assignement and reflection

687

The Internet of Things as
a Platform for Intelligent
Applications

LEARNING OBJECTIVES

■■ Describe the IoT and its characteristics
■■ Discuss the benefits and drivers of IoT
■■ Understand how IoT works
■■ Describe sensors and explain their role in IoT
applications

■■ Describe typical IoT applications in a diversity of fields

■■ Describe smart appliances and homes
■■ Understand the concept of smart cities, their
content, and their benefits

■■ Describe the landscape of autonomous vehicles
■■ Discuss the major issues of IoT implementation

T he Internet of Things (IoT) has been in the technology spotlight since 2014. Its applications are emerging rapidly across many fields in industry, services, govern-ment, and the military (Manyika et al., 2015). It is estimated that 20 to 50 billion
“things” will be connected to the Internet by 2020–2025. The IoT connects large numbers
of smart things and collects data that are processed by analytics and other intelligent
systems. The technology is frequently combined with artificial intelligence (AI) tools for
creating smart applications, notably autonomous cars, smart homes, and smart cities.

13.1 Opening Vignette: CNH Industrial Uses the Internet of Things to Excel 688
13.2 Essentials of IoT 689
13.3 Major Benefits and Drivers of IoT 694
13.4 How IoT Works 696
13.5 Sensors and Their Role in IoT 697
13.6 Selected IoT Applications 701
13.7 Smart Homes and Appliances 703
13.8 Smart Cities and Factories 707
13.9 Autonomous (Self-driving) Vehicles 714

13.10 Implementing IoT and Managerial Considerations 717

C H A P T E R

13

688 Part IV • Robotics, Social Networks, AI and IoT

13.1 OPENING VIGNETTE: CNH Industrial Uses the
Internet of Things to Excel

CNH Industrial N.V. (CNH) is a Netherlands-based global manufacturer of vehicles for
agriculture, construction, and commercial markets. The company produces and services
more than 300 types of vehicles and operates in 190 countries where it employs over
65,000 people. The company’s business is continuously growing while operating in a
very competitive environment.

THE PROBLEM

To manage and coordinate such a complex business from its corporate office in London, the
company needed a superb communication system as well as effective analytical capabili-
ties and a customer service network. For example, the availability of repair parts is critical.
Customers’ equipment does not work until a broken part is replaced. Competitive pressures
are very strong, especially in the agriculture sector where weather conditions, seasonality,
and harvesting pressure may complicate operations. Monitoring and controlling equipment
properly is an important competitive factor. Predicting equipment failures is very desirable.
Rapid connectivity with customers and the equipment they purchase from CNH is essential as
are efficient data monitoring and data collection. Both CNH and its customers need to make
continuous decisions for which real-time flow of information and communication is essential.

THE SOLUTION

Using PTC Transformational Inc. as an IoT, vendor, CNH implemented an IoT-based sys-
tem with internal structural transformation in order to solve its problems and reshape its
connected industrial vehicles. The initial implementation was in the agricultural sector.
The details of the implementation are provided by PTC, Inc. (2015). The highlights of this
IoT are summarized next.

• Connects all vehicles (those that are equipped with sensors and are connected to
the system) in hundreds of locations worldwide to CNH’s command and control
center. This connection enables monitoring performance.

• Monitors the products’ condition and operation as well as their surrounding envi-
ronments through sensors. It also collects external data, such as weather conditions.

• Enables customization of products’ performance at customers’ sites.
• Provides the data necessary for optimizing the equipment’s operation.
• Analyzes the performance of the people who drive CNH’s manufactured vehicles

and recommends changes that can improve the vehicles’ efficiency.
• Predicts the range of the fuel supply in the vehicles.
• Alerts owners to the needs (and timing) of preventive maintenance (e.g., by moni-

toring usage and/or predicting failures) and orders the necessary parts for such
service. This enables proactive and preventive maintenance practices.

