The Internet of Everything

Fridges connected to the web may be yet to catch on, but the smart home is already here, and more huge changes are around the corner, especially in healthcare and urban living.

by Andrew Saunders
Last Updated: 29 May 2015

In the beginning there was the internet, and the internet was good. For all that it can sometimes appear trivial (how many cat videos does the world really need?), the net must surely rank as one of the greatest disruptive innovations ever to emerge from the human mind.

But scarcely has the dust settled over that first tidal wave of digital endeavour, which washed away the foundations of industrial-era giants while carrying the feather-light seeds of a new virtual generation far inland, than another, potentially even greater, virtual tsunami approaches in its wake. Head for the high ground, because here comes the internet of everything, aka the internet of things.

'The internet of things is a secular change, it's absolutely fundamental,' says Dr John Cornish, head of the internet of things business unit at Cambridge-based chip designer ARM. The company's power-efficient processors are already found in many new wearable devices, such as smart watches and fitness trackers, which are important indicators of much greater changes yet to come.

The projected speed of growth of the internet of things has the potential to make the achievements of the first couple of online decades look distinctly pedestrian. It's estimated that there are now around six billion conventional devices online, including computers, tablets and smartphones.

By 2020, that number is set to quadruple to somewhere between 20 and 30 billion, the vast majority of growth coming from connecting unconventional 'dumb' objects to the internet. That will translate into $19bn of economic value, according to Gartner Research. 'It's a very real opportunity, although it will probably take 20 years or so to play out,' says Cornish.

So what exactly is the internet of things? The basic idea is that connectivity is not limited only to the usual suspects, such as those six billion computers, tablets and smartphones. In theory, anything can be online. From domestic appliances to street lighting, from cars to cat flaps, furniture to footwear, in a year or two even the shirt on your back could have an IP address.

'Imagine answering the door to an ambulance crew who tell you that you need treatment for the heart attack you're about to have,' says digital strategist Ade McCormack. They've been tipped off by the smart vest you're wearing, monitoring your vital signs and communicating any irregularities directly to the emergency services. 'It's not tech hype. We started off with the internet of people, now we're moving to the internet of things and eventually it will become the internet of things in people,' he claims.

Like many new ideas in tech, this one has been bubbling under for quite a while. The phrase was coined by a Brit - Kevin Ashton of MIT - working in the less-than-glamorous field of supply-chain management for Procter & Gamble in the early 1990s. But it has taken quite a while for the concept to escape the back office and achieve a wider currency.

One of the first well-touted examples was the infamous internet fridge. With a hotline straight to Ocado, this 21st-century domestic marvel was going to relieve us all of the prehistoric chore of food shopping by noting our consumption and automatically restocking - a kind of chilled-down version of the magic porridge pot.

It has yet to take off, not least because of consumer resistance: people don't like being faced with the disparity between the healthy diet they think they enjoy and evidence of the TV-dinner reality, as provided by the fridge's shopping list. And when it emerged earlier this year that hackers had co-opted one, using it to send thousands of spam emails, confidence cooled even further.

But despite such high-profile cock-ups, the internet of things is here to stay. When Google spent £2bn in January buying Nest, a US start-up that makes internet-enabled central heating thermostats, it wasn't just indulging a whim. Nor is British Gas, whose Connected Homes division has been around for two years, and whose smartphone-based Hive remote heating control (see box) has pulled in over 50,000 customers in six months.

So why is it happening now? Given the ubiquity of Wi-Fi and mobile networks, it's all about cost and data-handling capacity, says ARM's Cornish. 'The microprocessor was invented in the 1970s and since the 1980s we've been putting them into more and more things.'

Many everyday items already have microchips in them, from kettles and dishwashers to traffic lights and industrial machinery. In such cases, most of the hard work has already been done. Adding a Wi-Fi or mobile network connection is a no-brainer, he says, provided the cost to the manufacturers of doing so is low enough.

