Cisco that advocated the term "Internet of Everything" is now advocating the term "Fog Computing". these terms are related. According to Cisco the cloud computing model is being replaced by the fog model.
While in cloud computing all computation is done in a remote computing center, in fog computing the computation is distributed between local processing ("at the edge of the network") and remote processing. The relationship to the sensor world is straightforward. A site might have multiple sensors. Some of the processing can be processed locally, and some need to be processed in a remote place, furthermore, this may be dynamic and tuned in real-time. The picture above shows the before (cloud model) and after (fog model). The example is energy system. There may be processing done in a processor located in a single house which takes into considerations all sensors installed in the house. There are other types of processing that related to data from multiple houses and need to be processed in a place where all data is available.
Note that nothing is really new (besides the names). Cloud computing is a new name for an old computing model that was once called "service bureau". In the past the "cloud" was a single mainframe, and the edge where collection of dumb terminals. Now the cloud is a grid, and the edge has processing power, but the principle is the same. Fog is also an old principle of distributing the work reminding of N-tier middleware.
I guess that the fog model is indeed more appropriate for IoT scenario than cloud model, in some of the projects that we are now planning within the Institute of Technological Empowerment, are indeed fog based. The sensors are going to be communicating with a local processor (which may be as simple as a tablet) with some processing done on the local processor, and some on the cloud. This brings us back to the idea of event processing on mobile.
After cloud and fog, we are waiting also for some - wind, rain, and sleet....
