Everyone is talking about the Internet of Things. But where is it?

Computer security researcher David Balaban attempts to answer the question on whether or not the future is already here


The Internet of Things (IoT) has been gaining increasing popularity over the past few years. All IT-related websites publish many articles about smart homes, connected cars, wearable devices, new technologies and the standards growing around the IoT. Media outlets aimed at mass audiences are also increasingly writing about the incredible potential of the IoT, with many reporting that the market volumes are enormous.

Over the past three years, I have participated in several projects and studied many cases related to the IoT. In this article I want to try to give a detailed answer to the following question: "Is the future already here?"

During my work in this area, I have developed several habits. One of them is starting any IoT-related conversation with a description of what it is, preferably with examples.

So, IoT is a term that groups a series of technologies, devices, platforms and applications that are in one way or another connected to the network. This can be either a connection to the network of already existing and long-used devices or completely new ones, which did not exist before the advent of network connectivity.

For example, home appliances can be attributed to the first group. For many years people have been using light bulbs, refrigerators and coffee machines, but with the advent of the ability to connect them to the network, a number of new functions appeared in these familiar devices.

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The second group implies devices that, in general, are worthless without the ability to be connected to the network. For example, all kinds of trackers that transmit data to a certain common center (or at least to a smartphone) for processing.

You can come up with a huge number of examples to describe what the IoT is. At a certain stage, someone may say: "You can connect all four legs of this chair to the network, but what for?"

Indeed, as marketing principles tell us, any new technology, in order to be in demand (someone willing to pay for it) must solve some specific problem. The IoT can have three values:

  • Economic: Generating additional income or reducing costs.
  • Access to data: This is a new value, not yet fully understood.
  • Some kind of new functionality that solves certain user problems.

Let me describe these in more detail:


Since economic value is the most common, I will give the most popular example. A property management company pays an electricity bill that is formed according to data from the "master" meter. This property management company in turn bills tenants in accordance to data transmitted from their individual meters attached to each apartment. Not all 100% of tenants pay their bills in times. And in many parts of the world, tenants must provide this data every month themselves. Accordingly, the property management company has to pay the difference between what the master meter shows and what was received from tenants.

It is important here to accurately and in time collect all data from individual meters. If you connect all individual meters to the network and make them transmit data automatically, the collection rate will be close to 100%, and the difference between the master meter and individual meters will decrease. In addition, in case the difference persists, it will help finding electricity consumption abnormmalities. Thus, connecting the meters to the network allows to reduce costs.

Access to data

Data analysis is more about the big data concept, but the IoT is directly related to the collection of this data. Let's take the example of a company that processes data from trackers installed in cars. As a rule, the purpose of collecting data from these trackers is to obtain information about specific cars such as their location, condition of spear parts, driving style and timing. Transportation and logistics companies will pay to the processing company for this data.

So, the data processing company receives value from the ability to collect data from connected devices. Processing this data for different clients, our hypothetical data processing company stores different datasets and can analyze them. This means that this company can provide analytics services. For example, to assess the need to change the routes. And these analytics services can cost more than just providing data on specific cars to the transportation company.

New functionality

The last category, as a rule, carries value only for end users. Basically, this is some kind of additional functionality, such as an ability to remotely start the engine or turn on the heater in your country house. Such things add the convenience for which people are willing to pay.

All these types of value are united by one fact: They cease to be valuable if the cost of the service is too high. This is one of the main problems of the IoT market today. How much are you willing to pay for connecting all home appliances to the network, given that in the end, saving on water or electricity, as well as overall convenience will not be too noticeable? I am sure everyone will have their own answer to this question, but in 90% of cases, this value will be noticeably less than the cost of installation and maintenance of IoT systems. This means either new technologies should appear that will lead to lower prices, or the value should be so big to be able to outweigh the cost.

For each IoT use case, the cost of integration and the benefits obtained cross at different time points. Somewhere they have already crossed, but for the majority of use cases large initial investments are still required (which no one except Elon Musk or Jeff Bezos has the courage to make).

There is also a big problem that has to do with security. IoT devices have been used by botnet owners. Cybercriminals use these botnets to launch the biggest DDoS attacks and massively spam users with viruses attached to emails. The main IoT security problem is the lack of common standards ensuring the safety of devices. It is in our interest to come up with new regulations, rules and security best practices that would be followed by IoT manufacturers, their customers and communication providers.

Consumers may like the new functionality but IoT production and sales are going to be restricted until this infrastructure becomes a trusted and secure environment.

Again, in some cases, the future has already arrived. Things connected to the network have been helping us for a long time. Some of these examples look pretty ordinary and do not cause a "wow effect". Other examples are simply invisible to the general public, for example, logistics companies and the trackers they use. We simply got used to some things and treat them as a commonplace (e.g., home security systems).

A huge number of new technologies never achieve the desired growth rate. Smart home devices are being sold by numerous companies. Everyone is afraid to "oversleep" the moment when people suddenly start using these tools. But so far, it seems that domotics has not yet gone en masse.

Other technologies are only about to appear. High hopes are pinned on "energy-saving" data transmission technologies and the development of autonomous power systems. Many car manufacturers and IT companies are actively working in the direction of self-driving cars.

No one can say now when this "future" will come. This may apply to all existing and emerging technologies. Each new thing has the potential to blow up the market, or it may go unnoticed. Many will simply occupy their narrow niche.

Gradually, step by step, our daily life is already changing, and it has been for quite some time. Changes do not happen in one day and certainly not in one year. No one can say at what exact moment we began to call taxis using the internet and sit into the strangers' cars without fear. Gradually, our streets will be filled with unmanned vehicles; all cities will be covered with a network of cameras and sensors; animals and suitcases will be microchipped; and we will buy fitness trackers to control our weight when there is no need to rise from the couch in order to turn off the light or feed the pet. It is time now to prepare ourselves for the new digital paradigm.

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