There is a lot of hype surrounding the Internet of Things (IoT) but questions remain over what even qualifies as an IoT service. Techworld aims to cut through the complexities to bring you a clear definition of what the Internet of Things is, why it's important, and what future impact it may have. (See also: What is the Internet of Things?)

The simple definition of IoT

Put simply, the Internet of Things is about connecting internet-enabled devices that relay information back to us, to cloud-based applications and to each other (device to device). These 'smart' devices can be anything from mobile phones, fridges, washing machines to wearables, medical equipment or jet engines. Basically, in the Internet of Things, objects use the web and unique identifiers such as RFID tags or processors in order to exist as part of the internet. See also: 12 best uses of IoT in the enterprise.

Internet of things screen technology

But like most things in life, the Internet of Things is not as simple at it seems.

The standard definition of the IoT gives a broad understanding of the connectedness of IoT devices but fails to properly defining which 'things' actually are IoT devices.

"A better approach is by recognising an IoT Device through the presence of four capabilities; connected, intelligent, interactive, and autonomous" says Constellation Research VP and Analyst Andy Mulholland.

"Using these four parameters a smartphone becomes recognisable as an IoT device, and a number of smartphone apps such as Uber become recognisable as IoT smart services" he added.

For example, launching the Uber app and booking a taxi sends information about your location and necessary personal details to 'enable a smart response'.

Essentially, Uber's Cloud provides almost real-time data comparison to match the needs of the person ordering the cab with that of the available taxis.

IoT in Industry

In Britain the most common use of IoT services can be seen in energy: specifically, home heating. British Gas's Hive Active Heating enables consumers to control their home heating from their smartphone, laptop or tablet. It even has the ability to turn off when no one is home by detecting whether your smartphone is in the house or not.

"Smart meters will help consumers better understand their energy usage and at what time energy is more expensive so they can be more judicious with their own usage of energy" says SmartGrid GB executive director and Tech UK associate director, Rob McNamara.

Outside of the home, IoT's effect can be seen within local communities or so called 'smart cities', not to mention the impact on agriculture and farming.

The London Borough of Camden has invested in 'Bigbelly' bins that remotely monitor and report on its fullness. The local authority is alerted when a bin has reached capacity then sends people out to empty it.

Rolls Royce have invested in jet engine sensors that produce real-time data, that can report back on the condition of the engine and even maintain and fix it remotely.

And the farming industry will benefit massively from sensors in soil to monitor its condition for optimum yields. 

But what does this mean for businesses?

Surely IoT practices will have to be embraced on some level by most businesses?

"The real business imperatives arising from adoption of IoT will be operational efficiency and incremental revenue generation opportunities" says global head of HCL Technologies’ IoT Practice, Sukamal Banerjee.

"Connected devices and network sensors will reinvent and optimise the efficiency of business processes and global supply chains in sectors such as manufacturing, healthcare, energy management, transportation, agriculture, and countless others," he adds.

So with the Internet of Things almost definitely ensuring efficiency, it's hard to understand why governments aren't rolling out smart initiatives nationally. Or is it? If we think of recent data hacks at TalkTalk it's pretty understandable to be wary of collecting mass data that is vulnerable to interception. 

Who owns the data?

Determining who owns the data is a difficult task. Do you, the device owner? Or perhaps the manufacturer? Or even the maker of the sensor collecting the data?

In short, there is no uniform approach.

If we look back at the restrictions put in place around digital publishing we stumble upon Digital Rights Management (DRM).

DRM has been around since the beginning of digital publishing and is essentially copyright protection for digital media. And interestingly, it seems very possible to reuse a lot of the approaches found in DRM and apply them to IoT data issues.

"If you have a promiscuous sensor in a smart city, a Digital Rights Management contract [will say] 'I actually own the rights and I allow you to use it under the following terms'. It's actually a pretty good methodology for controlling some of this," says analyst Andy Mulholland.

Like most software, you may own the device but the software in it belongs to the manufacturer, so making any adjustments to the internal structure of a device will probably breach the licence agreement.

So if DRM is used for consumers' data, it may be their data to interact with and the DRM or a DRM-like system could require a contract for use of that data.

Securing the Internet of Things

With huge amounts of data transferred online every second, the biggest challenge to IoT platforms is security and data protection.

Even the first RFID tags have witnessed security challenges but with eager adoption from companies keen to exploit IoT, the level of risk associated is high. 

Security firm Lookout have already highlighted the flaws within Tesla's S model, allowing them to remotely open and close windows, lock and unlock doors, raise and lower car suspension and cut its power - simply by intercepting the entertainment system.

Companies increasingly realise that security needs to be taken seriously. Chip makers Intel have offered a solution.

Intel's DK300 Series Gateway allows its users to securely analyse, share and filter encrypted data that passes between devices. With data protocol secured, or at least with an addition layer of protection, it falls to businesses to take the relevant steps to protect their customers' data.

"That's probably the number one priority on our minds and our counterparts...That's why we all invested in the Industrial Internet Consortium. To make sure that we all collaborate on standards, but also collaborate on security protocols," says SAP's global vice president, David Parker.

"Now we're actually making that more readily available to the likes of you and I in the consumer market so you have to have that highest degree of security."

What's the future of IoT?

IoT could go way beyond smart home energy meters and smart cities. The UK is in a position to be a global leader in this space" claims Tech UK's Rob McNamara.

Services like the NHS could benefit hugely from IoT functionality. Even at an administration level, the NHS could relay vital information to patients and GPs that could save time and money.

Health monitoring devices would reduce the financial pressures the NHS face and, with an aging population, help to aid independent living at home.

"In five years from now I see the world of automation taking a full grip of things like human intervention," says David Parker.

"I see that as a world where I start to predict your behaviour based upon your personas and personal buying habits, and can start delivering services to you before you even realise that you need them."