• Finds when trucks are overloaded (too much weight), violating CNH’s warranty.
• Provides fast diagnosis of products’ failures.
• Enables the delivery of trucks on schedule by connecting them to planners and

with delivery sources and destinations.
• Helps farmers to optimally plan the entire farming cycle from preparing the soil to

harvesting (by analyzing the weather conditions).
• Analyzes collected data and compares them to standards.

All of this is done mostly wirelessly.

Chapter 13 • The Internet of Things as a Platform for Intelligent Applications 689

THE RESULTS

According to Marcus (2015), CNH halved the downtime of its participating equipment at
customer sites by using the IoT. Parts for incoming orders can be shipped very quickly.
IoT use also helped farmers monitor their fields and equipment to improve efficiency.
The company is now showing customers less effective examples of operations and superb
operating practices. In addition, product development benefits from the analysis of col-
lected data.

Sources: Compiled from PTC, Inc. (2015), Marcus (2015), and cnhindustrial.com/en-us/pages/homepage.aspx.

u QUESTIONS FOR THE OPENING VIGNETTE

1. Why is the IoT the only viable solution to CNH’s problems?
2. List and discuss the major benefits of IoT.
3. How can CNH’s product development benefit from the collected data about usage?
4. It is said that the IoT enables telematics and connected vehicles. Explain.
5. Why is IoT considered the “core of the future business strategy”?
6. It is said that the IoT will enable new services for CNH (e.g., for sales and

collaboration with partners). Elaborate.

7. View Figure 13.1 (The process of IoT) and relate it to the use of IoT at CNH.
8. Identify decision support possibilities.
9. Which decisions made by the company and its customers are supported by IoT?

WHAT WE CAN LEARN FROM THIS VIGNETTE

First, we learned how IoT provides an infrastructure for new types of applications that
connect thousands of items to a decision-making center.

Second, we learned about the flow of data collected by sensors from vehicles and the
environment around them and their transmittal for analytical processing.

Third, the manufacturer of the vehicles and their owners and users can enjoy tremen-
dous benefits from using the system.

Finally, this, IoT provides an efficient communication and collaboration framework
for decision makers, the manufacturer’s organization, and the users of the purchased
equipment.

In this chapter, we elaborate on the technologies involved and the process of the IoT
operation. We also describe its major application in enterprises, homes, smart cities, and
autonomous (smart) vehicles.

13.2 ESSENTIALS OF IoT

The Internet of Things (IoT) is an evolving term with several definitions. In general,
IoT refers to a computerized network that connects many objects (people, animals, de-
vices, sensors, buildings, items) each with an embedded microprocessor. The objects
are connected, mostly wirelessly, to the Internet forming the IoT. The IoT can exchange
data and allow communication among the objects and with their environments. That is,
the IoT allows people and things to be interconnected anytime and anyplace. Embedded
sensors that collect and exchange data make up a major portion of the objects and the
IoT. That is, IoT uses ubiquitous computing. Analysts predict that by the year 2025, more
than 50 billion devices (objects) will be connected to the Internet, creating the backbone

http://cnhindustrial.com/en-us/pages/homepage.aspx

690 Part IV • Robotics, Social Networks, AI and IoT

of IoT applications. The challenges and opportunities of this disruptive technology (e.g.,
for cutting costs, creating new business models, improving quality) are discussed in an in-
terview with Peter Utzschneider, vice president of product management for Java at Oracle
(see Kvitka, 2014). In addition, you can join the conversations at iotcommunity.com.
For Intel’s vision of a fully connected world, see Murray (2016).

Embedding computers and other devices that can be switched on and off into ac-
tive items anywhere and connecting all devices to the Internet (and/or to each other)
permit extensive communication and collaboration between users and items. By con-
necting many devices that can talk to each other, one can create applications with new
functionalities, increase the productivity of existing systems, and drive the benefits dis-
cussed later. This kind of interaction opens the door to many applications. For business
applications of the Internet of Things, see Jamthe (2016). In addition, check the “Internet
of Things Consortium” (iofthings.org) and its annual conferences. For an infographic
and a guide, see intel.com/content/www/us/en/internet-of-things/infographics/
guide-to-iot.html.

