Internet of Things, Network Economics, and Operations Research

Next week, while I will be speaking on cybersecurity at the Heinz College at Carnegie Mellon University, my collaborator on our NSF ChoiceNet project, and now NSF EAGER project, Associate Dean in the UMass Amherst College of Engineering Professor Tilman Wolf, will be flying to Berlin, Germany, to present our invited paper at the 1st IEEE International Conference on the Internet of Things Design and Implementation.

The title of our paper is below and it will be published in the Proceedings of the First IEEE International Conference on Internet-of-Things Design and Implementation (IoTDI), Berlin, Germany, April 2016.

The abstract is as follows: Many solutions to important societal problems relating to the environment, health care, transportation, etc. seek to utilize the promises of the Internet of Things (IoT), where sensing, computation, and actuation merge the physical world with the computational world. To date, many such solutions have focused on a single problem domain and require dedicated sensor and actuator infrastructure. This vertical integration makes the development of innovative, novel solutions costly and difficult to deploy. An architectural approach to addressing this challenge is to enable horizontal integration, where sensors and actuators from different applications can interconnect with any computational IoT application. In order to isolate complexities and to support heterogeneous systems and software, it is necessary to provide clear abstractions. We present such abstractions in the form of a layered protocol architecture that describes the necessary interfaces. Beyond technical challenges for horizontal integration, this paper also addresses network economic considerations since the various entities owning and operating sensors and actuators need suitable economic motivation to participate in such an approach. We believe that this work provides a conceptual foundation for future, scalable IoT solutions.

In quantifying the synergy associated with horizontal integration, we have assumed that system optimization, in the form of total cost minimization, is the desired criterion. This reflects centralized decision-making. Earlier applications of synergy measures that I have done research on were in the context  of supply chain networks and included a means of evaluating mergers and acquisitions.

Since the costs on the links prior to horizontal integration in the Internet of Things (IoT) and post correspond to generalized costs, this gives us the flexibility to include risk measures, emission measures (if there are environmental concerns), and other relevant criteria, and, with appropriate extensions, even time.

Below are the networks corresponding to two applications prior to integration in our IoT framework that includes ideas from network economics and operations research.

 Also, we may have different degrees of horizontal integration:

The synergy measure is calculated as follows:

Interestingly, in supply chain network applications, thus far, the network topologies (see the references in a prior blogpost) have been less expansive than in the IoT context revealed here. Also, the added links in the horizontal integration cases corresponded to transportation activities and not data transfer activities as in the above network figures.

Wishing everyone at the IEEE conference in Berlin, Germany a very rewarding time!