Defining the Internet of Things

  • In Depth Definition of the Internet of Things
    October 5, 2018

    Defining the Internet of Things

    The Internet of Things entered the mainstream business lexicon in recent years but the concept isn’t new. IoT is essentially a system of interrelated devices connected to the internet. Ubiquitous consumer examples include iPhones, FitBits and Amazon Echos. These devices enhance our everyday lives in a myriad of ways from organization to optimizing health outcomes. In this post, we will explore the rise of IoT and the role it plays in elevating both consumer lives and enterprise today.

    IoT Definitions

    IoT Analytics defines the concept as, “Sensors and actuators embedded in physical objects are linked through wired and wireless networks, often using the same Internet Protocol (IP) that connects the Internet.“

    Deloitte takes their definition a step further regarding the purpose of IoT, “The IoT is a suite of technologies and applications that equip devices and locations to generate all kinds of information—and to connect those devices and locations for instant data analysis and, ideally, “smart” action. Conceptually, the IoT implies physical objects being able to utilize the Internet backbone to communicate data about their condition, position, or other attributes.”

    The Rise of IoT

    The term IoT was coined in 1999 by Kevin Ashton while delivering a presentation to executives Procter & Gamble. The presentation covered supply chain optimization through the utilization of RFID technology. However, the popularity of IoT didn’t take off until about 2010 and then reached mass market in 2014. It was in 2014 that GE announced it was making over $1 billion in IoT-related revenue and Google acquired smart thermostat company, Nest, for $3.2 billion.

    IoT hit its meteoric rise primarily due to two factors: increasing internet connectivity and the precipitous drop in the cost of sensors. Although, connectivity remains a scarcity for much of the globe. According to a 2017 UN study, more than half of the world’s population lacks regular internet access. This gap can be attributed to a lack of infrastructure and affordability. However, developments in 5G will help to close that gap and could potentially become the universal connectivity solution for IoT.

    Internet of things infographic

    IoT by the Numbers

    Research firm, Gartner, predicts that over 20 billion connected IoT devices will exist in circulation by 2020. Currently, consumers dominate the IoT market with over 63% market share in IoT applications. Of those consumers, China, North America and Western Europe make up about 67% of that user base. On the other hand, businesses make up about 57% IoT spend. This is in part due to the complexity of enterprise-grade IoT devices. By 2020, businesses are expected to deploy over 4.3 billion devices for cross-industry use and another 3.1 billion for industry vertical specific use.

    Consumer IoT

    Consumer IoT devices are aimed specifically for the consumer market. Postcapes coins these devices as “entry-level” IoT since they seamlessly integrate into everyday life. While consumer IoT devices certainly add a layer of convenience to our routines, they may just help us multitask and take on more!

    Nest Thermostats

    Most consumers would likely classify IoT devices under the smart-home category. Google’s acquisition of Nest Learning Thermostat occurred during the IoT inflection point in 2014. This highly popularized device remains a hallmark of consumer IoT. The device is a programmable, self-learning Wi-Fi enabled thermostat that automatically optimizes the temperature of a building. Users can activate and control the thermostat using their smartphone. For most home IoT, the smartphone works as a nucleus to control and deploy updates to these devices.

    The company now makes a suite of home IoT devices including cameras, doorbells, security systems, locks and smoke and CO2 alarms.


    Health is another popular category of consumer IoT. Fitbit serves as an IoT activity tracker to help users meet their fitness goals. Fitbit filed for IPO for $358 million in 2015. A year later, shares fell by 50% and the company announced a change in direction from a consumer electronics company to a digital health company.

    This year, Fitbit announced a partnership with Google to deploy Google Cloud to increase operational efficiency and speed to market. This partnership will allow interoperability between Fitbit devices and electronic medical records to give users and their healthcare providers a more complete view of wellbeing and potential lifestyle challenges. This collaboration paints a larger picture of the direction of IoT and its deeper integration into industry and healthcare.

    Enterprise IoT

    At Attunix, we focus on enterprise IoT to help our clients strengthen their business connections and create new ones through the delivery of smarter products and services. Most companies now consider IoT as an integral component of their digital transformation strategies.

    Manufacturing and Production

    IoT can impact almost any production-oriented business. A Forbes study revealed 45% of executives see manufacturing and production as a top priority for IoT deployment. On the manufacturing floor, IoT devices can help detect defects and substandard products before shipping out.

    Forbes highlights Harley Davidson as a modern example of a company using IoT enhanced manufacturing. Its York, Pennsylvania factory records each step in the production process into a real-time performance database. Their paint booth uses heat and humidity sensors that communicate with software to adjust the temperature and fan speeds when deviating from acceptable ranges. This allows for consistency in quality without the need for direct human intervention or supervision.

    Supply Chain and Logistics

    Companies rely on supply chain performance for both customer satisfaction and cost savings. With supply chains increasing in complexity, scale and global spread, the more important visibility and automation become.

    In 2012, Amazon acquired Kiva Systems, now known as Amazon Robotics, to automate picking in their distribution centers. While the majority of Amazon DCs still rely on human workers, automating at least a portion of their supply chain helps increase speed, accuracy while reducing costs over time. Amazon currently manages 75 fulfillment centers nationwide with over 500 million SKUs. With the help of Kiva robots coupled with IoT capabilities, Amazon reportedly saves $22 million each year.

    Customer Experience

    Customer experience (CX) is one of the top areas of IoT investment in both B2C and B2B environments. For example, Caterpillar products now gather and transmit data to their owners that help reduce operating costs, assist with predictive maintenance and increase productivity. The IoT embedded into the machines adds value for Caterpillar’s customers that not only improves their experience but helps to elevate their businesses.