CW500: The rise of the machines – how devices are taking over the internet

By 2020, there will be a trillion sensors sending data over the internet

Within a few years, the internet will be dominated by machines and sensors rather than people.

By 2020, IT supplier HP estimates there will be close to a trillion sensors sending data over the web.

Cars, buildings, vending machines and heart monitors will soon be routinely reporting their status through the internet to other machines.                                        

The result will be an unprecedented growth in data that will need to be stored, analysed and assessed.

The growth of the internet of things opens up huge potential benefits for society, and lucrative business opportunities for those organisations able to harness it.

But as growing volumes of personal data are traded back and forth, there are growing concerns over the risks that machine to machine (M2M) communication poses to personal privacy.

In the hands of the wrong people, this is massively valuable information,” Dan Wood, senior manager for software market development at HP, told IT leaders at Computer Weekly’s 500 Club. “Breaches will occur.”

The experts

Marc Overton, vice-president of wholesale and M2M, EE

Rob McNamara, executive director, SmartGrid GB

Nick Bromley, portfolio programme manager, Transport for London

Dan Wood, senior manager, software market development, HP

Within seven years, according to HP's projections, the growth of internet-connected sensors will contribute a 50-fold growth in the volume of data on the planet.

Grappling with these volumes of data will test today's IT systems and security systems to the limit. The volume of data is expanding at a rate that is far outstripping the ability of humans to keep pace.

“We as human beings cannot see all the insight in this data. We need machines; we need the intelligent software to actually help us cope with this,” said Wood.

Mobile phone operators are investing millions in the mobile network technology that will make the internet of things a reality.

Mobile operator EE, formerly Everything Everywhere, believes that the next generation of mobile phone technology, 4G, will drive the internet of things.

The technology will open up the radio spectrum needed to allow sensors to communicate at high speed over the internet, said Marc Overton, vice-president of wholesale and machine to machine at EE.

“Data just eats spectrum. If you want to get into mobile-enabled connected devices, you need gallons and gallons of spectrum,” he said.

More on the internet of things

The retail internet of things

One of the first places the internet of things will make its presence felt is on the high street.

Shops will install interactive screens to tailor their displays to the shopper walking by – Minority Report style.

Some retailers, such as John Lewis, are equipping sales assistants with iPads fitted with payment devices, so customers do not have to go to the till to pay.

If the right product is not in stock, the assistant can order it for the customer over the internet, there and then.

In North America, for example, four million people have signed up to receive offers on their mobile phones whenever they enter Starbucks, said Overton.

“If you want, you can set it so that you walk into Starbucks and your coffee will be ready before you reach the counter,” he said.

Other projects underway are likely to result in the creation of intelligent vending machines that will use the smart grid to offer interactive advertising, devices that will cut the cost of motor insurance in return for monitoring drivers’ speed and position, and intelligent tags that could help businesses cut the volume of goods in the supply chain by half.

Powering up the smart grid

One of the most prominent examples of the internet of things is the smart grid. Over the next five years the UK will roll out 50 million smart electricity and gas meters.

They will be fitted with sensors that will allow utility companies to monitor power use in real time, and potentially make it easier for consumers and businesses to reduce their energy bills.

The project is seen as imperative, not only to offset rising energy costs, but also to reduce the load on the UK’s ageing power distribution infrastructure.

Rob McNamara is executive director of SmartGrid GB, the cross-industry group created to champion the smart grid in the UK.                                                                       

“A lot of network operators in the UK have kit that has been in the ground for 50 years – at the time it was put in, it had a shelf life of only 40 years,” he said.

Add to that a huge potential demand for electricity to power electric vehicles, and energy producers see a compelling business case to install smart meters to regulate demand.

Electricity North West, for example, has calculated that Manchester’s power demands would double if its population switched from petrol to electric-powered vehicles.

“That has a major impact on an ageing asset base,” he said.

Smart grid opportunities and challenges

The economic benefits of smart meters are claimed to be huge. SmartGrid GB commissioned research from Ernst & Young last year, which put the potential savings at £19bn between 2012 and 2050.

Investment in smart meter technology could also put the UK in a strong position to export smart meters to the rest of the world, Ernst & Young concluded, and potentially create 9,000 jobs.

There are also huge technical challenges to overcome, McNamara revealed. The technology standards for smart meters have yet to be agreed. And there is a “hell of a lot work” still to be done to agree standards for the associated technologies that will sit in people’s homes.

The biggest challenge of all is to win over consumers, said McNamara. Hard sell tactics used by energy suppliers in the past have left consumers wary.

So going around door to door to explain the benefits of a technology that will not offer consumers any short-term savings will not be easy, he said. “There is really poor trust.”

The London data store 

The Greater London Authority (GLA) set up the London Data Store, in 2009, as part of a project to make data collected by government more accessible.

The centre accesses 560 data streaming services across London’s boroughs, and makes the data available to developers to turn into applications to benefit the public.

About 95% of the data is transport related, including information on bus timetables and locations, rail and underground.

It has attracted some 5,000 registered developers, who have used the data to create, for example, real time bus-tracking applications for smartphones.

Smart cities

Smart meters are one thing, but Nick Bromley, programme manager at Transport for London (TfL), is looking to a much bigger scale – using sensors to create an intelligent city.

“We reckon there are about 50 million devices across London that potentially you could tap into with IP addresses,” he said.

