A Summary of the Difference between IoT and IoE according to ABI Research

Like many people, I hear a lot about the Internet of Things (IoT) and the Internet of Everything (IoE). Is IoT a different name for Machine to Machine (M2M)? When a new technology is introduced, its market is sometimes muddled with misinformation, some of it intentional. For example, products that were pushed with a certain keyword are now described with the new keyword of IoT because it sounds more advanced, which makes it look more competitive in the marketplace. The market confusion continues for some time until technologies and products mature. I think we are still in the confused market time.

The more I look at M2M, IoT, IoE, and the Industrial Internet of Things (IIoT), the more I get confused, because these terms are not well defined. I looked at many reports and articles and found that a whitepaper by ABI Research (Internet of Things vs. Internet of Everything – What’s the Difference?) solved my confusion the best. First, I summarized the paper in Japanese and think it might be useful to the English-speaking crowd to present a summary. Note that the whitepaper is available for free with registration.

Physical-first vs. Digital-first

We can list two categories of things in the world. One (physical-first) is objects and processes that do not generate or communicate digital data with other things without instrumentation. The other (digital-first) is something that is designed to generate and communicate digital data without further manipulation. This creates the Internet of Digital (IoD). Until recently, these two categories did not intersect each other, but they are beginning to, leading to the birth of IoE.

M2M and IoT

What is the difference between M2M and IoT? IoT is still a new buzzword and the difference between M2M and IoT may not be well known. Some companies have relabeled their M2M products as IoT, a new, sexier keyword. Can these terms, M2M and IoT, be used interchangeably? Is the IoT label just a marketing gimmick?

Regarding M2M, the ABI paper states:

1.      M2M connects physical-first entities in a point-to-point fashion and entities in the M2M market tend to be large and expensive devices and equipment. M2M entities are connected to backend computing systems. At the beginning, it is targeted B2B but will be for B2B2C.

2.      Furthermore, M2M connectivity-wise, vertical integration, according to each separate vertical market, is a norm and collected data are only shared (closed) in a specific market and applications. Such data and analytics on them are used for operational optimization.

As for IoT:

1.      IoT connects a physical-first entity with other entities via multiple points freely.

2.      The connectivity is established by several technologies, including cellular, wired, short-distance wireless, satellite, RFID and NFC. IoT can be implemented with many available technologies. Because of this, applications and services based on IoT can be designed and developed without a clear purpose in the first place. This make them easier to develop for many purposes and the cost tends to be more inexpensive, leading to wider applicable areas.

3.      Also, IoT is considered as a subsystem of IoE.

Internet of Humans (IoD)

In addition, ABI defines three subsystems of IoE: IoD, IoT, and IoH. Humans are situated between IoT and IoD and facilitate communications between the two. The interactions may be direct (humans input data) or indirect (automated). Initially, human intervention is necessary, but over time such intervention will decrease. For example, SNS will not work without humans inputting data in natural languages.

Three subsystems that make up IoE (Source: ABI Research, simplified by this author)

Internet of Everything (IoE)

IoE is the final stage of IoT and enables us to connect physical-first entities and humans with digital-first entities. The essence of IoE is data and how to generate values out of collected data. In other words, data generated by IoT, IoH, and IoD are processed with analytics to produce useful information for applications and services.

It will take about ten years to realize IoE. In ten to fifteen years, there will not be multiple Internets (general Internet, IoT, and IoE) but one single Internet. Any adjective like “smart” and “connected” will disappear from product descriptions because such features will be standard.

The size of IoE

Cisco projects that in the year 2020, the number of connected things will be 50 billion. ABI Research says that the number of connected entities in 2014 was 12.7 billion and will be 36.5 billion in 2020. This growth is hand-in-hand with the progress of sensor technologies.

My thoughts

Even though the ABI whitepaper is not a research paper and its discussion is kept at a high level, it is, in my opinion, easy to understand and clearly states what IoT is and what the difference between IoT and IoE is. In addition, there is another category, the Industrial Internet of Things (IIoT).

ABI says IIoT is part of IoT, focusing on industrial data as opposed to consumer market data. I could not find resources that clearly specify what IIoT is. In general, IoT assigns an IP address to anything and everything in this world and captures data generated by such an entity. The collected data are analyzed for useful information. In general, the target market is consumers. On the other hand, the same concept is applied to the industrial and enterprise market. From some point of view, IoT and IIoT may be considered at the same level.

In another view, IoT is a bigger concept and encompasses both consumer and industrial/enterprise markets. It appears that the overlapping areas between IoT and IIoT are small. But over time, the overlaps will increase, leading to more variety of data, bigger size, and a combination of batch and stream data. It would be more difficult to develop effective methods and analytics. The other side of the coin is that more useful and effective information will be produced for better operation and prediction in many fields.

Zen Kishimoto

About Zen Kishimoto

Seasoned research and technology executive with various functional expertise, including roles in analyst, writer, CTO, VP Engineering, general management, sales, and marketing in diverse high-tech and cleantech industry segments, including software, mobile embedded systems, Web technologies, and networking. Current focus and expertise are in the area of the IT application to energy, such as smart grid, green IT, building/data center energy efficiency, and cloud computing.

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