Defining the Internet of Things

Sensors have been tracking data for decades at manufacturing plants, retail stores, and remote oil and gas equipment. Why all of sudden is there this IoT hype all over the media?

The dramatic decrease in sensor costs, bandwidth costs, the spread of cellular coverage, and the rise of cloud computing all combine to create fertile conditions to easily connect devices over the internet. For example, as shown in the following graph, Goldman Sachs predicts an average sensor cost in 2020 of under $0.40 USD, 30% of what it was in 2004. Whether all these devices should be connected or not is hotly debated:

The definitions of IoT seem to vary quite a bit; some include machine sensors only, others include RFID tags and smartphones.

We will use this definition from Forrest Stroud on Webopedia:

Or to get even more basic: stuff that talks to other stuff over the internet without requiring you to do anything. This clears it up, right?

Even the number of things projected to be connected by 2020 varies widely. Some sources project 20.8 billion devices, others project up to 50 billion - over twice the amount.

For our purposes, we are more concerned with how to analyze the data generated than we are about the scope of devices that should be considered part of the IoT. If something sends data remotely by way of the internet, it is fair game for us, especially if it is machine-generated on one end and machine-consumed on the other.

We are more concerned with how to extract value from the data and adapt to circumstances inherent to it. IoT is not really new, as elements of it have been developing for decades. Remote detection of oil well spills was happening in the 1970s. GPS-based vehicle telematics has been around for 20 years. IoT is also not a separate market; it blends into current products and processes. Although much of the media reports on it as if it is a different animal (perhaps even the author of this book - guilty as charged?), you should not think of it this way.