Tag Archives: Metcalfe’s Law

The IoT connects a cast of billions

Based on current estimates, the number of “things” predicted to be connected to the Internet by the end of this decade range from a staggering 30bn to 50bn. However, as Clint Witchalls notes in a recent report sponsored by ARM, having connected “things” is the easy part. More difficult will be getting these things to communicate with each other—where human involvement is still necessary.


“With the traditional Internet it was easy to ‘go it alone.’ Voice over Internet protocol (VoIP) start-ups did not first sit down with telecommunications operators and work out how they would fit together in the ecosystem,” Witchalls explains. “[In] contrast, the IoT tends to follow Metcalfe’s Law, which says that the value of a network is proportional to the square of the number of its users. Thus, a more cooperative approach than that shown in the past by telecoms and Internet companies will be required. Many users are needed to achieve the ‘network effects.'”

Kevin Ashton, who originally coined the term the “Internet of Things” (IoT) in 1999 while working at Proctor & Gamble, draws another clear distinction between the Internet and the IoT. As Ashton points out, the rollout of the traditional Internet happened relatively quickly, with companies granted access to a system that could interoperate before they had invested too heavily in systems that could not.

Since then, companies have built up their own networks, with significant investment. The challenge? To convince corporations to see the benefits in a common network. A simple example of one of these “walled gardens,” says Ashton, is employee office passes or ID badges, many of which are fitted with radio-frequency identification (RFID) tags. While swiping an ID card will get an employee into his or her workplace, the employee still has to fill out a form or wear an identity sticker when visiting a different office building. A common network between landlords could eliminate this inefficiency, while creating a much richer data set on employee whereabouts.

“What we have right now is a lot of IoT-type technology that is heavy on things and light on Internet,” Ashton confirms. “That’s [really] the bit that needs to change.”

Unsurprisingly, much of the collaboration currently under way within industry verticals is around standards, such as information-exchange protocols. According to Elgar Fleisch, the deputy dean of ETH Zürich, there is an extensive standardization effort going on.

“The main impact of standardization is that every computer can talk to every other computer and everything can talk to every other thing,” he says. “That dramatically reduces the cost of making things smart. The IoT will not fly if we don’t have these standards.”

Clearly, the full potential of the IoT will only be unlocked when small networks of connected things, from cars to employee IDs, become one big network of connected things extending across industries and organizations. Since many of the business models to emerge from the IoT will involve the sale of data, an important element of this will be the free flow of information across the network.

Interested in learning more about the rapidly evolving IoT? Part one of this series can be read here, part two here and part four here.