Definitions and Characteristics

There are several definitions of IoT.
Kevin Ashton, who is credited with the term the “Internet of Things,” provided the

following definition: “The Internet of Things means sensors connected to the Internet
and behaving in an Internet-like way by making open, ad hoc connections, sharing data
freely, and allowing unexpected applications, so computers can understand the world
around them and become humanity’s nervous system” (term delivered first in a 1999 oral
presentation. See Ashton, 2015).

Our working definition is:
The IoT is a network of connected computing devices including different types of

objects (e.g., digital machines). Each object in the network has a unique identifier (UID),
and it is capable of collecting and transferring data automatically across the network.

The collected data has no value until it is analyzed, as illustrated in the opening
vignette.

Note that the IoT allows people and things to interact and communicate at any time,
any place, regarding any business topic or service.

According to Miller (2015), the IoT is a connected network in which:

• Large numbers of objects (things) can be connected.
• Each thing has a unique definition (IP address).
• Each thing has the ability to receive, send, and store data automatically.
• Each thing is delivered mostly over the wireless Internet.
• Each thing is built upon machine-to-machine (M2M) communication.

Note that, in contrast with the regular Internet that connects people to each other
using computing technology, the IoT connects “things” (physical devices and people) to
each other and to sensors that collect data. In Section 13.4, we explain the process of IoT.

SIMPLE EXAMPLES A common example of the IoT is the autonomous vehicle (Section 13.9).
To drive on its own, a vehicle needs to have enough sensors that automatically monitor the
situation around the car and take appropriate actions whenever necessary to adjust any set-
ting, including the car’s speed, direction, and so on. Another example that illustrates the IoT
phenomenon is the company Smartbin. It has developed trash containers that include sen-
sors to detect their fill levels. The trash collection company is automatically notified to empty
a trash container when the sensor detects that the bin has reached the fill level.

http://iotcommunity.com

http://intel.com/content/www/us/en/internet-of-things/infographics/guide-to-iot.html

http://intel.com/content/www/us/en/internet-of-things/infographics/guide-to-iot.html

Chapter 13 • The Internet of Things as a Platform for Intelligent Applications 691

A common example people give to illustrate IoT is the idea that a refrigerator could
automatically order food (e.g., milk) when it detects that the food has run out! Clorox
introduced a new Brita filter so that a Wi-Fi–enabled mechanism can order water filters by
itself when it detects that it is time to change them. In these examples, a human does not
have to communicate with another human or even with a machine.

IoT IS CHANGING EVERYTHING According to McCafferty (2015), the IoT is changing
everything. This has been verified by a 2016 survey reported by Burt (2016). For how
manufacturing is revolutionized by IoT, see Greengard (2016). Here are a few examples
that he provided:

• “Real-time systems make it possible to know where anyone is at any moment,
which is helpful to secured locations as military bases and seeking to push promo-
tions to consumers.”

• “Fleet tracking systems allow logistics and transport firms to optimize routing, track
vehicle speeds and locations, and analyze driver and route efficiencies.”

• “Owners and operators of jet engines, trains, factory equipment, bridges, tunnels,
etc., can stay ahead of repairs through machines that monitor for preventive main-
tenance.” (opening case)

• “Manufacturers of foods, pharmaceuticals and other products monitor temperature,
humidity and other variables to manage quality control, receiving instant alerts
when something goes wrong.”

These changes are facilitated by AI systems, which enhance analytics and automate or
support decision making.

