Marketing challenges emerged from consumers’ perception of security issues of the Internet of things

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Contents

Introduction

1. Theoretical Review

1.1 Concept of IoT

1.1.1 Definition

1.1.2 A Bit of History

1.1.3 Features and Characteristics of IoT

1.2 Current Situation

1.2.1 IoT Technologies

1.2.2 Types of Data in IoT

1.3 IoT in Future

2. Analytical Findings

2.1 How IoT Can Change Our Life

2.2 Top 10 Companies in IoT Field

3. Security and Privacy Challenges

3.1 IoT Enablers and Barriers

3.2. Research Results

3.3 Concerns and Vulnerabilities

3.4 Challenges of IoT: General Overview

3.5 Security Challenges for Companies

4. Marketing study

4.1 Study Context: company and market environment overview

4.1.1 Company overview

4.1.2 Connected devices (French market)

4.2 Study design

4.3 Qualitative study stage

4.3.1 General data security perception

4.3.2 Summary of data sharing particularities

4.3.3 Summary of specific data perceived value

4.4 Quantitative study stage

4.4.1 Orange Lab respondents data base properties

4.4.2 Connected Devices Experience

4.4.3 Consumers' security issues profiles

4.4.4 Application test results

4.4.5 Monadic tests results and options approval

4.4.6 Data Categories Features

4.5 Recommendations

Conclusion

References



Introduction

The trend of the Internet of things is now gaining more and more popularity. Having emerged in 1969, it has now firmly entered our lives. Of course, at the time of its emergence, it was not the same as now, but the technology has greatly evolved. Having passed the way from the development of the protocol TCP / IP, sending the first e-mail, the appearance of the Domain Name System (DNS), launch of the first IRC chat, the birth of the concept of the World Wide Web and the protocol HTTP, it all came to the colorful and comfortable image that we see today when opening browser and even turning on the modern phone.

And now the technology is not standing still, getting everything is farther and farther. From useless for the usual person toy it has now turned into an integral part of our life. Now, when the development of information technologies and data transmission is on the peak of usage, the Internet gets in habitual to us in everyday life of a thing. And this phenomenon by all means will become a new historical milestone for technologies.

The idea of “Internet of Things” (IoT) has been for some time exciting information and computer industry. Industrial automation is also beginning to explore and implement the concept and technology of the “Internet of things”. There are many terms related to this concept: machine-to-machine (M2M), “Internet of Everything”, “Internet of Things and “IP to the edge”. Kevin Ashton, the British pioneer of new technologies, is considered to be the inventor of the term “Internet of Things”, and it is assumed that it happened in 1999. Although in the literature the concept itself has been discussed since 1991. In 2008, IBM launched its initiative - Smart Planet. In the same year the movement for the distribution of IP-based technologies for communication between "smart" devices began.

The world of "Internet of Things" (IoT) is a world filled with intelligent sensors (analog and digital), as well as actuators (also analog and digital), communicating via IP-protocol to improve efficiency and productivity. This is a key Internet protocol that provides the delivery of packets from one host to another focusing solely on IP-addresses in the packet headers. There are a lot of applications of IoT, which can be improved with the help of sensors and control systems. They may be the application of health, traffic management, security vehicles, agricultural and industrial. This concept involves the joint use of sensors and control systems with "big data," and analysts to ensure a high level of optimization and efficiency.

The purpose of this study is to detect and to respond to marketing challenges emerged from consumers' perception of security / privacy issues of the Internet of Things

The object of the study is the Internet of Thing and the subject is its security and privacy issues hindering this technology adoption.

In order to achieve the given purpose and to examine the subject we need to perform the following tasks:

- To review the concept of the IoT, its current stage of development and experts' future forecasts

- To regard benchmarks of the companies successfully adopting the IoT into the business and building business based on IoT

- To study security and privacy issues from different points of view

- To perform marketing study to find marketing leverages of communication on connected devices security

Major hypothesis of the study - Security is the first reason hindering the smart devices adoption. Minor hypothesis are regarded in terms of Marketing study at the chapter 4.

Internet of Things is represented by objects which can be called connected, smart or intelligent devices. All terms are considered equal and can be used within this work.



1. Theoretical Review

1.1 Concept of IoT

It is not a secret that the concept of the Internet of Things is now being influenced strongly by developments in computing and network ubiquity and developments in the next generation Internet - and considered at all levels including United Nations (Lu, 2010).

In accordance with European Commission (2007) view European Commission (2007) From RFID to the Internet of Things - Pervasive networked systems, the Internet of Things viewed as a network for communicating devices and based upon four degrees of sophistication, involving:

• Purely passive devices (RFID) that yield fixed data output when queried;

• Devices with moderate processing power to format carrier messages, with the capability to vary content with respect to time and place;

• Sensing devices that are capable of generating and communicating information about environment or item status when queried;

• Devices with enhanced processing capability that facilitate decisions to communicate between devices without human intervention - introducing a degree of intelligence into networked systems.

