Out-Law News 2 min. read

Businesses cannot afford to treat the 'internet of things' as an afterthought, says expert

Businesses need to get their technology and policies organised now to be able to meet the forthcoming opportunities presented by the 'internet of things' (IoTs), an expert has said.

The concept of the IoTs is a term given to the increasing automatic communication between devices and tags that form complex networks around citizens.

The increasing interconnection of previously independent systems and data banks present businesses with opportunities, technology law expert Luke Scanlon of Pinsent Masons, the law firm behind Out-Law.com, said. However, he warned that businesses cannot afford to wait for more aspects of the IoTs to become reality before taking action.

A failure to adopt systems equipped to harness the wave of information that will be generated by the connectivity foreseen in the age of the IoTs could see businesses fall behind competitors, Scanlon said.

The expert was commenting after International Data Corporation (IDC) predicted that the market for IT support for the IoTs would grow from global revenues of $4.8 billion in 2012 to $7.3bn by 2017.

IDC identified potential for growth for suppliers operating in "vertical markets" across the industries where the IoTs would be prevalent. It identified IT opportunities in the emerging markets for connected homes and cars and in smart metering, among others.

"There are many opportunities for vendors to offer parts or product suites that cover the needed IoTs IT set," IDC said. "And vendors will have incentive to do so due to rapid growth which will occur as industries see the convenience, productivity, and efficiency that IoTs brings to business processes."

"Accordingly, while horizontal-focused IT vendors will look to offer IoTs solutions that appeal to many industries, there will also be impetus to offer vertical-focused solutions that make IoT tangible for both industries applications (machine-to-machine) and consumer needs (business-to-business-to-consumer)," it added.

Scanlon said that the IDC figures highlight the need for businesses to think, act and respond more quickly than traditional organisational structures allow for.

"Businesses cannot still be grappling with BYOD and CYOD policies, the legality of remotely wiping an employee’s device or customer’s licensed product, uncertainty about cloud compliance risks, how to implement big data strategies within their organisations and compliance issues surrounding data sharing arrangements," Scanlon said. "These issues are all quickly becoming old news as disruptors move forward with the next wave of change. But they must be addressed to confidently capitalise on the opportunities which ‘all things connectivity’ presents."

He said that there is a need for almost every business to be thinking about how to embed connectivity into new products before any development work or design decisions are made. Businesses, he said, must ensure that their offerings become "connected by default".

"The internet of things cannot simply be an afterthought or a strategic plan to be implemented at some future unknown date," Scanlon said.

However, the expert said businesses must be aware of their obligations with regards data privacy when seeking to tap into the potential of the IoTs.

"As organisations seek to develop more connected systems, they should consider whether any new compliance risks arise as a result of transmitting data from new and varied sources," Scanlon said. "The more an organisation has access to and combines datasets the more difficult it becomes to argue that it has truly anonymised data. The more information you have about a specific person or specific circumstances, the more likely you will be compelled to act with a duty of care towards that person or circumstance."

"Internet service providers and online businesses have all been through this, with Twitter being the current example. These businesses argue that they should have no obligation towards what happens on their platforms. But generally the law has at least imposed obligations on them when they have actual knowledge of illegality in connection with their services. An issue for businesses relying on data streams transmitting from their products may be the point at which calls for similar duties to be imposed on them begin to be made in the media and in political realms," he added.

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