Internet of things (IoT) has the potential to deliver significant benefits across industries. Organisations can leverage IoT to derive considerable cost savings by improving asset utilisation, enhancing process efficiency and boosting productivity. However, the lack of interoperable technologies and standards, information management issues, and privacy and security concerns are inhibiting the growth of IoT. Industry experts share their views on the benefits of IoT, the emerging trends in this space, the key demand drivers and the challenges faced in deployment…
What are the key benefits of IoT technology?
We are moving into an era of ubiquitous connectivity. The launch of next-generation technologies, increasing smartphone and tablet penetration, optical fibre cable deployments in backhaul and last mile and the recently announced government initiatives are some of the key drivers which will be the focal points driving the next telecom revolution which will be all about data. As per Frost & Sullivan estimates, India is expected to have 1.5 billion connected devices by 2020.
IoT has found applications in the domestic as well as industrial circuits. Automation of home appliances means they get switched off automatically when sensors detect that people have left their homes. Households and businesses can reap huge benefits with motion sensors on their premises. Connected devices and the emergence of IoT have opened up opportunities with new business models and it is signalling transformation across industries. IoT can help with asset management resulting in greater efficiency. It helps businesses utilise their assets in an efficient and innovative manner and also in real-time decision-making. Industries like manufacturing have benefited immensely as they can track, measure and analyse the data across all production units/plants in real time from multiple sensors and accordingly, take prompt corrective measures.
IoT can also help with resource optimisation. Usage of natural resources/energy can be optimised based on the information collected from the sensors deployed to monitor machines/devices and related energy consumption. IoT also provides opportunities for new business models by enabling collaboration between the different stakeholders to arrive at different solutions and address the need to reach out to a wider customer base.
IoT is the network of physical objects accessed through the internet. These objects contain embedded technology to interact with internal states or the external environment. When the objects can sense and communicate, it changes the decision-making process.
The key benefits of IoT are:
- Increasing efficiency in controlling and reacting to a device.
- Enabling greater automation, remote control, analysis of trends and reporting.
- Providing agility in prediction and adaptation. Sensed data is augmented by external data sets for complex predictive analysis for pre-emptive action and is closely integrated with a number of organisational processes.
- Using data and insights to support entirely new business models, products and services and data economies.
The Broadband India Forum believes that IoT acts as an intermediary tool that helps turn information into a force that can boost efficiency, increase productivity and drive fundamental improvements in customers’ experience. IoT helps companies in monitoring usage and performance in detail. It also enables customers to remotely control complex functions.
What are the current trends in the global IoT market? What is the Indian scenario?
Globally, IoT is expected to expand from 1.2 billion devices in 2015 to 5.4 billion connected devices by 2020. The current trends in the global IoT market are:
- Exploding volume of data (big data).
- Cloud storage systems.
- Conversion of data into actionable intelligence. For instance, the retail and logistics sectors have been driving the use of tracking mechanisms for the assets they manage. This is supported by passive and active radio frequency identification (RFID), which is used in applications such as supply chain management and in-store security systems.
- Controlling decisions, optimising resources and lowering uncertainty in real time. For instance, manufacturing and engineering firms have been developing sensors and remote monitoring tools for machine-to-machine (M2M) communications, monitoring, and control systems.
Other trends that are driving the growth of the IoT market are:
- Increased penetration of smartphones and tablets.
- Public-, private- and hybrid cloud-based architecture and resources.
- Expansion of wireless connectivity technologies (3G/4G, Wi-Fi).
- Increased uptake of ultra-low-power microcontroller units.
- Decreasing prices of wireless sensors and hardware.
- Better storage and computing resources.
- Smaller, more diverse and powerful chips.
As far as the Indian IoT scenario is concerned, around 84 per cent of Indian consumers own at least one IoT device, with the average estimated number of IoT devices in the homes being seven. Smart TVs top the list of the most wanted IoT devices to get in the next 12 months, followed by smart watches and internet-connected home alarm systems. Other industries like health care, telecom and oil and gas have yet to tap the IoT potential
Which industry verticals have seen the maximum uptake of IoT devices?
The following industry verticals have seen the maximum uptake of IoT in India:
- Health care: IoT plays a major role in the implementation of automated health monitoring systems. Individuals can be monitored with a wearable sensor system for vital health statistics, and the information could be constantly fed to a central monitoring system at a health care practitioner’s office via the internet. Patients can be monitored at home in real time.
- Transportation: IoT can be used for fleet management and asset tracking. Fleet management is one of the sectors that has been an early adopter of M2M communications, and with the convergence of smartphone technologies along with near field communication (NFC) systems, it is possible to create fleet management systems that decide on the best routes, monitor driver behaviour, estimate stop times, and so on. IoT can help automatically monitor products in the supply chain at any time in order to maintain quality and ensure on-time delivery. For long, RFID tags have been used to track shipments at different stages of transportation. With the advent of IoT, tracking systems have become more advanced, and RFID tags along with mobile phone applications are being used to not only determine the exact location of products but also to determine various environmental factors associated with transportation.
- Smart building (energy management): The automatic dimming of lights when a person leaves a room and switching off of high-power- consuming appliances when not in use can all be achieved by placing different types of sensors at appropriate locations. IoT takes building automation a step further by enabling smart energy grids to be connected over the internet. This allows consumers to know exactly how much energy they have been consuming and identify areas where energy savings can be achieved.