1.1.1 Definition

According to Wikipedia, IoT refers to the interconnection of uniquely identifiable embedded computing-like devices within the existing Internet infrastructure. Typically, IoT is expected to offer advanced connectivity of devices, systems, and services that goes beyond machine-to-machine communications (M2M) and covers a variety of protocols, domains, and applications. The interconnection of these embedded devices (including smart objects), is expected to usher in automation in nearly all fields, while also enabling advanced applications like a Smart Grid (Wikipedia).

In Cloud Computing Glossary the Internet of Things (IoT) is an environment in which objects, animals or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. IoT has evolved from the convergence of wireless technologies, micro-electromechanical systems (MEMS) and the Internet (Cloud Computing Glossary, 2014). marketing business security

Kevin Ashton coins "Internet of Things" phrase to describe a system where the Internet is connected to the physical world via ubiquitous sensors (Evans, 2011). “I'm fairly sure the phrase “Internet of Things” started life as the title of a presentation I made at Procter &Gamble (P&G) in 1999” (Kevin Ashton in RFID Journal, 2009).

Alex Wood states that IoT is the networked interconnection of everyday objects with embedded computers, sensors and actuators (Wood, 2015). Vongsingthong and Smanchat (2014) give another definition to this term. They claim that the Internet of Things (IoT) is a concept originally coined and introduced by MIT, Auto-ID Center and intimately linked to RFID and electronic product code (EPC) (Vongsingthong, Smanchat, 2014).

According to CISCO reports, “In 2008, the number of devices connected to the Internet exceeded the number of people on Earth. By 2020, there will be 50 billion devices connected” (CISCO, 2014). National Intelligence Council reports that IoT is one of six civil technologies with potential to enhance or degrade US power over the next fifteen years” (National Intelligence Council, 2008).

However, the most appropriate definition is given by Michael Hogan who states that “Internet of Things (IoT) is an integrated part of Future Internet and could be defined as a dynamic global network infrastructure with self configuring capabilities based on standard and interoperable communication protocols where physical and virtual `things' have identities, physical attributes, and virtual personalities and use intelligent interfaces, and are seamlessly integrated into the information network. In the IoT, `things' are expected to become active participants in business, information and social processes where they are enabled to interact and communicate among themselves and with the environment by exchanging data and information `sensed' about the environment, while reacting autonomously to the `real/physical world' events and influencing it by running processes that trigger actions and create services with or without direct human intervention. Interfaces in the form of services facilitate interactions with these `smart things' over the Internet, query and change their state and any information associated with them, taking into account security and privacy issues” (Hogan, 2014).

Figure 1 - The Main Concept of Internet of Things (Hogan, 2014)

According to Hogan (2014), IoT senses and identifies the physical world via sensing technology and intelligent devices, performs computations, processing and knowledge mining through networking, realizes interaction between people and things, things and things, achieves real time control of the physical world, precise management, and scientific decision makings (Hogan, 2014).

IoT involves sensing, networking, processing, security, and covers sensors/nodes/gateways, RFID, embedded systems, telecommunication equipment manufacturing and operation, software development and integration, and application services (Wood, 2015).

To sum up, we may conclude that IOT is concept of space in which all of the analog and digital worlds can be combined. It redefines our relationship with objects and properties, and the essence of the objects (Kranenburg, 2013).



1.1.2 A Bit of History

In 1926, Nikola Tesla in an interview for the «Collier's» magazine said that “… the future of radio will be transformed into a "big brain", all things will become part of a whole, and the instruments through which this will be possible will easily fit to your pocket” (Evans, 2011).

In 1990, a graduate of MIT, one of the fathers of the protocol TCP / IP, John Romkey created the world's first Internet thing. He connected his toaster to the network (Hцller, 2014).

In 1997, “The Internet of Things” was the seventh in the series of ITU Internet Reports originally launched in 1997 under the title “Challenges to the Network”. However, in 1999, Auto-ID Center founded in MIT 2003, EPC Global founded in MIT 2005, Four important technologies of the internet of things was proposed in WSIS conference (Hogan, 2015).

In 2008-2009, there was a transition from the “Internet people” to the “Internet of things”, that is, the number of objects connected to the network has exceeded the number of people. The first international conference of internet of things “The IOT 2008” was held at Zurich (Vongsingthong, 2014).

From any time, any place connectivity for anyone, we will now have connectivity for anything!

1.1.3 Features and Characteristics of IoT

Dave Evans (2011) outlines the following IoT features:

Ш Univocally identifiable and addressable objects

Ш Artificial Intelligence

Ш Architecture

Ш Geo-Localization

Ш Size Considerations

Figure 2 shows the connection of all parts of IoT.



