The term “Internet of Things” has garnered a bad reputation in some circles, much of which has to do with its origins. The phrase was coined in 1999 at MIT’s Auto-ID Center, which at the time was focused on RFID, or radio-frequency identification. As they saw it, the Internet of Things was a way of finding stuff, tagging items with RFID chips that bided their time until someone went looking for them. I would call it “the Internet of Dumb Things,” or more accurately, the Internet of “(somewhat) Smart Items.”


This approach hit its peak on the hype-meter when Walmart decreed that its top suppliers must implement RFID or else. The plan was that after a successful experience with these suppliers, this decree was going to be extended to all suppliers. A lot of money and effort was spent trying to make this a reality, but it ultimately failed.

The Internet of Things “1.0” failed because it focused on a single technology and a single application—keeping track of items—one of which was too immature and the other too narrow. It also failed because it depended on entirely new infrastructure and devices, virtually none of which existed at the time. The value proposition was overly modest and incremental, which meant it could never cross the chasm into mainstream adoption. It was an R&D project that should never have left the lab.

The transformative power of the Internet of Things doesn’t lie in tracking things, but in connecting them—in enabling people, systems, and devices (“Things”) to talk to each other frictionlessly, in a peer-to-peer relationship. Metcalf postulated that the value of a network rises by the square of the number of connected objects—a theory that has been proven time and time again with fax machines, phones, and the Internet. With billions of connected Things, the network effect offers people, companies, societies, and the planet the opportunity to realize a step change in efficiency and innovation—step change that is required to deal with the very real challenges of today. This vision—we would call it the Internet of Things 2.0—is more in line with what IBM espouses with building a “smarter planet” than with Walmart’s dictating smarter pallets. The Internet of Things 2.0 differs from its predecessor in three important ways:

·      Everything that can be smart will be smart—not just brand new things or selectively tagged items. This means connecting legacy devices and designing fluid data models that place objects in their proper perspective. Instead of one-way communication between scanner and tag, things can interact with people and other things in a multiplicity of ways.

·      It comes at the time when companies, cities, societies, and even the planet itself face severe stresses on resources and have mandates to become more efficient. The value proposition is obvious and pressing.

·      A combination of new software (P2P, Web 2.0, the Semantic Web, and social media), sensors, and pervasive connectivity at last provide all of the elements necessary to move the Internet of Things into the mainstream. This is what we mean by adding the 2.0.

The most immediate opportunities are quite different from the “space age” scenarios commonly envisioned in the Internet of Things—we call these less sexy but just as valuable (and accessible) opportunities the “intranet of things.” More than 10 billion systems and devices that are already capable of communicating are found in intranets and private networks in the manufacturing, transportation, energy, and utilities verticals. Applying the new approach of the Internet of Things 2.0 to these processes offers the opportunity to unlock tremendous value through increased efficiency and innovation.

Though not many know it, most pieces of equipment in factories today—even older ones—have interfaces that were meant to communicate; they were either never hooked up to provide the value that is locked in there, or they are connected into point systems that limit how the data can be accessed and interacted with. Connecting everything that can be connected, and making it all searchable, mashable, composable and networkable: this is what the Internet of Things 2.0 is about, and that’s what the ThingWorx platform delivers.

Ten billion items is just the tip of the iceberg—various estimates predict somewhere between 50  and 500 billion devices will be networked by 2020.  The Internet of Things 2.0 is coming; the question we need to ask ourselves isn’t how to build it, but how to use it to save money, time, and even the planet.