Thanks to the huge economies of scale in the component business unleashed by the smartphone revolution, it is. 'The marginal cost of connecting to the internet has already decreased considerably, and will continue to do so. Cost is trending towards zero.'

The other required piece of infrastructure is the huge number-crunching power of cloud computing - all those connected objects will create yet more data to be processed. 'The cloud provides low-cost access to the kind of computing power that can take the data from billions of devices, aggregate it, draw inferences and connections and add value,'he says.

More consumer 'goods' will become 'services', an upfront payment for ownership being replaced by a pay-as-you-go model in just the same way that, in corporate IT, IBM no longer makes its money from selling hardware. 'Imagine a car as a pay-as-you-go service,' says McCormack. 'The manufacturer gives you the car for free, but you have to pay it for the apps you need to actually use it.'

If much of the cheerleading for the internet of things is coming from the consumer market, with its glittering gadgets and big advertising bucks, some of the most significant changes will come at a business level.

'It's easy to add marketing sizzle with a Bluetooth connection and an app to let people control something via their smartphone. But it's going to be the hidden value that is more important,' says Cornish. 'It boils down to money: there are real financial gains to be made. The companies that don't do this will be at a commercial disadvantage.'

If everything from domestic appliances to industrial equipment is online, it can be monitored and repaired remotely, boosting employee productivity and slashing overheads and carbon emissions.

Manufacturers can analyse the way customers actually use their products in real time, leading to the kind of insights that even the best-run focus groups fail to get anywhere near. 'Dumb assets such as shopping trolleys and hospital beds will become huge sources of valuable customer data,' says McCormack.

This will bring a host of its own problems, not least the potential to make contemporary, Snowden-inspired worries over data security look positively trifling. 'Everything will have an IP address, which will lead to a huge increase in the number of access points for security breaches. Your security could be compromised by your toaster,' he adds.

But, on the other hand, it is quite possible that the advantages of being part of the internet of things will actually make people more, rather than less, willing to share their data. The history of technology does suggest that, if something is sufficiently convenient, we are prepared to overlook many failings.

Either way, you might as well embrace it and enjoy the ride, because in a world where even the pavements and lampposts are online, it will be increasingly hard to opt out.

The smart home

British Gas may not be a name usually associated with cutting-edge innovation, but it is the first large utility company to embrace the internet of things. Its Hive remote heating control allows customers to control their domestic heating and hot water systems wherever they are, via a slick smartphone app and web interface.

It costs £199 to install, and more than 50,000 customers have signed on the dotted line since its launch in October last year.

'The world is changing around us. Customer expectations are rising exponentially. There are apps to help people park their car or hail a cab and they expect to be able to have the same kind of control in their homes,' says Nina Bhatia, MD of British Gas Connected Homes, the division of parent company Centrica, which is behind the new Hive brand.

A module is fixed to the boiler by a British Gas engineer, which communicates with a hub attached to the householder's existing Wi-Fi router. Download the app to your Android or Apple phone and away you go: turn the heat on when you're heading home, or switch it off if you're going to be late. Monitor your consumption, compare it with other similar properties and save money on those ever-rising gas bills.

It's the ability to transform energy from a grudge purchase into a service that customers really want that is exciting the Hive team, though.

'Thirty per cent of households that have an ordinary wall thermostat simply don't use it. But 40% of our remote heating control customers use it at least once a day. With my energy-business hat on, that's a transformational level of engagement,' says Bhatia.

Of course, there is plenty of competition, not least the aforementioned Nest and its deep-pocketed owner. German outfit Tado is also hot on its heels. To leverage British Gas's advantages - it has 11 million customers and makes 50,000 home service visits every day - without being squashed by its size, Connected Homes is an independent skunk-works operation, run like a start-up.

'This unit would not have been as successful if we had grown it in the corporate core. We would never have survived the perfectly legitimate processes of a mature business.'

So its 100 staff are not in Windsor but in Soho, and neither Bhatia nor her technical director, Kass Hussein, are from utilities backgrounds. Expect more smart-home products, some of which will be provided by third-party partners, operating over the low-power domestic wireless network provided by British Gas. A utility for the connected home, you might say.