Figure 2 - Features of Internet of Things (Vongsingthong, 2014)

Jamie Moss in her article "The internet of things: unlocking the marketing potential to The Guardian defines IoT characteristics such as:

Ш Event Driven

Ш Ambient Intelligence

Ш Flexible Structure

Ш Semantic Sharing

Ш Complex Access Technologies (Moss, 2015).

Figure 3 - Characteristics of Internet of Things (Moss, 2015)

However, IoT is also characterized as persuasive (embedded everywhere), ubiquitous (invisible), heterogenic (many technologies interact with each other) and scale (order of magnitude is higher than current Internet).

1.2 Current Situation

Today it is possible to identify a number of examples of successful implementation of this concept. In particular, fitness bracelets transmit information to mobile gadgets about the movement of the user, and the work of smart watches goes in conjunction with mobile phones, as well as the exchange of data between them.

Google Glasses are not just connected to the Internet, but through the elements of augmented reality they can show various information on glass mounted in a mini-screen (Evans, 2011).

Today, hardly anyone may be surprised by Internet television - even those who do not understand the technology in innovative trends. In areas such as logistics, trade, farm business and actively different sensors and sensors that transmit information on near the device are widely used (Mitchell, 2014). Vehicles connected to the Internet in real time can receive multimedia content, in particular, to play music from iTunes, to show the latest information on road conditions and weather conditions.

Also there are dog collars, which when connected to the Internet show information about the location of the pet. People are actively using the baby monitor, video surveillance systems that translate the image into a custom smartphone door peephole, level sensors smoke and air condition that can be managed online (Narayanan, 2014).

Brand SmartThings, which has recently entered into the South Korean giant Samsung, has been producing sensors and controllers that allow using a smartphone to control various devices in the home. Notifon Company produces devices that can teach any subject at home to send notifications to the mobile device owner P. Magrassi, T. Berg, A World of Smart Objects, Gartner research report R-17-2243, 12 August 2002..

And in the future there may be distribution of the Internet of things on a number of global systems (in particular, it will be applied in the intelligent systems used for traffic management). This will prevent traffic jams and accidents, and will form the basis of systems for waste disposal (Evans, 2011).

So, we may assume that Internet of things is not just a lot of different instruments and sensors, connected to each other by wired or wireless communication channels and Internet access.

It is closer integration of the real and virtual worlds in which communication is done between people and devices.

It is expected that in the future, 'things' will become active participants in business, information and social processes, where they can interact and communicate with each other by sharing information about the environment, responding to and influencing the processes occurring in the environment, without human intervention Same document..

1.2.1 IoT Technologies

According to Rob van Kranenburg (2013), Internet of Things is a "four-layer cake."

Level 1 is associated with identification of each object.

Level 2 provides a service-to-service customer needs (it can be regarded as its own network of "things", a particular example - the "smart home").

Level 3 is connected with urbanization of city life. This is concept of "smart city", where all the information that concerns the residents of this city contracts to a specific residential area in your house and neighboring houses.

Level 4 - the touch planet.

In other words, the Internet of Things can be viewed as a network of networks in which small connected networks form larger ones (Kranenburg, 2013).

Figure 4 - The Principle of Internet of Things (Kranenburg, 2013)

Needless to say that communication and interaction instruments need a common language. Cisco has carried out a thorough technical analysis, which showed that the IP could be adapted to the requirements of a new type of networks. In this case, the "Internet of Things" will receive the same benefits: interoperability, scalability and, most importantly, a single common language - which at one time made a complex array of public and private network into a single global communications network known as the Internet Olga Kharif (8 January 2014). "Cisco CEO Pegs Internet of Things as $19 Trillion Market". Bloomberg.com..

The concept of IoT is usually related to the development of two technologies. This radio frequency identification (RFID) and wireless sensor networks (WSN). That's what Wikipedia tells us.

Wireless sensor networks (WSN)

Wireless sensor network is a distributed, self-organizing network of multiple sensors (sensors) and actuators connected to each other via radio. Moreover, the coverage area of such a network can range from a few meters to several kilometers due to the ability to relay messages from one element to another.

This technology is used to solve many practical problems related to monitoring, control, and logistics etc.

Radio Frequency Identification (RFID)

RFID (Radio Frequency Identification) is a method of automatic identification of objects by means of radio signals which are read from or written to the data stored in the so-called transponders, or RFID-tags.

This technology is well suited for tracking the objects and obtaining some small amount of information from them. For example, if all the products have been equipped with RFID-tagged and refrigerator RFID-reader, he could easily monitor the shelf life of products, and we could, for example, going to work remotely look into the refrigerator and determine what to buy yet.

1.2.2 Types of Data in IoT

One of the most significant advantages of the Internet of things is its ability to extend opportunity for detailed study of the processes occurring in the real world. We know that the quiet whining sound of the engine of the car indicates its problems, the fan can be hammered home the dryer down. But until now we have not been able to understand the exact cause of these problems. Data have come to help us.

