For the uninitiated, the Internet of Things (IoT) might look bewildering. But once you dig in deep, one will realize the possible ramifications IoT will usher in the days ahead. Simply put IoT is the ability to seamlessly connect different things—people, machines to cars to anything that has network functionality. If you go by common sense, IoT is the next logical evolution in leveraging connectivity far greater good and remote management. It’s all about making human lives and devices more intelligent and in the bargain one can harvest a whole lot of goodies out of it.
Let’s go into specifics and look at defining IoT (we need to say that there are a whole lot of definition flavors in the Internet, but let’s stick to one from Texas Instruments). According to Jim Chase, Strategic Marketing at Texas Instruments who has put in 27 years in the high tech industry. He summarizes IoT in a white paper that: “IoT is generally thought of as connecting things to the Internet and using that connection to provide some kind of useful remote monitoring or control of those things. This definition of IoT is limited, and references are only a part of the IoT evolution. It is basically a rebranding of the existing machine-to-machine (M2M) market of today. IoT in its culmination—where we live in the data is defined as one that creates an intelligent, invisible network fabric that can be sensed, controlled, and programmed. IoT-enabled products employ embedded technology that allows them to communicate, directly or indirectly, with each other or the Internet.”
This, in fact defines IoT in a true sense. It is about enabling and empowering devices via the Internet and changing the very functionality of the devices. It’s something like Software Defined Infrastructure (SDI), one enables the otherwise limited functionality hardware devices into more agile and intelligent devices.
THE IoT OPPORTUNITY
Any conversation on an emerging technology like IoT invokes multiple perceptive feedbacks. Some may call it hype and some may call it a potential disruptor of things. But as we look at the IoT progression at this point in time, we need to say it’s already started to impact the software services industry in a big way. Many of the leading services providers are going bullish and have an aggressive IoT play.
In terms of the overall opportunity, a latest Gartner forecast puts things in context. It said that 6.4 bn connected things will be in use worldwide in 2016, up 30% from 2015, and will reach 20.8 bn by 2020. In 2016, 5.5 mn new things will get connected every day. Gartner estimates that IoT will support total services spending of $235 bn in 2016, up 22% from 2015. Services are dominated by the professional category (in which businesses contract with external providers in order to design, install and operate IoT systems), however connectivity services (through communications service providers) and consumer
services will grow at a faster pace. “IoT services are the real driver of value in IoT, and increasing attention is being focused on new services by end-user organizations and vendors,” said Jim Tully, Vice President and distinguished analyst at Gartner.
Agrees Somshubhro Pal Choudhury, MD, Analog Devices India, “There is tremendous potential of value addition with IoT to the estimate of $3.9 tn globally, still quoting on the lower end of the McKinsey report, but we have barely scratched the surface. IoT is all about business RoI, application of the right technologies in monitoring, automating and predicting situations at a significantly lower total cost of what is being done today.”
Choudhury believes that the biggest impact of IoT is that the entire business models are transforming more towards a ‘product as a service’ model, changing from capex to opex. He cites successful IoT proof points from ones like Michelin Tires and what it had done for truck fleets. For instance, Michelin monitors the tire pressure, quality of truck tires and ensures optimum fuel usage by essentially offering a model of renting out tires and charging based on per km basis. So instead of selling tires now, Michelin has gone to enabling the transportation business.
This works great for truck fleet management companies, even if paying a bit extra. This works out great for Michelin as they now have a recurring and higher revenue stream and more visibility on their business. All this would not have been possible with a bunch of temperature, tire pressure, road condition sensors in the tires connected by GSM/GPRS to a cloud platform. “A similar services model is now being taken up by GE using the GE Predix
platform to monitor and maintain aircraft engines,” adds Choudhary.
HOW SERVICE PROVIDERS ARE APPROACHING IoT?
IoT is being repetitively referred to in multiple forums both nationally and internationally as the next big wave after Internet and mobile that will affect our day-to-day lives. The way we do business contemporarily will have been impacted hugely on the evolution of IoT in the times to come. In the bargain the communication of things is changing drastically and is evolving to a common standard globally on phenomenal scale. Reflecting on this Anuj Bhalla, Vice President & Global BU Head – Product, System Integration and Maintenance Service, Wipro says, “A lot of technology companies, product companies, services companies, and consulting companies are investing their money in adopting new open and global standards for evolution of IoT which is getting immensely popular and is one of the key ingredients in driving IoT led adoption.”
“The wish list and hype of IoT has been existing for some time now but now we are seeing new models and solutions that are evolving and are being put into a proof of concepts. Manufacturing, energy and utility, oil & gas, transportation, healthcare are some of the key verticals that have evaluated IoT for some of their business optimization and operational efficiency enhancement. As a solution provider Wipro is also seeing an increase in customers wanting to evaluate some of the use cases and address critical pain points. Clients are inviting us to study and suggest improvisation using IoT for their business processes,” adds Bhalla.