The IoT Ecosystem

When billions of things are connected to the Internet with all the supporting services
and connected IT infrastructure, we can see a giant complex, which can be viewed as a
huge ecosystem. The Internet of Things ecosystem refers to all components that en-
able users to create IoT applications. These components include gateways, analytics, AI
algorithms, servers, data storage, security, and connectivity devices. A pictorial view is
provided in Figure 13.1 in which applications are shown on the left side and the building
blocks and platforms on the right side. An example of an IoT application is provided in
the opening vignette. It illustrates a network of sensors that collects information, which
is transmitted to a central place for processing and eventually for decision support. Thus,
the IoT applications are subsets of the IoT ecosystem.

A basic discussion, terms, major companies, and platforms is provided by Meola
(2018).

Structure of IoT Systems

Things in IoT refers to a variety of objects and devices ranging from cars and home
appliances to medical devices, computers, fitness tracers, hardware, software, data,
sensors, and much more. Connecting things and allowing them to communicate is a
necessary capability of an IoT application; but for more sophisticated applications,
we need additional components: a control system and a business model. The IoT en-
ables the things to sense or be sensed wirelessly across the network. A non-Internet
example is a temperature control system in a room. Another non-Internet example is
a traffic signal at intersections of roads where camera sensors recognize the cars com-
ing from each direction and a control system adjusts the time for changing the lights
according to programmed rules. Later, we will introduce the reader to many Internet-
based applications.

692 Part IV • Robotics, Social Networks, AI and IoT

IoT TECHNOLOGY INFRASTRUCTURE From a bird’s-eye view, IoT technology can be
divided into four major blocks. Figure 13.2 illustrates them.

1. Hardware: This includes the physical devices, sensors, and actuators where data
are produced and recorded. The devices are the equipment that needs to be con-
trolled, monitored, or tracked. IoT sensor devices could contain a processor or any
computing device that parses incoming data.

Internet
of Things

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FIGURE 13.1 The IoT 2016 (Ecosystem).

Chapter 13 • The Internet of Things as a Platform for Intelligent Applications 693

2. Connectivity: There should be a base station or hub that collects data from the
sensor-laden objects and sends those data to the “cloud” to be analyzed. Devices are
connected to a network to communicate with other networks or other applications.
These may be directly connected to the Internet. A gateway enables devices that are
not directly connected to the Internet to reach the cloud platform.

3. Software backend: In this layer, the data collected are managed. Software back-
end manages connected networks and devices and provides data integration. This
may very well be in the cloud.

4. Applications: In this part of IoT, data are turned into meaningful information.
Many of the applications can run on smartphones, tablets, and PCs and do some-
thing useful with the data. Other applications can run on the server and provide
results or alerts through dashboards or messages to the stakeholders.

To assist with the construction of IoT systems, one may use IoT platforms. For informa-
tion, see Meola (2018).

IoT Devices Applications

Internet
Network

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ata

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is

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Cloud-Based Storage & Computing

Gateway

FIGURE 13.2 The Building Blocks of IoT.

694 Part IV • Robotics, Social Networks, AI and IoT

IoT PLATFORMS Because IoT is still evolving, many domain-specific and application-
specific technology platforms are also evolving. Not surprisingly, many of the major
vendors of IoT platforms are the same ones who provide analytics and data storage
services for other application domains. These include Amazon AWS IoT, Microsoft
Azure IoT suite, Predix IoT Platform by General Electric (GE), and IBM Watson
IoT platform (ibm.com/us-en/marketplace/internet-of-things-cloud). Teradata
Unified Data Architecture has similarly been applied by many customers in the IoT
domain.

u SECTION 13.2 REVIEW QUESTIONS

1. What is IoT?
2. List the major characteristics of IoT.
3. Why is IoT important?
4. List some changes introduced by IoT.
5. What is the IoT ecosystem?
6. What are the major components of an IoT technology?

13.3 MAJOR BENEFITS AND DRIVERS OF IoT

The major objective of IoT systems is to improve productivity, quality, speed, and the
quality of life. There are potentially several major benefits from IoT, especially when
combined with AI, as illustrated in the opening case. For a discussion and examples, see
Jamthe, 2015.