So, what is it? Data are raw numbers collected by sensors or a detailed analysis of predictable behavior. The term "large data", in turn, may refer to:

a) large amounts of data;

b) data packets that exceed the capabilities of traditional databases;

c) the software used to analyze the data packets, referred to in the first two definitions (Lu, 2010).

In recent years, there has appeared the common term "new data" - the so-called data, which we know, but we do not collect due to technical or economic problems.

There is also the concept of "fast data". This is the information that requires an immediate response, such as the signal coming from the equipment of the occurrence of peak periods.

The authors Zanella, Bui and Castellani in their article "Internet of Things for Smart Cities" for Internet of Things Journal define several types of data that are connected with IoT (Zanella et. al, 2014).

Status data

Generally, status data provide consumers and / or businesses with constant reporting, a kind of "electrocardiogram" stability of any technology. Status data are likely to become the most common and basic data type Internet of Things (IoT). Sensor indicating a vacant parking space, a signal warning about a traffic jam on the highway due to an accident that happened just - these are not all examples of how significant superficial and non-detailed status data may be.

Location data

Positioning is one of the basic functions of GPS. GPS is great, but it does not work well indoors, in public places, or in a fast-changing environment. Someone wants to track the movement of pallets and robotic forklift will be able to get information about them in real time. In agriculture, which may be one of the first to widely use the services of IoT, data about the location are widely used, because the owners of the equipment have to track its movement over a vast territory.

Information That You Can Use

It is considered to be as the data with the status of use follow-up. For example, buildings use 73% of the electricity produced in the country and its huge amount of up to 30% in accordance with the data of the Environmental Protection Agency of the USA, is used in vain. This occurs because the temperature sensors do not work, or someone forgets to turn off the lights. Systems of IoT will provide information about the status (for example: "The light is turned on"), the information about what happens if you do not change the situation (for example: "You will spend $ 132 on energy production for each light in the building"), and fast way change it (such as "Click here to solve this problem").

Some companies, such as Opower, have created systems that ensure the implementation of the first two steps mentioned above. But the third step - the call to action - is crucial. Successful IoT companies certainly have to link the information with the subsequent action.

Information That Your Thermostat Can Use

Note that such a technique (or hardware), as a "smart" thermostat or "smart" lighting devices cause consumers doubts about whether it can organize its work in such a way that in your home or office was really comfortable. Consumers are rightly skeptical of automation. Automation also poses safety problems.

However, automation is inevitable. Think of it as a personalized robotic device. Consumers themselves will control any process unless they decide to shift some functions on the machine. This may be considered as a separate class of data, as IoT devices will essentially combine status data and information about your personal behavior, in order to create a new information layer which can control automated systems.



Figure 5 - 5 Internet of Things - Defining Layers (Zanella, 2014)

One of the biggest areas where the use of data management automation will be implemented is support service. Nobody likes to customer support service. Consumers regularly complain about long waiting time and confusing procedures. Manufacturers are constantly worried that bad experience communication with customer support team would not become systematic. To avoid this, IoT can create an operational platform warning for manufacturers and suppliers of third-party services.

Pavel Marceux, The Internet of Things:. What does it mean for Businesses and Consumers?, 2014

1.3 IoT in Future

20-30 years ago people hardly assumed that in 2014 they would already be able to communicate with each other by pressing one button on the tiny device in a pocket. Experts assume that in the near future people will live together with robots. The robots will begin to perform generally hard routine work. And people will be partially robotized. Besides, artificial organs with electronic control actively will start being used, and prosthetics will become ordinary operation. Nanorobots will be able to get in a body of the person to deliver drugs directly to sick cells or for implementation of microoperations. And special sensors will be able to scan a state of health of the person in real time, transferring information to a cloud to which the attending physician will have access. All this will be able to increase life expectancy of people as much as possible. The mankind will constantly improve the software for robots, and in the IT industry there will be a large number of the companies which main area of work will be a development of programs for the robotized systems. Besides, people will live in the clever houses which are completely automated for comfort. The program of management of such house will be able to watch an expense of the electric power, water, food and other expendables. The person will care only of that on the corresponding bank account there was money.

Figure 6 - Statistical Data of Connected Devices per Person CISCO IBSG Report, April 2011.

In the future, the person will get rid of many daily cares, and also production of some things will disappear. Such industry perspective today as 3D will give the chance independently to create practically anything: from domestic utilities to construction blocks.