They include stress gauges in buildings and GPS sensors on buses, trains and the underground, in addition to smart energy meters.

Bromley is responsible for managing the iCity project for the Greater London Authority (GLA), which aims to create mobile phone apps that will exploit data collected by the government and local authorities.

The €6bn programme, led out of Barcelona, aims to encourage small businesses to develop innovative applications for data in cities.

It will work hand in hand with the London Data Store, which is making transport and other government data freely available to developers.

“Essentially, we think data is going to become the new utility,” said Bromley, likening its impact to that of the electricity industry.

The GLA is working with Kings College, for example, to develop a simple mobile phone app for leisure centres. It will make it easier for leisure centres in the same area to co-ordinate their programmes, for example, so they can make sure they do not all schedule their women-only evenings for the same evening.

Another project aims to correlate transport data with air quality data, so that planners can monitor the effect of public transport on air quality and make changes to transport routes if necessary.

Other work is underway to create apps to improve cycling safety in London and to make it easier for disabled people to use public transport in the city.

Trying to turn the whole of London into a smart city is not practicable, but there are opportunities in London boroughs that are investing heavily in redevelopment.

The GLA is working closely with Croydon, for example, which plans to spend £5bn over the next five years to improve Croydon town centre.

The companies spending that money are not traditional IT companies such as IBM or Google, but property development companies such as Land Securities, which is using smart devices to improve the management of its properties.

Opening up London transport to disabled people

Some apps may only be used by a few people, but they are strategically important, said Nick Bromley, portfolio manager at Transport for London (TfL).

One example is a mobile app that TfL is developing to help disabled people navigate London’s transport system.

Although TfL spends tens of millions of pounds a year to improve disabled access to stations, there are still many areas where disabled passengers need help.

The app will direct disabled people to the best position on platforms for disabled access, help them find wheelchair ramps and navigate themselves through a station interchange.

Managing a mass of information

The challenges posed by the internet of things are enormous. For a start, no one yet agrees on the technical standards that should form the backbone of the internet of things, according to EE's Marc Overton.

“Standardisation is a real challenge for us as an industry,” he said. In practice, it may be the companies that get their technologies out there first which define the technical standard for everyone else.

For chief information officers, the challenge will be managing a volume of data that is growing faster than the ability of organisations to consume it.

The basic premise that IT departments will hold some of their IT equipment on-premises and some IT in the cloud will no longer hold true, said Wood.

“You are now in an enormously complicated environment, capturing all that data, linking into smart grids, capturing all that data,” he said.

IT departments will need to think about the growth rate and flexibility of their IT systems if they are going to capitalise on the growth of data, he said, and businesses will need entirely different management skills to manage an IT supply chain that extends outside of traditional company boundaries.

Some US companies, for example, are appointing chief data mongers to analyse gigabytes of data coming in from internet click streams.

“I think we are going to see data scientists, chief listening officers, data mongers, as very common job titles in 15 or 20 years' time,”  said Wood.


How the internet of things is changing the world 

Connected cars

Smart wireless sensors are finding applications in motor vehicles, particularly as concerns rise about insurance costs, said Marc Overton, vice-president of wholesale and machine to machine (M2M) at mobile phone operator Everything Everywhere (EE).

EE is working with insurers to develop sensors that record the position and speed of vehicles, in return for the promise of lower premiums for safer drivers, he said.

“If you have a 17 or 18-year-old child, the average cost of insurance for a three or four-year-old Mini, will be £2,500. This connected solution takes at least 30% off, if not more,” he said, speaking to IT leaders at Computer Weekly’s 500 Club.

“It is also peace of mind for you as a parent to track your errant youngster, and also make sure that if something goes horribly wrong, you have got visibility of it as well,” he said.

Interactive vending machines

Internet-connected devices are also causing a revolution in the traditionally dull world of vending machines.

Shops and petrol stations that operate entirely without shop assistants are beginning to appear in Europe and North America. Customers can walk in, fill their cars with petrol, buy a drink from a vending machine and pay by scanning their phone on a mobile point-of-sale system. Customers are filmed on CCTV to ensure there is no cheating.

“It reduces cost of sales significantly,” said Overton.

EE is working on a number of projects to fit remote sensors to vending machines, providing the machine owners with real-time feedback on sales. The project will enable companies to manage restocking much more effectively.

“They can do dynamic offers, dynamic pricing. They can change their focus – on a hot day, go for cold drinks, and on a cold day, go for hot drinks,” he said.

The falling cost of 4G phone SIMs is making it commercially viable for vending machine owners to use the sides of their vending machines for digital advertising. EE has contracts to roll out these digitally enabled machines to several major supermarkets, said Overton.

In one case the technology convinced a soft drinks manufacturer on the brink of closing its estate of unprofitable vending to reconsider.

“Everyone can make money selling space. It is fundamentally transforming the business model," said Overton.

Smart logistics

The logistics industry is another industry that can also benefit from smart sensors.

EE is offering miniaturised GPS positioning sensors, with long battery lives, that at under $50 each are cheap enough to track the movement of individual products through the supply chain.

“They can track and trace anything anywhere,” said Overton.

In the past, retailers would typically have had 50% more goods than they needed in their supply chain to compensate for lost products or late delivery.

But smart sensors make over-stocking redundant and can bring huge savings, said Overton.

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