Major Benefits of IoT

The following are the major benefits of IoT:

• Reduces cost by automating processes.
• Improves workers’ productivity.
• Creates new revenue streams.
• Optimizes asset utilization (e.g., see the opening vignette).
• Improves sustainability.
• Changes and improves everything.
• May anticipate our needs (predictions).
• Enables insights into broad environments (sensors collect data).
• Enables smarter decisions/purchases.
• Provides increased accuracy of predictions.
• Identifies problems quickly (even before they occur).
• Provides instant information generation and dissemination.
• Offers quick and inexpensive tracking of activities.
• Makes business processes more efficient.
• Enables communication between consumers and financial institutions.
• Facilitates growth strategy.
• Fundamentally improves the use of analytics (see the opening vignette).
• Enables better decision making based on real-time information.
• Expedites problem resolution and malfunction recovery.
• Supports facility integration.
• Provides better knowledge about customers for personalized services and marketing.

http://ibm.com/us-en/marketplace/internet-of-things-cloud

Chapter 13 • The Internet of Things as a Platform for Intelligent Applications 695

Major Drivers of IoT

The following are the major drivers of IoT:

• The number of “things”—20 to 50 billion—may be connected to the Internet by
2020–2025.

• Connected autonomous “things”/systems (e.g., robots, cars) create new IoT
applications.

• Broadband Internet is more widely available, increasing with time.
• The cost of devices and sensors is continuously declining.
• The cost of connecting the devices is decreasing.
• Additional devices are created (via innovations) and are interconnected easily

(e.g., see Fenwick, 2016).
• More sensors are built into devices.
• Smartphones’ penetration is skyrocketing.
• The availability of wearable devices is increasing.
• The speed of moving data is increasing to 60 THz.
• Protocols are developing for IoT (e.g., WiGig).
• Customer expectations are rising; innovative customer services are becoming a

necessity.
• The availability of IoT tools and platforms is increasing.
• The availability of powerful analytics that are used with IoT is increasing.

Opportunities

The benefits and drivers just listed create many opportunities for organizations to excel in
the economy (e.g., Sinclair, 2017), in many industries and in different settings.

McKinsey Global Institute (Manyika et al., 2015) provides a comprehensive list of
settings where IoT is or can be used with examples in each setting. A 2017 study (Staff,
2017) revealed a dramatic increase in the capabilities and benefits of IoT.

HOW BIG CAN AN IoT NETWORK BE? While there will be billions of things connected to
the Internet soon, not all of them will be connected in one IoT network. However, an IoT
network can be very large, as we show next.

Example: World’s Largest IoT Is Being Built in India (2017)

This network is being constructed by Tata Communications of India and HP Enterprises
(HPE) of the United States, over the HPE Universal IoT Platform. The things to be con-
nected exist in 2,000 communities and include computing devices, applications, and IoT
solutions, connected over the Lo Ra network, a wireless communication protocol for
wide area networks. The things are in smart buildings, utilities, university campuses, se-
curity systems, vehicles and fleets, and healthcare facilities.

The project is to be implemented in phases with proof-of-concept applications to be
tested first. The network will bring services to 400 million people. For details, see Shah (2017).

u SECTION 13.3 REVIEW QUESTIONS

1. List the benefits of IoT for enterprises.
2. List the benefits of IoT for consumers.
3. List the benefits of IoT for decision making.
4. List the major drivers of IoT.

696 Part IV • Robotics, Social Networks, AI and IoT

13.4 HOW IoT WORKS

IoT is not an application. It is an infrastructure, platform, or framework that is used to
support applications. The following is a comprehensive process for IoT applications. In
many cases, IoT follows only portions of this process.

The process is explained in Figure 13.3. The Internet ecosystem (top of the figure)
includes a large number of things. Sensors and other devices collect information from the
ecosystem. The collected information can be displayed, stored, and processed analyti-
cally (e.g., by data mining). This analysis converts the information into knowledge and/or
intelligence. Expert systems or machine learning may help in turning the knowledge into
decision support (made by people and/or machines), which is evidenced by improved
actions and results.