Figure 7 - Number of IoT Developers in 2014-2020

The number of connected devices is growing with an incredible speed. According to experts, in the coming years these trends will reverse the traditional processes in all spheres of human activity. According to the Gartner Report, which is not the first time engaged in research in the field of smart devices, in 2015 connected gadgets in the world will be $4.9 billion, and by 2020 this figure will increase by more than 5 times and will approximately comprise $25 billion devices. In addition, as reported by analysts of the same company, in the following year, profit from services related to the Internet of Things will be $69.5 billion, and by 2020 - $263 billion. The results of these studies indicate that very soon the usual gadgets will come to a new level of intelligence and communications capabilities (Kharif, 2014). As for the personal computer, experts claim that till 2045 such phenomenon can disappear completely. Personal computers will be succeeded by a huge variety of devices which will repeat all its functions and even more.

Figure 8 - Technology Roadmap of IoT SRI Consulting Business Intelligence Research



2. Analytical Findings

2.1 How IoT Can Change Our Life

The concept of the "Internet of things" appeared to reflect the increase in the number of intelligent, network support functions and to note the new products, the associated opportunities.

A number of things, which are now connected to the Internet, is more than the total number of people on the planet. And we will be rapidly approaching the 50 billion connected devices by the end of the decade. For manufacturing companies the effects of the Internet of Things are enormous.

According to the recently published report of McKinsey Global Institute http://www.mckinsey.com/insights/business_technology/the_internet_of_thing:

· “IoT has a total potential economic impact of $3.9 trillion to $11.1 trillion a year by 2025.

· Of the total potential economic value the IoT enables, interoperability is required for 40 percent on average and for nearly 60 percent in some settings.

· At the top end, that level of value--including the consumer surplus--would be equivalent to about 11 percent of the world economy (exhibit).

· IoT users (businesses, other organizations, and consumers) could capture 90 percent of the value that IoT applications generate.

· Potential impact on the economy could leave up to $2.3 trillion only for the global manufacturing industry.”

The emergence and development of the Internet of things are affected by the coincidence of market forces and parallel innovation in the field that allow you to create relevant product technology. In order to take advantage of this great wave of value creation opportunities, producers urgently need to rethink almost every aspect of activity - from creation of products to their operation and maintenance. Those who do not do this jeopardize their competitiveness (Lu, 2010).

According to Kevin Ashton (2009), Internet of Things is composed of three main components:

Ш combination of intelligent systems that support network functions of devices, products and other items;

Ш these things are connected like the Internet communication infrastructure;

Ш communication infrastructures are connected to the computing infrastructure that create new forms of value (Ashton, 2009).

The phrase "Internet of things" has appeared to describe the growing number of products connected to the Internet, and reflects new appropriate opportunities. However, this phrase does not help to understand the phenomenon and its consequences. Internet still remains a mechanism for transferring information. The transformation does not occur due to the Internet itself, but due to the changing nature of "things" - the items themselves (Hogan, 2014).

New features of intelligent supporting network have opened a new era of competition.

Things can get access and control environment. When it starts to rain, the car can close the window. Spare parts for cars can be placed to an object before the problem is noticed, because their condition is controlled. Remote control of real-time aircraft can provide troops with "eye in the sky" in order to avoid the risk (Figure 9).

Figure 9 - Interconnection of IoT Components (Hogan, 2014)

Suggestion that the Internet of Things will change everything is a dangerous oversimplification. As in the case of the Internet, intelligent, supporting network features things do create a whole new range of technical possibilities. However, the rules of competition and competitive advantages still remain. In the world of intelligent, supporting network features things understanding of the rules is needed more than ever.

Dave Evans, the main Futurist in CISCO, is sure that Internet of Things is a new stage in the development of the Internet that greatly enhances the collection, analysis and distribution of data, which a person can turn into information, knowledge and, ultimately, into wisdom. In this sense, the Internet of Things is of paramount importance. There are projects that clearly demonstrate its ability to bridge the gap between the rich and the poor, provide global resources to those who most need them, and help us to better understand our planet, to learn how to anticipate problems. However, there are factors that slow down the development of the Internet of things. (Evans, 2009).

2.2 Top 10 Companies in IoT Field

Many experienced technology companies that have helped shape the computer industry in the 80s and 90s, in recent years have not showed significant results against the background of how smartphones and tablets helped to rethink computing. Yet these companies can get a second chance in the next evolutionary stage of development of the Internet - in a segment of the Internet of Things, which has already managed to connect multiple devices to the network for home or business, and even entire cities.

Gartner Analyst Company reports that IoT-companies will have earned more than $309 billion by 2020. However, most of these will flow from the use of services. Gartner also predicts that by 2020, the Internet of Things will involve 26 billion devices, and they, as the experts Cisco state, will dominate in the Internet by 2018 "Gartner Says the Internet of Things Installed Base Will Grow to 26 Billion Units By 2020". Gartner. 12 Dec 2013.. Here is a list (in alphabetical order) the most hot, interesting and sensational IoT-start-ups, as well as several already well-established brands, which should manifest itself in 2015 Information obtained from wtvox.com.

