Rise of the Machines

Rise of the Machines

by CHANDAN RAJAHFounder of Karedo. Technology Expert and Advisor for Digital Catapult


The work conducted at the Auto-ID Centre in Massachusetts Institute of Technology (MIT) on network Radio Frequency Identification (n-RFID) and distributed sensing inconceivably gave rise to a flurry of activity around distributed connected devices with primary sensing and communication capabilities. The community and industry alike eagerly adopted the technology and soon the term Internet of Things (IoT) was coined.

Parallel to this development, closer to 2005, the open source community began releasing templates for Single Computer Boards (SCBs) like Arduino and Raspberry Pi making the technology needed to implement IoT more accessible to the wider community. Excited by this innovation, hobbyists and professionals began adopting building prototypes and promoting IoT to the wider world. The growth of homebrew and start-up IoT devices saw a significant and steady rise from 10 million in 2003 to about 500 million in 2007.

Smartphones played their part in the evolution of IoT. Connected to the Internet over a ubiquitous mobile network, smartphones played a vital role in bringing connectivity to the forefront. Even though smartphones were around since the 90s (or even early 70s considering the broader definition), the release of the Apple iPhone in 2007 was the crucial in popularising this product category. By 2010, the number of devices connected to the Internet, including smartphones and tablets, rose to 12.5 billion. It was the first time that there were more devices connected to the Internet than the population of human beings.

State of Play

Started as solitary devices connected to the Internet, IoT is starting to form clusters of devices in lightly interconnected singular contexts: a network of network of things. Within the esoteric network devices seamlessly connect to each other while across networks communication is restricted and limited. The top three context-specific networks are Transport, Energy and Health Care. They are the early adopters and the creators of large-scale deployments. Military applications are close behind.

Governments have started to appreciate the importance of IoT and have begun investing heavily in demonstrators and accelerators for connected technology. Estimating a surge in IoT market from the current $80 billion in 2015 to a potential $166 billion in 2020, China announced an $800 million investment programme into the industry thereby setting the price for other world economies to play. India and Singapore are not far behind actively investing large sums of money and building the industry rapidly.

The UK and its counterparts in Europe have allocated €80 million to IoT technology in 2015 accessible through funding competitions like the Horizon 2020 call by Innovate UK.

After Google’s acquisition of Nest for $3.2 billion, the largest in the IoT market, Venture Capitalists (VCs) and Angel Investors have started investing in early stage IoT ventures.

Sequoia, closely followed by Intel, has made the largest non-corporate VC funding deals with Lifx, Simplisafe and Airstrip.


The Internet of People (the World Wide Web) evolved in phases. It stared with research conducted at ARPANET and CERN evolving into to a ‘gold rush’ to adopt the technology with a large number of services becoming available over a short span. As it’s service delivery capability matured in the ‘dot-com’ era, companies like Amazon and eBay delivering reliable services became ubiquitous. The Internet of People has now reached a point where it is woven into the social fabric and become a platform for non- conventional Internet services like Facebook, Twitter and WhatsApp.

IoT has just crossed the research phase. It is entering the “gold rush” phase peaking on the Gartner Emerging Technology Hype Cycle. Customary to its predecessor, the Internet of People, IoT is poised to enter a phase of mature services delivery where value can be realised from an aggregate critical mass of connected devices.

Predictions suggest that the IoT market would see 50 billion connected devices by 2020. This is surely a conservative number considering that the market is growing at 40-50% annually. It is not inconceivable to expect closer to 100 billion devices by 2020.

The ascension of wearable technology as the face of IoT suggests that personal connected devices will dominate the world. Yet this may not be the case, as adoption inertia usually faced by Business to Customer (B2C) propositions will hamper immediate widespread presence. It is more realistic to consider institutions and enterprises adopting IoT in large- scale in the near to medium term.

Predicting which of these institutions and enterprises will be early adopters is quite impossible. Yet identifying the industries that might derive most value is feasible. The health care industry, with $800 billion value to be unlocked, springs to pole position closely followed by military and then traditional industry sectors like energy, manufacturing and transport. The top value drivers seem to be clustered around asset (and personnel) tracking, situational awareness, decision assistance, process optimisation, resource monitoring and in some cases autonomous systems.

The wider IoT problem is larger than any single enterprise, institution or consortium purely due to the variety of technologies needed to make the system and proposition valuable. It is likely that each sub-segment will adopt IoT independently forming and growing the esoteric network. These networks will slowly connect with each other forming the network of network of things. Industry review suggests that the first of many widely used network of network will appear in the next 3 to 5 years.

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