The foundation and the idea of the IoT were founded already in the late 80-90s. In particular, RFID had an important role in the development of IoT. In fact, the term IoT was created in an RFID and NFC context.
• RFID: Radio Frequency Identification
• NFC: Near Field Communication
RFID is a process where elements, such as a credit card, communicate through radio waves. NFC is a special subgroup within RFID technology. NFC is a high-frequency branch of RFID. For convenience, we will refer to the technology as RFID in the rest of this article.
The origin of IoT goes beyond just RFID. Think of machine-to-machine (M2M) networks, such as ATMs linked to "interbank networks", just like sales terminals where you pay with ATM cards. ATM card is issued by a bank, credit union or other financial institution for the purposes of carrying out transactions. M2M solutions for ATMs have been around for a long time, just like RFID. The challenge is that IoT's history can be seen in the context of, for example, early forms of networks, connected devices and data, but it is not right to define them as IoT solutions.
The role and impact of RFID technology
In the nineties, technologies such as RFID, sensors and a few wireless application innovations led to the ability to several connect devices ("things") to the Internet. During this period, most implementations of RFID occurred within logistics; department store and in general supply chain. However, there were many challenges and obstacles to overcome such as for instance price.
Gradually, the use of RFID become popular in areas beyond logistics and supply chain management: from public transport, identification (from pets to people), electronic toll collection, access control and authentication, traffic monitoring, retail to (back then) innovative forms of outdoor advertising. The increasing use was driven by the decreasing cost of RFID codes, increasing standardization and NFC.
From RFID to IoT Visions
The possibility of tagging, tracking, connecting and “reading” and analysing data from objects went hand in hand with what would become known as the IoT around the beginning of the 2000s. It was obvious that the connection between different types of "things" and applications, as we saw them in RFID and in M2M, would (and will) change the Internet a lot.
It may be surprising that, for example, the vision of a shopping experience without barcode scanning and leveraging smart real-time information obtained via connected devices and goods goes back from before the term IoT even existed. The concept of internet connected refrigerators that will tell you when you need to buy milk etc are examples of this. Other examples are found in what is now known today as "smart cities" concepts.
But it is important that we do not reduce IoT to only popular and widely known concepts, although consumer-related attention has undoubtedly led to increased awareness of IoT.
Where does the term IoT come from?
According to a large majority of sources, the term "Things of Things" was coined in 1999 by Kevin Ashton, co-founder of MIT's Auto ID Center, where a standard for RFID was developed, mainly from a retail perspective.
Kevin Ashton wanted to solve a challenge:
" When shop shelves are empty, obviously no one can buy what’s supposed to be there."
This is a typical problem with logistics and for the supply chain. Kevin Ashton found the solution in RFID codes, but the problem was that it still was too expensive to put on each product. MIT Auto ID Center was launched, funded by major global retail brands, who understood the challenge and the obvious benefits of a solution, and Kevin Ashton became the executive director at that Center.
The IoT is now a reality
Several companies and segments are now taking tangible value benefits when using the power of IoT, but it will probably take the next decade, from 2020 onwards, before general uncertainties and misunderstandings about IoT are resolved, and that challenges in several areas will be solved by IoT. In this context, the years from 2017 to 2020 will be central. Today, when you want to briefly describe the development of the Internet: we are talking about "3 waves of the Internet":
• 1985-1999 (1st wave) - Building the internet / foundation of a world "online".
• 2000-2015 (2nd wave) - App and mobile revolution.
• 2016 ...... .. (3rd wave) - Internet of Things (IoT)