- Smart utilities: Using IoT, smart meters can be installed for utilities involved in the distribution of water, gas and energy to households. Sensors on the pulsed meters can help accurately measure consumption and communicate the same to the local aggregator/central server for accurate and timely billing and consumption monitoring, thus limiting pilferage and theft over a period of time. The data can be analysed for distribution planning as well as designing innovative tariff structures. Bharti Airtel has been offering smart metering M2M solutions to many power utilities in a bid to help the states reduce power outages and minimise transmission losses and also track the transformers and grids for their performance.
- Monitoring of telecommunication towers: India has around 370,000 telecom tower sites. With the use of IoT, the remote towers can be monitored in real time to ensure efficient utilisation of resources like diesel and also reduce the instances of theft.
Across the world, the energy, health care, automotives, transport, agriculture, public utilities and the insurance industries have seen the maximum uptake of IoT devices.
Throughout 2016 and beyond, we will continue to witness greater worldwide adoption of IoT on the back of four key factors – data monetisation, deployment of core IT networks and emergence of lowpower devices, development of the platforms-as-a-service platform and investment in IoT start-ups. It is estimated that IoT will support total services spending of $235 billion in 2016. However, despite the huge revenue potential that data monetisation presents, only 8 per cent of the businesses today are actually using more than 25 per cent of their IoT data, as per an Oxford Economics study.
The IoT market is likely to cover billions of devices by 2020 and India seems to be a major market in that respect. According to a recent TechSci Research report, the IoT market in India is expected to grow at a compound annual growth rate of 28 per cent between 2015 and 2020. The IoT ecosystem in India is mainly driven by three segments – government, industry and start-ups.
The government has released a draft IoT policy to fulfil the vision of developing a connected, secure and a smart system based on our country’s needs. The government has committed an investment of
Rs 480 billion for smart cities, which are likely to use around 1.6 billion connected devices by 2016, an increase of 39 per cent from 2015.
Another key segment in the IoT ecosystem is industry. About one-fifth of the manufacturing companies are estimated to be using IoT to increase production and reduce costs. Meanwhile, start-ups are creating newer realms each day within the IoT space through silent disruptions and innovations.
What are the key challenges faced by the companies in the IoT space?
The market for IoT has not matured. Since IoT involves a number of technologies, the system is pretty complex today. Also, what adds to the complexity of the system is the fact that IoT connects a wide range of devices. Lack of interoperability between these technologies has made it difficult to effectively manage them. Security and privacy are the most important ones. IoT entails a large amount of data concerns being collected and stored. Any breach in the security systems or theft of data can have grave consequences. Moreover, the applications and the idea as a whole may not have broad social acceptance. Ubiquitous connectivity does not appeal to all as a lot of people view it as a breach of privacy.
As IoT is fully technology- and internet-driven, most of the challenges are related to confidentiality, integrity and availability of data.
The key challenges for companies in the IoT space are:
- Security issues
- Denial-of-service attacks
- Catastrophic failures
- Obsolete technology
- Identity thefts
- Network risks
- Interoperability issues
The key challenges faced by the companies in the IoT space are:
- Non-availability of standardised industrial IoT platforms: Standardisation is a form of economic self-regulation that can relieve the government of the responsibility of developing detailed technical specifications while ensuring that voluntary, consensus standards serve the public interest.
- Security and management: Consumers are worried that a smart home security system that records everything in their home may also be a way for hackers to breach their home security system. With IoT come billions of new terminals, all connected via IP addresses. Unsecured devices increase organisations’ vulnerability to cyberthreats.
- Ecosystem: IoT being a platform business, it can only be successful if different parts of the ecosystem work together efficiently. This creates another layer of complexity.
What is your outlook for IoT technology for the next two years? What will be the key growth drivers?
The following are the key enablers for realising the true value of IoT in India:
- The skilled talent pool is well placed to tap into the IoT to make the country the hub of global IoT innovation.
- Improved wireless connectivity will provide a boost for the implementation of IoT.
- The country has witnessed a number of start-ups and new ventures trying to make things happen on this front. We have had global technology giants like Cisco invest in this market and complement the efforts of smaller niche players. A number of such start-ups in the niche segments are contributing significantly to the development in this market.
- The Indian telecom space is witnessing a revolution with increasing penetration of smart devices and adoption of smartphones. Ubiquitous connectivity bodes well for IoT applications.
- The government’s focus on building smart cities in India will give a further boost to IoT.
- IoT has a promising future in India, as there is a tremendous potential to improve efficiencies in infrastructure. It can bring about transformation in the way we work and live.
- The key drivers for IoT in India will be businesses, technology and energy efficiency. Sectors such as agriculture and health care are looking to adopt IoT on a large scale. The government’s Digital India initiative and the introduction of alternative broadband technologies including Wi-Fi and satellite communications are also likely to aid in IoT proliferation.
Driven by advances in the mobile technology and bring-your-own device trend, around 10 billion things are connected to the internet today. The next wave of internet growth will come through the confluence of people, process, data and things.
By 2020, internet-connected devices are expected to reach up to 50 billion. The potential value generation from IoT is around $14.4 trillion. Of this, 66 per cent or $9.5 trillion will come from the transformation based on industry-specific-use cases such as smart grids and smart buildings. The remaining 34 per cent worth $4.9 trillion will be produced by cross-industry-use cases.