1) Ayla Networks

Ayla Networks (https://www.aylanetworks.com) enables manufacturers and service providers to quickly and reliably connect to market products using the industry's first IoT Agile-platform. Leading device manufacturers, service providers and major retailers use the services of Ayla to quickly integrate a safe connect and analytics products without significant changes in the design or existing business models. Ayla Networks has applied the second round of financing ($14.5 million) to expand its business in China. Thanks to financial support from Cisco and SAIF Partners, manufacturers are beginning to understand how the possibility of quick response to the analytics of their connected products helps to improve business models and services.

2) BaseN

BaseN (https://www.basen.net/) founded in 2001 helps to discover new ways of gathering, processing, visualization and management of a huge number of big data in real time, which can improve the operations of many companies in various industries. BaseN Platform is highly adaptable and is easily spread in IoT, giving the flexibility to host a million things. Last year BaseN was present in the list of the 50 most promising companies of the CIO Review magazine.

3) Dropcam. Dropcam (https://www.dropcam.com/), the newly acquired by company Nest, is a startup that creates the best Wi-Fi-video camera for remote viewing on any device with Wi-Fi. Until 2012, Dropcam was developing software to integrate camera technology into other devices. Nevertheless, in order to develop it was necessary to start creating devices by themselves. So they hired some experts who developed the Flip camcorder from Cisco, and made Dropcam HD - one of the few cameras on the market at that time with a resolution of 720p. Resources of wealthy giants like Google make Dropcam future bright and cloudless.

4) Enlighted

Enlighted (http://www.enlightedinc.com/) provides intelligent lighting system for buildings, having caught customers like LinkedIn or the city of San Jose. Enlighted has created a sensor that reacts to people who collect information about surroundings in real-time and analytics on each light in the building, setting up such sensors to work effectively for the owner / operator of the building. The company has recently received funding in the fourth round of the $ 20 million, which increased the amount of total investment to $55.6 million.

5) Ericcson

Swedish international provider of communications technologies and services, being a world leader on the market, does not require special representation. About 40% of global mobile traffic passes through the network Ericsson (http://www.ericsson.com/), which has 2 billion users, and the company has correctly figured out the future of the Internet of Things. "The connected society"is one of the key guidelines of the company. Ericsson is trying to connect 50 billion devices by 2020, dedicating its annual conference IoT Conference in Sweden to this topic. Recent industry rumors say that Ericsson will be a key player in the market in 2015.

6) Jasper

Jasper (https://www.jasper.com/) is the pioneer and global leader in cloud platforms segment of the Internet of Things (IoT). The company offers dedicated IoT-platform, ready-made solution that allows companies and mobile operators of all sizes to develop successful services connected. Jasper Platform offers companies opportunities that are vital for successful IoT-business, including the management of mobile services, attracting interest in real-time, diagnostic support, invoicing and business automation. Jasper Platform Platform is deeply integrated into a network of mobile operators on six continents and can be easily customized for specific requirements of any company in any industry. In the last round of financing a startup was able to collect $50 million in the evaluation of a billion, which has made Jasper one of highly appreciated companies in the Internet of Things today.

7) Neura

Neura's (http://www.theneura.com/) goal is to become the "glue that combines Internet of things" by developing an open platform to connect objects, locations, people, and the network itself. Neura believes that the device and the ecosystem of devices should "understand the man." Smart devices will have to learn when to offer something and respond to instructions and understand the user with his actions instead of the programmed activation. This will help smart devices to understand the contextual elements, such as the difference of time zones, weather, and factors affecting the person. In April 2014 startup Neura received $2 million in funding to create the AI on the Internet of things.

8) Nordic

Nordic Company (http://www.nordicsemi.com/) specializes in wireless devices, connection of small capacity, focusing on performance and low cost. Their applications for end-users improve sports equipment, wireless voice and audio, as well as consumer electronics. Known for their quality and efficiency among developers, their products are particularly recommended for use with Bluetooth-technology. In the past year, Apple promoted iBeacon, based on Bluetooth, and Nordic, no doubt, will be developing, when this or any other IoT-technologies will be secured.

9) PubNub

PubNub (https://www.pubnub.com/) offers a global network in real time, which "solves the problem of large-scale connections in a practical way, giving IoT-companies the opportunity to concentrate on their business." PubNub has created and implemented a global network in real time from 14 data centers around the world. Consumers connect their devices to the PubNub with a single line of code, and then send and receive data with guaranteed delivery and delay of 0.25 seconds. PubNub solves the problem of the status of millions of devices, creating a real-time updates on each device (online / offline). PubNub connects on average 100 million units per month processing 50,000 transactions per second, with a peak load of 3 million transactions per second across the WAN. In summer 2013 in the second round of funding company received $11 million.

10) Sigfox

French startup Sigfox (http://www.sigfox.com/), founded in 2008, during the second round of funding has collected $32.1 million. A unique low-cost network operates in Spain, France, Russia and the UK. Sigfox is trying to enter the markets of 60 countries over the next five years. Neul and Weightless founders are nearest competitors of the company. In February 2015 Sigfox could get funding in the amount of $ 115 million from GDF SUEZ and Telefonica.



