has been RFID-tagged or scanning UPCs as they are put in the fridge so the company can order new food automatically.

If a company is gathering information, storing it, and acting on it, the customer will want to know what information is being gathered.

Companies can mitigate this concern by providing clear and robust guidance on what data is being collected and why and what is not being collected, and then giving control to the user about whether or not they want to share that data.

Historically, something that has slowed implementation down is the fact that the technology infrastructure wasn't as standardized. Maybe systems weren't interoperable initially.

But that is now starting to go away as companies can use standardized, commoditized technology that drives much of the rest of the internet.

Costs, which used to be prohibitive, are going down as well. In addition to this effect of Moore’s law, where costs automatically decrease over time, Internet of Things platforms can be subsidized by other companies because they can drive new revenue streams.

Challenges also occur surrounding content and data management. There's the device, the sensors, and the network, but it needs content and data and to deliver the experience.

Being effectively able to centralize that information and do it at scale, both gaining insights in the data and then intelligently getting experiences that are consistent across the other touchpoints that you may have with that customer, is an important part of an IoT system.

That is one element that organizations are always struggling to do better. They’re trying to rationalize these different touchpoints across the broader set that they're working with.

And that is where the centralization of content and data and making those experiences and data unified is a key challenge.

Another challenge IoT systems face is the lack of a consistent network around the world. You can’t go anywhere and expect to be connected at the same bandwidth. That’s a problem that can be solved as network connectivity improves globally.

What is the history of loT?

There are multiple pieces of technology needed for IoT that have been evolving simultaneously and have now intersected.

First, there is the hardware piece. The size and cost of microprocessors, chips, and sensors have decreased radically over time. It's getting cheaper to have powerful CPUs and sensors packed into a tiny little thing. This allows IoT devices to be everywhere.

The other piece is that a ubiquitous network has been deployed across the world. As wireless and high-bandwidth internet has expanded, it has become easier to connect these devices. So, the network pieces have been laid.

Another important piece is the evolution of software running in the cloud. Artificial intelligence (AI) and machine-learning capabilities in software improve analytics capabilities and allow IoT devices to process information and make decisions.

This convergence of technological advances has reached a point where we can connect IoT devices at an affordable cost and have them perform useful tasks.

How does IoT impact consumer privacy?

IoT technology doesn’t pose more of a security risk than other new technologies, but companies can still take steps to further alleviate customer concerns.

First, companies can be open about what data is being collected and how it's going to be used, as well as ensure that consumers are aware and are opting in.

Also, if a customer decides to use something, they may change their mind later. Companies must allow people the option to get out and get rid of their data with confidence.

Second, companies should have technical procedures for protecting information while it's being gathered, transferred, and stored.

Then there is the human element — there are still people involved in managing these systems and ensuring that you have the right processes in place. Human employees must follow the right processes for protecting information in place.

What is “the edge”?

The term “edge” refers to a computing device on the edge of the network. It’s gathering information and performing analysis on location, instead of in the cloud.

Edge computing allows data to be processed closer to where it originated or was gathered, so data doesn’t need to be constantly passed back and forth from the device to a processing tool.

It also allows for data processing if there is limited internet connectivity.

What are the components of an IoT system?

There are four main components to an IoT system. Since it's the Internet of Things, the internet plays a role.

There is either a wired or wireless type of network connection, either all the time or part of the time. If the device is only connected part of the time, it understands that it must reconnect to upload or download info.

On the other end of the network, the device is usually connected to a cloud service to exchange information with other devices and the centralized cloud services that offer computation support and information.

The device will gather and process information, then connect with a cloud service that augments and aggregates that information.

This often leverages AI and analytics capabilities to drive better experiences. So the cloud plays a role in aggregating and controlling those devices.

The second important part is the physical object, the "thing", which is what helps provide an experience for the customer.

It’s going to have some housing and some computing elements, like a miniaturized computer of some kind. It will also have something that does I/O because it’s either going to interact with someone or it has a sensor to gather information.

The sensor could be a microphone, a camera, the thermostat, an accelerometer, or a gyroscope, to name a few.