As the population of the developed world continues to age, chronic diseases such as heart conditions and cancer consume ever greater chunks of national and personal income. Politicians, businesses and punters are left scratching their heads as to how we are going to be able to afford decent healthcare in future.

One man's problem is another's opportunity, of course. By 2020, healthcare applications will account for 15% of the global internet-of-things market, according to Anurag Gupta, a former medic who is now research director at Gartner. That's nearly $3bn, 80% of which will be from services rather than products.

Remote patient monitoring via sensors embedded in clothing or worn on the arm or wrist will become the norm, with diagnostics carried out by machine intelligence in the cloud. 'Things will be able to talk to other things, not just to people.'

The US Food and Drug Administration regulator is already working on draft legislation covering the connectivity of medical devices, aimed squarely at the internet of things. Other nations will follow suit.

Care will increasingly be delivered at a distance, too, perhaps via video link, but also in the case of chronic conditions through automatic drug-delivery devices. One of the greatest problems with long-term illnesses such as diabetes being that patients simply forget to take their meds.

A trip to hospital and the attentions of a real, human doctor may only be required in exceptional cases. 'If low-cost airlines can turn a plane around in 15 minutes, why can't we do that with a hospital bed?' asks Gupta. The productivity of expensive and highly trained medical staff could skyrocket.

Employers and the insurance business will get in on the act, too, monitoring lifestyles and nudging those who don't take enough exercise or eat healthily. What if we don't want to be nudged? A big enough discount on your health insurance would be hard to ignore, says Gupta.

And while there will be opportunities for existing heavyweights in the sector, such as Cisco, GE Healthcare and Philips, many of the biggest advances will be made by small companies.

'What Amazon has done to retail will happen in healthcare too, but there is inertia in medicine. People resist change because they are taught to be risk-averse at medical school. Half the new ideas will come from start-ups,' says Gupta.

Smart cars and cities

The world is urbanising at an unprecedented rate. In 2009, the number of people living in cities surpassed the number living in the country for the first time in human history. The 20 largest cities all have populations of 15 million or above. Traffic congestion and pollution are now major limiting factors in urban life.

Connecting cars to the internet can help turn them from the number-one cause of the problem to at least part of the solution.

'Five years ago, we were having conversations with auto manufacturers to convince them that connectivity was a good thing. We're not having those conversations any more. When they see what they can do, their eyes light up,' say Chris Penrose, senior vice president at giant US telco AT&T.

When enough cars are connected, their speed and location data can form the basis of a cheap, dynamic and efficient traffic management system. 'With all these mobile probes (cars), you don't need expensive infrastructure for mobile traffic monitoring,' says Penrose.

Most modern premium cars come with a SIM card and IP address (some, such as the new Audi A3, even have a choice of mobile data plans), and could theoretically contribute to city-wide traffic and parking management if commercial and data privacy issues can be overcome. Quicker journeys and less pollution are powerful incentives to make it happen.

For the driver, there are other fringe benefits. Streaming music means no more cheesy local radio and its awful ads. And, of course, connectivity is vital for that ultimate 1950s vision of the future: the self-driving car. The technology exists, but the law would have to change before you could drive one.

But smart cities are about more than cars. Smart street lighting that senses when it's not required can save city burghers big money on their electricity bill. Smart bins that know when they need to be emptied keep trucks off the road and council spending down.

Songdo, a new city being built on 1,500 hectares of reclaimed land 35 miles east of Seoul in South Korea, will be the first place to have city-wide Wi-Fi connectivity built into its apartments, office blocks and street furniture.

And as ARM's John Cornish points out, it works even for older metropolises that don't have the luxury of such a fresh start.

'The good thing about smart cities is that a lot of the elements are out there already: traffic-detector loops under the road, cameras and so on,' he says. 'There are lots of opportunities to tie these things together to improve efficiency and save money. It's a virtuous circle.'

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