3. Security and Privacy Challenges

Due to the fast development of the Internet of Things the relevance of many of the issues relating to the protection of information transmitted between devices is increasing. Other important questions relate to legal and psychological problems that arise when a user interacts with the device. Implementation of the concept of the Internet of things gives rise to the need to resolve a number of technical issues (e.g. related to proper power detectors and sensors). It is obvious that their work will be carried out without connection to the mains, and in most cases they will not need batteries. However, they need to develop specific technologies; for example, it would be nice to learn how to get energy from wind or vibration.

3.1 IoT Enablers and Barriers

According to MacKinsey Global Institute Report The Internet of Things: Mapping the Value Beyond the Hype. MacKinsey Global Institute, 2015., IoT enablers are:

• Energy: issues such as energy harvesting and low-power chipsets are central to the development of IoT.

• Intelligence: devices should have capabilities such as context-awareness and inter-machine communication etc.

• Communication: new, smart multi-frequency band antennas, integrated on-chip and made of new materials are the communication means that will enable the devices to communicate.

• Integration: integration of smart devices into packaging, or better, into the products themselves will allow a significant cost saving and increase the eco-friendliness of the products.

• Interoperability: protocols for interoperability have to be standardized.

• Standards: open standards will be the key enablers for the success of the IoT. Sustainable. Fully global, energy-efficient communication standards that are security and privacy centered and use compatible or identical protocols ate different frequencies are needed (MacKinsey Report, 2015).

Jaydip Sen from TATA Consultancy Services assumes that the main barriers for Internet of Things may be:

• Governance: without an authority, it will be impossible to have a truly global IoT.

– No universal numbering system currently exists. EPC Global and Ubiquitous ID are two different, non-compatible ways of identifying objects.

– There is a need of keeping governance as generic as possible. One authority per field will certainly lead to overlap, confusion and competition between standards. Example: EPC Global architecture has a “single point of failure and control” where Verisign has the records of all the numbers, and can track where any object is.

– What would be the governance of the IoT is an open question. Will it be a state-led agency, or a group under the supervision of the UN, or an industrial consortium?

• Privacy and Security:

– Public acceptance of IoT will happen only when strong security solutions are in place.

– The standards must define different security features to provide confidentiality, integrity, or availability of services.

– The issues related to identity of people must be dealt with in politics and legislations.

3.2 Research Results

Hewlett-Packard Company conducted a research according to which the absolute majority of the safety devices of the Internet of things have critical vulnerabilities that could pose a threat to users (Hogan, 2014).

Today, a huge number of devices ranging from TVs and refrigerators, and ending with fire and alarm systems are connected to the Internet. Out of our homes it is the lighting system of the city, and a smart parking, and other automatic urban services. All this makes our life more comfortable and easier; however, it opens up limitless possibilities and a huge field for the break-in and use for their own purposes by intruders (Lu, 2010).

Figure 10 - The Growth of IoT (Lu, 2010)

The rapidity with which various gadgets enter the internet, shocked. In 2003, there was 0.08 device per person connected to the global network, according to statistics from Cisco. Already in 2010, smart phones and tablets, having proliferated, raised this value to 1.84 per inhabitant of the Earth. According to recent forecasts by Gartner, the number of devices connected to the Internet will grow to 26 billion, creating a huge burden on the overall security of the Internet of Things.

It is noteworthy that, according to HP, 70% of devices that have access to the Internet of things, threaten the security of their owners, having an average of 25 vulnerabilities, which can become the object of attention of hackers. The most common ones are: network services without encryption interface vulnerable, unprotected storage of confidential information, the lack of authentication, and others. So, already there are cases where criminals "infected" the whole network of home appliances, including televisions, media centers and even refrigerators that began sending unwanted messages and spam.

Today, it is no secret that the Internet of Things market is growing rapidly. Apple and Google offer a proprietary protocol combining all IoT components into a single system. As for Intel, the Rod O'Shea said that it is unlikely in the near future there will be even some single protocol, as the number of connected devices is growing, they are all different in functionality, design and thus require different protocols.

The main problem today is the lack of standards in this area, which makes it difficult to integrate the proposed solutions on the market and in many ways holds back the emergence of the new ones. As for the full functioning of such a network IoT requires the autonomy of all "things", i.e. sensors must learn to get energy from the environment, rather than working on batteries, as it is happening now. The presence of a huge network, which controls the world, the global open data and other features can have negative consequences.

3.3 Concerns and Vulnerabilities

Internet of Things brings us a lot of convenience, pleasure and benefits. However, Internet of Things poses serious challenges for information security.

Center for Digital Strategies outlines the following security concerns and vulnerabilities:

· Data about usage can reveal whether a person is present at home or not.