Another component included in Internet of Things systems is the content stored on the device, or pulled from the cloud. Users will interact with that content using a feature like voice or a touch screen.

For example, a smart refrigerator may have a small touch screen that allows the user to quickly see the contents of the fridge or pull up a recipe.

The final piece needed is the actual data being gathered and processed. The smart object contains an IoT sensor that tracks your behavior and choices and uses that input to make informed decisions.

In addition to relaying that information to the cloud service, an IoT device can use that data to do some things locally, like:

Do IoT systems require a Wi-Fi connection?

Typically there is a network involved at some point, but that doesn’t have to be connected all the time. It’s quite common that network connectivity is weak in Internet of Things deployments in some field locations.

The bandwidth may be low or you may lose connectivity entirely for a period, but usually the system is set up in a way that it will be able to operate autonomously for some period, and then reconnect to upload information, download information, and synchronize.

The device can communicate with the cloud, relay its information and analysis, then ask for new instructions and execute.

Who analyzes information gathered from IoT devices?

The IoT device itself is analyzing information. A lot of these devices have AI and analytics capabilities built in so they can do the analysis on the edge themselves.

The Internet of Things device will help determine what to do and make the experience better, but then there’s usually some exchange of contents and data sent into the cloud so that it can verify things.

Going back to the example of keyless check-in at a hotel, the IoT device needs to check back with a cloud service to verify that you are a guest and are authorized to access that room.

Though, it also has to actually unlock the door to the room, which must happen locally.

With consumer devices like Nest or Alexa, they’re doing something for a user onsite, but they are also relaying information back to Google or Amazon.

These companies then do their own analysis and pool anonymized data from all devices and big data sources to understand consumer trends, make predictions, and improve the product.

For example, Amazon can use the speech it captures to improve natural language processing. The ability to collect really substantial amounts of data is attractive to many companies.

Even large appliance manufacturers are becoming interested in learning how their products are used so they can figure out how to improve them and add value to consumers.

Data from home appliances, for example, could also provide insights on how to make those products more environmentally friendly.

Does IoT open up new revenue streams?

Having these devices on the edge provides more information and sensors to offer better service.

At the end of the day, companies are competing on the basis of an experience and providing a better experience.

To the extent that you can offer more relevant, personal, and timely experiences as part of your service, IoT certainly opens new revenue streams to be more competitive. There are also opportunities to add adjacent services.

For example, at the gas pump or in the hotel, knowing more about a person opens up another touchpoint to interact with them that you may not have had before.

That gives you an avenue to recommend other services and products at that moment when it makes sense without being creepy.

IoT makes you both more competitive in the market and more relevant, and it gives you another opportunity and more data to provide additional services or products to the customer over time.

If companies offer IoT devices as products, they provide an opportunity to automate and offer value in ways that haven’t been possible before.

Companies can have these incredibly inexpensive but stunningly powerful computers gathering information, running incredibly powerful AI algorithms.

And then they can aggregate that so it can do something smart on the edge, and then something even smarter once you aggregate the information across all devices.

In nearly every vertical that has any physical presence, there are applications for IoT. Most companies are going to have an application where you can add value for the end user or for the business.

That may not mean that you’re necessarily charging for the device or system, but you may charge more for the ultimate service. Or providing the service may just make you more competitive. You’re more likely to offer a service that’s highly differentiated.

What is the future of IoT?

The first thing that will change is scale. There will be an expansion of hardware and the amount of data. Also, the number of devices will increase, and they will all be collecting volumes of data. And as the global network improves, the Internet of Things will become more interconnected as more people gain access. As access to smart objects and other IoT devices expands, more opportunities will arise that simplify tasks, improve efficiency, reduce friction for the consumer.

The intelligence and capability of devices will also improve. What that ultimately means is that there are going to be more devices collecting more data points and more information, and the devices will be able to make more intelligent decisions based on that data.

In theory, the benefit is that devices can take on more tasks and look for efficiencies that they can't today, particularly as AI continues to evolve and become more capable. That will lead to better, more relevant, and personalized experiences for the consumer and improve overall efficiencies.

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