How the development of standards will affect the internet of things

De facto standards 

As devices and industries develop, the potential for smaller players to enter the market grows. Cisco, for instance, recently launched a contest to encourage startups and SME technology companies to develop internet of things systems for public transport.

In a post on the Bosch Connect World blog, Bosch software innovations senior marketing & communications manager, Anita Bunk, wrote: "Seek out companies on the IoT startup scene – join them for a drink at an IoT meetup to float your ideas (or, if you’re thinking bigger, to make a nice addition to your portfolio)." A comment in one of Bunk's LinkedIn posts stated: "To be successful in marketing IoT you either need to bring something to the market that is ‘Need to have – now' or have the capability to do very long-term investments (10-20 years). Being a startup, we have to do the first option."

While it is hard to fathom how connected devices would change the world of banking – a sector driven by software for high frequency algorithmic trading – Oliver Bussman, CIO of UBS, recently said the IoT would be a major disrupter in banking.

Some startups build on existing banking standards, while disrupters such as Bitcoin create entirely new operating models. As Bunk notes in the blog post, smaller companies are more agile. They are also driven to succeed by the need to create something. Supporting and investing in smaller companies allows larger businesses to tap into this creative thinking and innovation. Working with startups can be symbiotic in that the smaller company benefits from the marketing reach of the larger business; while the larger business gains innovation, which it can use to support its own product development, building an ecosystem of third-party suppliers.

For instance, there are third-party apps on Google Play and the Apple App Store for Philips Hue, the wireless light system. 

Owning the ecosystem

The opposite of the open approach is a closed system - the walled garden of proprietary technology. This is Apple's model, says Ben Moscowitz, senior director of development strategy at Mozilla. He says Apple carefully controls everything that goes into its product without external influence, to promote innovation internally.

He says: “There’s one kind of innovation that stops completely, and that’s innovation against Apple’s business interest. And this is what happens when you end up with walled gardens and silos.”

With Apple controlling every aspect of its market in fine detail, Moscowitz says: "You get great products, great user experiences.”

Similarly, Nest partnered with electricity and gas provider npower in April 2014 to offer UK households its smart central heating system. Nest is a rival to the British Gas offering, Hive. Companies such as Honywell offer standalone internet thermostats. None of these products interoperate. There are also questions over how these products, and the software services that power them, will be sustained over the lifetime of a household central heating system.

Apple, Google and other major companies entering the IoT market have little chance of providing a user or, increasingly, a connected device, with every possible integration point to the outside world.

All of this technology seems to be driven from a consumer angle, rather than a commercial angle

 Andrew Tang, MTI 

User interface versus machine interface

Philips' Hue lighting system now has hundreds of external applications, according to AppleInsider. There are apps that change the light's colour in response to music, or create lighting schemes.

But many firms will not allow open standards in on the consumer-facing side of the IoT.

Andrew Tang, director of security at managed data services company MTI, points out that much of the functionality of IoT-led devices is hidden, and this lack of transparency overwhelms consumers, even though most devices already do this.

“All of this technology seems to be driven from a consumer angle rather than a commercial angle,” Tang says.

“It’s being led by devices rather than applications themselves, and I’m sure it will change but, when we look at the current, what we consider the internet of things – such as light bulbs and thermostats and wearables – they’re being led by the function of that device, rather than the application itself.”

What the future holds

The IoT will need some standards in place if it is not to become just another technology sector governed by the big IT companies.

Beecham research recently called on the technology industry to address security problems that could occur if standards continue to develop slowly. It argued that the industry must unite – from silicon semiconductor manufacturers to network operators and system integrators – to ensure security is built-in from start to finish.

Mozilla's Moscowitz says universal and interoperable protocols are important: “We need to not be owned by any particular entity, because if they’re owned then they’re controlled; and if they’re controlled, that creates the possibility that the person who owns it is vulnerable to executive intervention.”

Standardisation for the IoT as a whole may be unlikely, as larger organisations are generally reluctant to use methods already in place to encourage diversity in the market. And Tang points out that people are drawn towards traditional applications that will provide everything for them.

But that said, there remains scope for differentiation by offering customers greater choice or, like BSH, offering an interoperable ecosystem. Tang summarises: “If we standardise on both hardware and coding, it’s of benefit to the consumer because I then don’t need to buy product A to go with application A, and I don’t need to buy product B that will only work with application B - I could buy any product and it should just work with all these applications.”