Will the new generation of IoT data make us comfortable to give up more privacy?
For the majority of people the Internet of Things will remind them of particular devices which promote a more connected world. However, others don't disagree with the fact there will be a chance for a large market with companies such as McKinsey forecasting that in the next ten years the economic impact could reach the extent of $11tn a year. To people such as Spivack the CEO of Bottlenose, the possibilities from the Internet of Things market go well beyond money.
For most of us, the internet of things (IoT) might call to mind specific gadgets – slick innovations like Nest thermostats or the Apple Watch – that seem to owe their provenance to science fiction and promise a more wired world, as well as the inevitable automation of everyday life.

Then there are people like serial entrepreneur Nova Spivack, someone who’s far less enamoured of the next IoT device than he is with something infinitely geekier: the data that can be captured.

He doesn’t dispute, for example, all the predictions about what a large market opportunity IoT represents. Among such estimates is the one from consulting giant McKinsey, which forecasts that over the next decade the economic impact of IoT could reach as much as $11 trillion a year. Likewise,tech firm Cisco projects a surge in connections of people, process, data and things that could reach 50bn by the end of the decade.

To Spivack, the chief executive of big-data mining company Bottlenose, the opportunities and promise of the IoT market also go much deeper than dollar signs. To him, the market’s potential has less to do with gadgets – the “things” themselves – than with the secrets and insights they unlock about the world.

He points to examples including insurance­-related use cases, where a device monitoring a car’s performance could report a driver’s habits back to the corporate mothership, with the data being used to adjust premiums up or down accordingly. That’s one example among many of how, as computing power gets cheaper and smaller, sensors can turn almost anything into an internet­-connected device – which means almost anything can likewise become a data-­generation device.

“The internet of things represents a major data opportunity”, says Spivack, who also co-founded the startup incubator that gave birth to Apple’s digital assistant Siri. “There’s just no other data opportunity that comes close.”

Spivack’s point is that when everything comprises sensors and has an IP address of its own, the world will see a huge increase in the amount of data being generated – vast streams of data that expand at such a fast clip it takes new kinds of machines and processes to peer into the streams and find some actionable insight.

In other words, he thinks it is the data and the requisite machine learning needed to make sense of it that will comprise the IoT market’s killer app.

“It’s going to be the challenge of the next decade,” says Spivack. “As everything gets an IP address and starts reporting, the question will be – where is this device? What’s its status? What’s going on around it? The amount of data that every device can stream out is going to be huge.”

McKinsey’s research helps prove his point. In a study of more than 150 IoT use cases, McKinsey found we may be using as little as 1% of data being generated – an indictment of how much potential is being left on the table.

A typical oil rig, for example, is festooned with as many as 30,000 sensors, McKinsey notes – yet most oil companies are only using those to detect and control anomalies, not to do things like prediction and related analysis.

“In a way, I think the world is becoming more like the stock market,” Spivack says. “You can now measure theories about everything and make predictions about what needs to be done when resources are running low. If every device in a factory is reporting its state all the time, including when failures happen, you can use machine learning to look at all the devices that are connected, and at what their state was before and during failure events to learn to determine the early signs of failure.”

Meanwhile, the benefits of machine learning also serve to underscore the darker side of IoT.

Entrepreneurs like Spivack may look forward to the business potential of IoT devices throwing off more real­-time data than has ever been available before. But those devices will give Snowden­-era consumers,already worried about things like their social-media posts and Amazon order histories being hoovered up by intelligence services, a few new questions to ask:

Will the generation of IoT­-related data be enough of a benefit for users that they’re comfortable giving up more of their privacy? Do they trust the makers of connected cars, smart homes, activity trackers and the like to keep their data secure and to be transparent in their usage of that data? And not just be transparent about its usage, but its possible sale down the line to a third party?

So far, available survey data about consumer attitudes towards data, privacy and the IoT market – as well as their attitudes about privacy in general – is instructive.

A Ponemon Institute survey of 1,900 consumers, for example, found a whopping 82% of respondents say IoT manufacturers had not provided any details about how their personal information is handled.