Despite the huge opportunity, there are numerous challenges the service providers need to tide over in the IoT space. Quips Madhusudhan KM, CTO at Mindtree, “IoT is a relatively complex ecosystem with sensors, specific protocols like BLE (Bluetooth Low Energy) Zigbee, communication protocols, IoT gateways and middleware platforms. Our experience has demonstrated that IoT solutions realize their full potential when they are combined with other technologies, notably cloud, big data analytics, and integration technologies. It also requires understanding of entire ecosystem and building strong partnerships with various players in the ecosystem. This is exactly what Mindtree has been doing.” Madhusudhan further adds, “At Mindtree, we pride ourselves as being ‘born digital’, since we started during the emergence of eCommerce era in 1999. Today more
than 35% of our revenue is from digital business. With deep experience across all aspects of digital transformation we are well positioned to design and work with sensors
and devices and all the way to build enterprise scale IoT systems and adding value in each step of the value chain for industries like retail, airline, hospitality, car rental companies, banks, insurances, media, and technology.
Experts believe that there will be a significant uptick in IoT adoption in 2016. As adoption picks up, one will also see the ironing out of various issues like the lack of interoperable
technologies and standards, data and information management issues, privacy and security concerns, the skills to manage IoT’s growing complexity, and the lack of proven RoI and monetization models.
Putting this thought in perspective, Venkataraman Krishnan, Vice President and Venture Leader, Engineering and Manufacturing Solutions, Cognizant says, “Service providers are using incubation models to think big, start small and then scale up to solve big-impact problems using IoT. But they start out by working with their partners and customers to prototype and pilot solutions to test the efficacy of IoT technologies in addressing business objectives and driving value. It takes a strong partner ecosystem to bring these solutions to market. As a part of this engagement model, prospects and customers are increasingly experimenting and discovering together. Service providers are working closely with businesses to bring several points of view together with the primary goal
of unearthing value for their end customers.”
Meanwhile other top players like Infosys firmly believe that IoT is going to be the next face of industrialization. Quips Sudip Singh, SVP, Head Global Services, Engineering Services, Infosys, “At Infosys IoT is an integration of engineering, IT and data analytics. Any successful IoT implementation from the enterprise or industries involves end-to-end integration from sensors to big data. In this regard IoT is a multi-technology, multi-vendor, and multiskill requirement. IoT is one of the important themes and Infosys has been bolstering its leadership position in the engineering space.”
It is clear at the end of the day that IoT is going to disrupt individual lives to enterprise IT organizations in a big way in the days ahead. But like all progressive technologies, there are apprehensions that need to be dealt with. We need more clarity on standardizations so that seamless connectivity and inter connectivity can happen. Quips Sudip Singh, “There are a few apprehensions associated with IoT such as security, privacy, reliability etc., and service providers are creating their own frameworks, building consultative approaches, conceptualizing business solutions to address these. Building right skills and investing into right technologies are another important initiatives that service providers are undertaking in order to build successful IoT use cases. Sometimes these skillsets reside outside the organizations and hence service providers are also investing in building the IoT ecosystem
with external entities such as start-up companies as well as academia. Service providers are also willing to co-invest along with their clients and put their skin in the
Clearly, IT services companies have a major role to play in driving the adoption and implementation of IoT solutions. Venkataraman Krishnan of Cognizant sums it up aptly, “Service providers must demystify IoT for customers, and provide the scale and integration capabilities required to hold together disparate systems and the entire ecosystem.”
Dataquest asked Somshubhro Pal Choudhury, MD, Analog Devices India on the IoT impact on various verticals, his take on it:
Smart Watches and Wearable: This vertical has taken off with wide range of fitness gadgets and smart watches. The volume is in consumer-centric gadgets today. The market for remote healthcare and disease management and tracking with clinical grade devices is slower to emerge.
Smart Homes and Appliance: There are varied use cases. The driver for smart appliances is primary returns, warranty, and scheduled maintenance more than anything else. The dream of smart homes has been on the radar for more than 2 decades now, but it will still be only for high-end homeowners who can afford it.
Smart Meters/Smart Grid: Already close to 50% of the homes in the US have smart meters and Europe is deploying in a huge way. Asia is slow in adoption. In India it has happened only in the state of Maharashtra for a large scale deployment of the tune of 3mn meters.
n Smart Buildings: Focus is more on energy management and security. We are seeing active deployment of energy management scenarios with automated HVAC and lighting control based on occupancy worldwide.
Transportation: Mostly focused on fleet management of cars, trucks, and buses via telematics. Several consumer-centric gadgets and IoT solutions are available all around the world today in terms of plugging into the OBD2 port of the car and analytics to understand and schedule maintenance.
Smart City: Primary driver would be Smart lighting to reduce energy usage first and foremost followed by security/surveillance. There is a big push worldwide to move to LED street lights and connected smart lights will give additional benefits along with this LED switchover. Ashwin Mahesh @IoTNEXT2015 talked about a bottom-up approach of building up an infrastructure that can be given at ward level. I frankly see that as a big benefit for scalability of smart cities versus a custom systems integration approach that is ongoing today.
Industrial Automation: It would be a slow start in terms of IoT getting into the current industrial automation systems, but monitoring of the equipment to predict failure, asset tracking, etc, are already starting to happen in a large way.