· Automated home system can be cracked into, allowing intruders entry into the home.

· Video feeds of homes allow attackers access to private information about individuals.

· Proliferating number of endpoints gives attackers multiple points of entry into previously tightly controlled industrial systems.

· Even attacking home systems to drive up electric consumption can bring down a grid.

· Hacking remote sensors in oilfields can bring flow of oil and gas to a halt.

· Commercial espionage will become much easier.

Scott Cadzow (2008) determines the main security device challenges of IoT as follows:

Ш Devices are not reachable. Most of the time a device is not connected.

Ш Devices can be lost and stolen. It makes security difficult when the device is not connected.

Ш Devices are not crypto-engines. Strong security is difficult without processing power.

Ш Devices have finite life. Credentials need to be tied to lifetime.

Ш Devices are transportable. Will they cross borders?

Ш Devices need to be recognised by many readers. What data is released to what reader? (Cadzow, 2008)

3.4 Challenges of IoT: General Overview

Security, privacy and inter-device compatibility are issues that CIOs are concerned about. There is a very good chance that the device can be remotely controlled, monitored, updated and maintained using remote management tools, sensors and predictive analytics that continually collect device data that can identify problems before they happen http://www.e-janco.com/Articles/2014/2014-05-09-Internet-of-Things-Challenges.html.

Figure 11- Internet of Things Top Challenges http://www.e-janco.com/Articles/2014/2014-05-09-Internet-of-Things-Challenges.html

In a recent study that Janco conducted findings showed that over 2/3rds of the concerns that CIOs, CFOs, and CEOs were concerned about data security, information privacy and compliance requirements. That on top of the potential for liability when IoTs are out in the public environment and they fail is a major issue that needs to be addressed.

According to Dave Evans (2011) the Internet of Things may face the following challenges:

Security

Security is a major challenge of IoT. If we are applying IoT in major parts of our life then it has become more important that security should be of very high level. For example, what good is a smart home if anyone can unlock your doors?

Presence Dedection

It is tough to find that when an IoT device goes offline and when an IoT device comes back online. So, it is an another challenge for IoT technology and it is very important to find the status of all IoT devices. It helps us to monitor well.

Figure 12 - Challenges for Industrial IoT System (Evans, 2011)

Signaling

In IoT connections, signaling is crucial phase for collecting and routing data between IoT devices or between IoT device and server. In that way, IoT data streams come into play. It should be 100% sure that stream of data is going to arrive at its destination every time.

Bandwidth

In addition to security and signaling, bandwidth usage is an another challenge for Internet of Things connectivity. On a cellular network, bandwidth is expensive and it becomes more complex when hundreds of thousands of IoT devices sens/receives signals to the server.

Power Consumption

When hundreds of IoT devices send or receive data between one another, then it takes a lot of power consumption as well as CPU consumption. So, you can't use 100% IoT devices with low power consumption and minimal battery drain.

Complexity. IoT application development is still very complex for the developers as well as experts. It is also the major challenge for the IoT application developers. IoT will be very effective with less complexity

3.5 Security Challenges for Companies

For companies "Internet of Things" is a revolutionary change in the field of analytics and business process management. Goods, materials, and equipment that are commonly fitted with microchips, identifiable and have communication capabilities, will provide detailed information about whereabouts and condition. The accumulated data will receive a one-piece, full-scale and at the same time a detailed picture of what is happening, solve many of the problems and improve the quality of logistics, goods and services (O'Neil, 2010).

"Internet of things" is not just around the corner and we can already notice some information about security problems caused by its appearance.

In solving the problem of power consumption devices, according to a representative of Intel, a very important thing is power consumption by the device, as well as the capacity of the power supply. The companies develop a solution that allows controlling and optimizing energy consumption.

And on the question of which of the components of the smart home of the future will be the most popular, Rod O'Shea said: "If we talk about the smart home, then surely become the most popular interactive entertainment system, safety management systems and electricity, as well as mechanisms for remote control all home generally". P. Magrassi, T. Berg, A World of Smart Objects, Gartner research report R-17-2243, 12 August 2002

Experts predict that in 2050 the global urban population will double, so the load on public transport will increase greatly. In solving this problem, and can help the technology of the Internet of things, establish effective routing and traffic management. The perspective of the Internet of things seem limitless, but the cost of implementing such technologies often simply sky-high. Would it be possible to reduce the cost of high-tech devices in the future? According to Rod O'Shea, there are several ways to reduce the price of introducing Internet technology things in our daily lives. Firstly, it is the most active use of innovations as well as existing technologies are not inventing them again and thereby inflating the price.

With the increasing number of devices and the Internet of Things will increase the volume of Internet traffic, and the entire network infrastructure is strong enough to change. The result will be a new trend - the transition to software-defined network. In other words, simultaneously with the growth of Internet traffic will increase channel capacity and server capacity.