The phrase Internet of Things was coined in the late 1990s, allegedly by the British entrepreneur Kevin Ashton, while he was working with RFID technology. Kevin became interested in using RFID to manage supply chains while working at Proctor and Gamble.

RFID, or Radio Frequency ID, is the technology behind the little tags you wear on your key chain and use to open doors, for instance. RFID tags are an example of interesting things that can, indirectly in this case, be connected to the Internet. RFID tags are not limited to opening doors, of course, and the form factor does not have to be limited to a tag on a key chain.

An RFID tag contains a small chip, about 2 millimeters squared, and a coil. When placed near a reader, the coil is charged with electricity by induction, and the chip is given power long enough for it to transmit a unique identifier to the reader's hardware. The reader, in turn, sends the tag's identification string to a server that decides,...