Big Data and the Internet of Things (IoT);  two of the hottest topics in the tech world.   Is this a productive symbiosis or an evil twins situation?  Current estimates suggest around 2.5 Exabytes (an Exabyte is 1bn Gigabytes) of useable data per day are being generated.  That amount will only continue to grow, fed, not least, by the estimated 25 billion connected devices which will exist by 2018 (according to Gartner).  Kevin Ashton, who coined the phrase 'Internet of Things', has predicted that we will start measuring data in Zettabytes at some point during 2015.

Fans of the IoT are wildly excited by the possibilities, both about the uses and applications in everyday life – smart kettles, self-watering plants, smart fridges and the like - but also about the ways that the data and metadata generated by these devices can be exploited.  'Back to the Future II' may have got hoverboards by 2015 wrong but it was probably closer to the mark with the impact of connected technology on our lives.  The naysayers are concerned that the data generated  from connecting the world will make the sci-fi of 'Minority Report', set in 2054, a reality.

Realms of fantasy aside, there are a number of sectors which are either already making the most of connected data or are planning to do so in the very near future:

Smart government

A study carried out by SAS and UK think tank, the Centre for Economics and Business research, suggests that the UK government could use Big Data to save £2bn in fraud detection and £3.6bn through better rationalisation and management of processes.  Some of this will be achieved through data collected by connected devices but, at a more basic level, it is simply a question of data sharing.  The G8 countries signed up to an Open Data Charter in June 2013, with a view to opening up government data and making it useable for all.  The UK government's midata initiative, backed by leading businesses such as Google, Visa and British Gas, asked voluntary signatories to make consumer personal data available to consumers in a portable, useable format in a standard form.  It has not been entirely successful but it is likely to be reinforced if the proposed data portability rights are included in the EC data protection Regulation.

Smart cities

By 2020, it is predicted that 60% of connected devices will be devoted to monitoring or deliveringenergy and the IoT will be used in all areas of infrastructure from smart roads which use technology to regulate traffic flow, smart parking systems which will get all the traffic looking for somewhere to park off the roads quickly, to deployment of healthcare and emergency services.  The delivery of smart cities depends, of course, on adequate digital infrastructure.  See our article on Download – Optic Fibre, the new gold rush for more on this.

Smart transport

It is not just the infrastructure which is wising up.  A huge growth area for connected data is cars.  If completely driverless consumer cars are a long way off, far closer are cars which adjust seating automatically depending on the driver, which know not only when the petrol is low but will direct you to the nearest garage, which learn your favourite routes and redirect you if there's too much traffic and which understand the patterns of individual drivers and help them avoid accidents.  The most commonly cited advantages of driverless consumer cars are fewer accidents and greater fuel efficiency. The data won't, however, just be used to make the lives of drivers easier, but will also provide useful information to manufacturers.  Some changes are even mandated by legislation, for example, by 2018, all cars will be fitted with an e-Call chip which will call emergency services automatically in the event of a collision.  The government has just published a review of the regulations for automated vehicle technologies and will produce a code of practice for those wishing to test 'driverless' cars in the UK in spring 2015. It aims to conduct a review and amendment of any regulations required to enable further testing of automated vehicles, particularly in relation to safety, liability, data protection and regulations on vehicle use.

Smart homes

Connected home technology is one of the fastest growing areas of the IoT.  Nest, the connected home technology company, currently specialising in smart heating controls and smoke alarms, was Google's second largest acquisition at US$3.2billion and this is an increasingly crowded market with other high profile competitors including Hive, Tado and Honeywell.  Smart security, smart thermostats, connected appliances and smart lighting are at the forefront of smart devices in the home which tend to focus on convenience, remote operation and energy efficiency.  Again,while they can bring huge benefits to users, they also have enormous potential to generate and transmit both personal and anonymised data back to retailers which can be of wider use.  How much milk do you drink in a week?  Is your consumption going up or down?  Who is your milk supplied by and so on?  This is great news for supermarkets but might be more information than we're comfortable with them having.  Not only is there a data protection issue with smart homes but there is also a wider security concern and the prospect of someone hacking into your home, whether as a joke to wake you all up by turning on the lights at 3am, or to bypass your security system, is a real prospect.

Smart fashion

Wearable technology, while not always as fashionable as we may want, has enormous potential.  While it's true that Google glass was not an immediate hit, it is also fair to say that once manufacturers succeed in marrying usefulness with sartorial good taste at a reasonable price, wearables will really take off.  Beacon technology and RFID are becoming increasingly widely used in retail, using connected data to enhance consumer experience and facilitate sales.  For more on this, see our Fashion Tech special on Download.

Smart finance

The use of near field technology devices in payment processing is making contactless payment increasingly popular – it has even been adopted by London transport, ending the problem of how to buy a bus ticket when your Oyster card has run out of credit.  The current transaction limit of £20 is expected to be raised to £30 later in 2015, which is only likely to increase uptake.  

Google and Apple are leading the way in virtual wallets in the US.  While take up is still relatively low there, virtual wallets have had more success in Japan.  The pending recast Payment Services Directive (PSD2) proposals clear the way for greater take up of digital, electronic or mobile wallets in Europe – both from a consumer and a business perspective.  PSD2 offers the chance for third party payment providers to use logins from consenting consumers to provide financial snapshots and facilitate payments to merchants using frameworks such as Faster Payments and will also enhance how smaller merchants can embrace mobile point of sale (mPOS) technology to speed up transactions and reduce costs.

Smart insurance

Insurance is another area which will be looking to exploit connected data.  By harnessing live data from smart homes, insurers will be able to provide more tailored offerings and make more effective risk analyses.  This applies equally to car insurance and, potentially, to health insurance if data protection obstacles can be overcome.

Smart healthcare

From apps which tell you how many calories you're burning, to smart nappies which tell you, well, you know what they tell you, to smart carpets which know if a person has a heavy fall, to remote patient monitoring and medication management, the IoT is revolutionising healthcare.  This is both one of the most valuable applications of the IoT and the most sensitive in terms of the data it generates as medical data is sensitive personal data which is more strictly regulated than other types of personal data.  The Article 29 Working Party (comprising European data protection regulators) wrote to the European Commission in February 2015, to clarify what constitutes health data precisely because of the growth in its generation and use as smart healthcare takes off.

Governments and regulators are furiously trying to cope with the challenges of the smart world, to assess the threats and opportunities in areas like competition, innovation and privacy provided by connected data.  In February 2014 alone, the Competition and Markets Authority put out a call for information on the way in which businesses use consumer data and the Treasury launched a consultation on use of data sharing and open data in banking.  Regulators are keen not to stifle innovation but also want to make sure that individuals are protected (see The Internet of Things and privacy in Europe and the USA).  In order to sell the IoT to consumers and feed the Big Data beast, a balance will need to be found.