A recent Pew study of almost 500 Americans, meanwhile, also found that 88% of respondents said it’s important that someone or some agency or group not watch or listen to them without their permission. Likewise, 63% said it’s important to them to be able to “go around in public without always being identified”.

There are a host of reasons why consumers might look at a Fitbit or smart home device and not feel the same sense of control over their privacy they might have with the more familiar computer programs and traditional devices they use every day. For one thing, notes UK communications regulator Ofcom in a recent report about the market, the IoT comprises a wide range of devices, not all of which have keyboards or screens – making it sometimes unclear what the device is doing.

Meanwhile, the multiplicity of devices spans not just product classes but countries, which is why Ofcom has pointed to growing support for more international standards to govern things like data collection.

“Data captured in one country may be processed or stored in another, and different countries may have different data privacy regimes,” the Ofcom report reads.

Ofcom has a few suggestions to bring some order to IoT data collection, including making terms and conditions for data­-sharing simpler for consumers to understand, and that device makers should build a focus on informed consent into their products.

The urgency for companies to do so will only grow as the market continues to expand and IoT devices increasingly proliferate. Examples of how that proliferation is taking place include US–based retailer Target recently opening the doors in San Francisco to an “open house” – a combination retail space, lab and meeting venue – focused on IoT. The 3,500-square-foot space will display new IoT tech as well as serving as a hands­on showroom where guests can experience the products for themselves.

Carnegie Mellon University has also become a kind of test lab for IoT technology from Google, thanks to a partnership between the two organisations that calls for deploying sensors and accelerometers across the campus, among other things.



The goal, says project lead investigator Anind Dey, is to deploy an IoT infrastructure campus-wide. That’s why Google gave CMU seed funding and access to Google technology, according to Dey, the Charles M Geschke director of the Human-Computer Interaction Institute at CMU.

“We have already begun work on this open infrastructure and have deployed it in a few spaces on campus”, Dey said. “In a year’s time, we hope to be working with the city of Pittsburgh to deploy our technology throughout the city.

“The goals are to turn CMU into a living laboratory for IoT – that is, a place where research and development can go on, in the same place that users will use the technology on an everyday basis.”

As part of that process, he says to expect an app store for IoT applications developed by CMU and others. Laura Ballay, a fellow faculty member at the Human-­Computer Interaction Institute, said the project also gives a sense of how there are “so many interesting applications” when investigating the ways technology can help people within the context of a city. And yet – she also thinks one of the harder things to solve when it comes to IoT is the idea of giving people the degree of control that they want.

Most people, she says, would be overwhelmed by giving them complete granular control over everything an IoT device could do and the data it could collect, asking them for permission every step of the way. Device makers also can’t really build off assumptions about the consumer’s appetite for privacy today, since such attitudes morph a bit over time.

Data may be one of the biggest opportunities to tap via the IoT, but if it’s not handled correctly, she and others think the market won’t have enough users for it to fully take off. It’s a tricky balance, she says – figuring out what to collect, how to use it and how to appropriately inform the user.

“A lot of times technology precedes the people side of things”, Ballay said. “The technology will continue to evolve, but where it becomes interesting to me is when people enter into it and how they think technology should behave. What might have been true 20 years ago is not necessarily true today. Determining what’s right to foist on the world should be at the heart of every designer working on these projects.”

To her mind, these are not things that you can necessarily ask of end users.

And so the tug­-of-­war continues. On one side, IoT devices continue to multiply, with the Altimeter Group noting how this year’s Consumer Electronics Show was packed with things like connected flowerpots and Bluetooth-enabled tape measures. On the other end, there are fears that all the washing machines, toasters and cars in a given city will start flooding, sparking, smoking, and spying.

“Adding a sensor to something does not magically endow it with value for its user, particularly when weighed against potential risks”, the group’s report reads. “One study found that the top reason consumers hadn’t purchased in-­home connected devices was because they didn’t understand the value.

“As a society, we all face the potential to both suffer and benefit from a connected world. It is the responsibility of the entities that are digitalising our physical world to educate, to safeguard, and to help foster new, responsible behavioural precedents in the internet of things.”