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The Internet of Things (IoT) (see Key Term) is one factor that has contributed to digital disruption. Understood as connectivity technologies where devices are joined up, the IoT ecosystem relies on sensors such as barcodes and RFID tags (radio-frequency identification) within a WiFi zone. From this it can identify physical properties such as: Are there people in the building? How is your health? Is your heart beating at the usual rate? What's the date on the barcode? What's the thermostat temperature? This is combined with autonomous machines being accessed via a remote control source such as an app on your phone or your wearable device.

Having identified the tags and what's happening means that we are more intelligently using the data. One commonplace example is a Satnav system that finds the fastest way to your destination, suggesting alternatives routes to avoid congestion. Some Satnav systems have greater connectivity where marketing is involved, showing the nearest Starbucks, BP petrol station or McDonald's.

IoT has developed dramatically in healthcare and medical devices, such as pacemakers that can be adjusted while the patient is at home and the cardiac consultant is in their office. This does scare some people (what if it goes wrong?) and there have been rumours about issues with US presidents and their pacemakers being hacked!

In domestic situations we are already witnessing the start of how the IoT is developing, with devices like Google Home and Amazon Alexa that can connect to lighting, heating and security within the house. This means if you leave the house and can't remember if you left the lights on or not, you can check the app and switch off the lights. Equally if you're arriving back late, you can switch on the lights, the heating and the oven 10 minutes before you arrive home.

Figure 1.3 Consumer-centric IoT business models

Source: Verhoef et al., 2017, p. 5

Based on a discussion group, Professor Peter Verhoef and many colleagues explored consumer connectivity and they created a framework for a consumer-centric IoT, as shown in Figure 1.3. This is a simplistic matrix approach where they have used two variables – ecosystems and interactions – and from this identified four business models.

In ecosystems they have noted the idea of open and closed systems. For business model (I), which is a closed system with utility, they used Amazon Echo as the example. It is closed as it is only available in a specific geographic area, it is linked to an individual or family account and it may be passcode protected.

Open networks are available to others, such as the smart meters which are shown in model (II). This means that instead of the requirement to stay at home when the electricity, gas or water meter usage is checked and recorded by an engineer, this could happen remotely from the supplier's office. Model (II) facilitates better energy use as washing machines could be intelligently managed and switched on when there is less power usage on the grid, or timed to complete the wash cycle five minutes before the alarm clock goes off.

The group discussed levels of interaction between business and consumers. Business model (III) is a closed system for use by consumers. In this example, they used Nest, the technology company that enables consumers to connect devices and send commands remotely from an app to switch on the lights, measure the amount of heat, light and power used that month or check the security cameras.

Model (IV) explored consumers interacting with each other on a peer-to-peer basis. So if there is a day in your calendar when you are not using your car, one of your neighbours could rent or borrow it, and their example was Relay Rides, a firm that enables this functionality in the United States, similar to Airbnb, but for cars.

It is an interesting model, which, in a utopian world, would work well, but there may be privacy concerns about sharing your calendar with your neighbours – do you want them to know when you're away or at home all day?

Amazon Echo had challenges when initially launched as children were making purchases via their parents’ Amazon accounts. Amazon has solved this with the option to enter a passcode before confirming purchases. There are additional concerns about the devices being hacked so that snoopers can monitor your conversations. The difficulties ahead may be about the fear of use and potential misuse of systems, rather than the technology.

As the technology evolves and as we become more comfortable with its use and security improves, we could use the IoT in other ways, for example:

 Scanning food into the fridge, which will tell you what's needed for the menu that night before sell-by dates are reached – less food waste.

 Regular items automatically re-ordered as the supplies run low – better management of household goods.

 Changes in health or diet could trigger an automatic request for a medical check-up – proactive healthcare monitoring.