As far as coining buzz phrases goes, being the originator of the "internet of things" (IoT) puts you up there with the best. There’s something wonderfully obtuse about the phrase; no one uses "things" – it’s too vague and untechnical – and yet, as a descriptor, it is both charming and memorable.
Kevin Ashton chose his words well. Now based in Austin, Texas, and with an enviable track record as a tech innovator and entrepreneur, he – and his nascent idea – originated in more familiar UK marketing territory.
Kevin Ashton took a research lab at MIT from a converted broom cupboard to a global organisation, with six labs around the world, 103 corporate sponsors, and more than 100 researchers. Then he did it again with three tech start-ups. In 2009 he co-founded and became chief executive of a clean-tech company, Zensi, which within nine months was acquired for an eight-figure sum by Belkin.
In fact, it seems somewhat incongruous that the IoT first began life on that most uninspiring of communication media: a PowerPoint presentation. Back then, in 1999, it was about looking into the future; now it’s very much the here and now.
"I was assistant brand manager at Procter & Gamble. I had an idea that no one understood. I kept making PowerPoint presentations, and ‘the internet of things’ was the title, and people liked it. It stayed as a PowerPoint for many years," explains Ashton.
It was, however, the start of his vision of a system in which sensors connected the internet to the physical world. Even though it was consigned to little more than a thought-provoking internal presentation for some time, Ashton sensed it was the "tip of a very big iceberg".
"I was working at P&G, and we launched a lipstick, and the most popular colour was never in stock," he says. The disparity between the success of the marketing campaign and the reality of what was available in store was key to Ashton’s thinking, although he insists it was broader than just a supply-chain issue.
"Everyone’s mind shuts off when you say supply chain. At P&G, it was about making sure the business was successful. The first time it hit me was when I was in Tesco and my product wasn’t on the shelf. Even with the best advertising in the world, if the product is not on the shelf, it won’t be bought, or people will go to a rival product. So you can get excited about creative advertising and how wonderful the direct marketing was, but the basics were about buying the product," adds Ashton.
The PowerPoints paid off and P&G gave Ashton a budget, although he admits he didn’t necessarily know what he was doing in the early days. "I was only 27 at the time, quite junior. But I got some money to start tests," he says. Initially, as he reached out to different tech companies, exploring what they were developing that might make his idea a reality, he was generally met with two responses. There were those that claimed they could do it, but then pointed him in the direction of an existing thing that didn’t do the job, or those that simply told him it was impossible.
Businesses are information hoarders, and they don’t throw anything away. They should. And consumers should say: ‘You can have it, but only for this occasion.’.
Ashton decided that it was time to go to academia for a solution. "MIT in the US was thinking about this and thought it was important and it offered me a job. Four years later, we’d solved the problem, and then I was involved with various tech start-ups."
At MIT, Ashton co-founded an RFID research consortium called Auto-ID Center. As more sponsors were brought to the table, additional labs were started in other universities around the world.
When the system was developed, MIT licensed it to not-for-profit standards body GS1. Subsequently, Ashton became a high-tech entrepreneur, working with various start-ups – including Zensi, an energy-sensing company that was then acquired by Belkin International – to apply the IoT to a range of markets.
Saving the planet?
The IoT has had interesting ramifications in the area of energy conservation, and this led to Ashton working with British Gas. "Generally, consumers are wasting a tiny amount many, many times. We leave the lights on and don’t turn off the TV, and it all adds up. It means it’s hard to notice and do anything about. But if we see how much it’s all adding up to, next time we’ll turn the lights off if we’re not in the room. So by shaving off these little bits of waste, you end up with a big saving," he explains.
"The constraints for [companies like] British Gas are that cities are getting more crowded and we can’t keep generating more electricity. They can only do so many more transmission lines, therefore they reach a point where people have to use less. And a company like British Gas wants to sell things other than gas. There are interesting things it can do, if it knows how people use it," adds Ashton.
But as everyone gets carried away with connectivity, is there a risk that the IoT will be used to find solutions to problems that don’t exist? Absolutely not, argues Ashton.
"There’s an assumption underneath that I refute. It’s that you can sell people things they don’t need – you can’t. People aren’t that stupid. There’s a lot we can do better. We waste water, electricity, rubbish, we don’t look after our bodies. There are thousands of things we can generally make better and improve our quality of life."
On privacy and national security
One of the thorny issues to which the IoT draws attention is how comfortable people are with the increased traffic in their data that such connectivity leads to. In the post-Edward Snowden era, are consumers more aware, and therefore more cautious, about how their data is used?
"The privacy issue is easy: everyone should have a choice," says Ashton. "You should be able to decide if you want that benefit. It’s an exchange, and people have a choice. Privacy issues happen only when there’s no choice. As a company, I have to keep your information secure. We’re getting much better about this. When you think about the level of information – most is secure, most of the time. And companies shouldn’t keep information any longer than they need to. Destroy it as soon as you don’t need it."
He adds: "On the issue of national security, they are saying, ‘We are the government, so you must give us this information.’ But companies can say ‘no’ if their policy is to destroy information after a month, as they don’t have [the information]. But businesses are information hoarders, and they don’t throw anything away. They should. And consumers should say: ‘You can have it, but only for this occasion.’"
Ashton believes the next generation will be more sophisticated about data – just as we’ve seen the changes from the 1970s when, for example, parents freely smoked around their children, didn’t wear seat belts and indulged in drinking and driving. "Now we wouldn’t dream of doing that. It’s the equivalent of seat belts and airbags for data. It will get built in, and we will learn from it," he says.
What's next for the internet of things?
So in which area does Ashton see the IoT developing next? "I’m not very good at predicting the future. I started in lipstick and selling stuff and then realised [there was a role] in energy and water, and more recently the interest has been in health, fitness and human-being aspects," he says. "Today, if you’re really sick, you go to hospital and they will measure things, but the solution to cheaper healthcare is to wear [devices] and measure all the time, so you can nip it in the bud earlier. So it started with lipstick and crisps, and now it’s in electricity, water, gas…"
Overall, however, Ashton sees the opportunities that the IoT can offer companies as huge. "Marketing is not just about communications and advertising. The internet of things for companies is about what information services they can sell," he says.
So just as a company such as Nike has expanded from being a sports-shoe manufacturer into a community for runners, aggregator and sharer of personal performance data, and hub of all things fitness-related, so, too, the opportunities open up for companies in other fields to shift from product to service, and in the process gain new, and potentially more loyal, customers.