The generated decisions can help in creating innovative applications, new business
models, and improvements in business processes These result in “actions,” which may
impact the original scenario or other things. The opening vignette illustrates this process.

Note that most of the existing applications are in the upper part of the figure, which
is called sensor to insight, meaning up to the creation of knowledge or to the delivery of
new information. However, now, the focus is moving to the entire cycle (i.e., sensor to
action).

The IoT may generate a huge amount of data (Big Data) that needs to be analyzed by
various business intelligence methods, including deep learning, or advanced AI methods.

IoT and Decision Support

As stated earlier, the IoT creates knowledge and/or intelligence, which is submitted as
support to decision makers or is inputted to automated decision support entities. The
transition from data collection to decision support may not be simple due to the large
amount of data, some of which are irrelevant. Large-scale IoT usually needs to filter the

Sensors

Information flow

Collected Stored Transferred

Wireless Systems

Analysis, Mining, Processing
Intelligence,
Knowledge

Machine
learning

Decision
making

Innovation
New business model

Improvements
Actions

Other ‘things’, other systems

‘Things’

Internet

People and/or
machines

The Internet Ecosystem
Wireless

iPaq Wireless
Laptop

Wireless
Desktop

Wireless Print
Server

Router/Wireless
Access Point

Wired Laptop

Wired Desktop

Cable/DSL
Modem

INTERNET

FIGURE 13.3 The Process of IoT.

Chapter 13 • The Internet of Things as a Platform for Intelligent Applications 697

collected data and “clean” them before they can be used for decision support, particularly
if they are used as a base for automated decision making.

u SECTION 13.4 REVIEW QUESTIONS

1. Describe the major components of IoT.
2. Explain how the IoT works following the process illustrated in Figure 13.3.
3. How does IoT support decision making?

13.5 SENSORS AND THEIR ROLE IN IoT

As illustrated in the opening vignette to this chapter, sensors play a major role in IoT by
collecting data about the performance of the things that are connected to the Internet and
monitoring the surrounding environment, collecting data there too if necessary. Sensors
can transmit data and sometimes even process it prior to transmission.

Brief Introduction to Sensor Technology

A sensor is an electronic device that automatically collects data about events or changes
in its environment. Many IoT applications include sensors (see the opening vignette). The
collected data are sent to other electronic devices for processing. There are several types
of sensors and several methods for collecting data. Sensors often generate signals that are
converted to human-readable displays. In addition to their use in IoT, sensors are essen-
tial components in robotics and autonomous vehicles. Each sensor usually has a limit on
the maximum distance that it can detect (nominal range). Sensors of a very short range
known as proximity sensors are more reliable than those that operate in larger ranges.
Each IoT network may have millions of sensors. Let us see how sensors work with IoT in
Application Case 13.1.

The Problem

Over 20 million passengers use the airport annually,
and their number increases by more than 10 percent
every year. Obviously, the number of flights is large
and also increasing annually. The growth increases
air pollution as well. The airport has a strong com-
mitment to environmental protection, so manage-
ment has looked for an environmental control solu-
tion. The objective was to make the airport carbon
neutral. The large number of planes in the air and
on the ground and the fact that airplanes frequently
move require advanced technologies for the solution.

The Solution

A reasonable way to deal with moving airplanes
was to use IoT, a technology that when combined

with AI-based sensors enables environmental moni-
toring, analysis, and reporting, all of which provide
the background information for decisions regarding
minimizing the air pollution.

Two companies combined their expertise for
this project: EXM of Greece, which specializes in IoT
prediction analytics and innovative IoT solutions, and
Libelium of the United States, which specializes in
AI-related sensors, including those for environmental
use. The objective of the project was to properly mon-
itor air quality inside and outside the airport and to
identify, in real time, the aircraft location on the ground
and to take corrective actions …