Internet of Things: Trends and challenges ahead
Charles Reed Anderson is an Internet of Things industry thought leader with over 25 years’ experience in advising enterprises and government organizations on utilizing emerging technologies. He was previously Head of Mobility and IoT at IDC Asia Pacific before founding IoT advisory firm CRA & Associates. He sits on the advisory boards of numerous IoT start-ups, industry associations and event organisations, and is also the Conference Chair for IoT Asia 2017 in Singapore.
eGov Innovation speaks with Charles Reed Anderson on the latest trends, developments and challenges in the IoT industry.
What IoT trends can we expect in the year ahead?
I think two areas will be interesting to watch in 2017:
1) The Rise of the IoT OTT
We capture a lot of information, but if not properly analysed, it remains information. What the industry needs is more intelligence. To illustrate, a high rise commercial building can have well over 100,000 sensors. Due to the number of sensors and building management systems, it becomes information overload, with some facility managers stating they get up to 2000 alerts per day. What we have seen over the past couple years in this space is companies not selling more hardware (e.g. sensors), but instead selling what I call an IoT over-the-top software service. These solutions can aggregate the information from multiple building management systems since the vast majority all run on the same protocol (BACnet). They can turn a situation with information overload into one of actionable intelligence. This same model is being applied to video surveillance with companies now not pushing enterprises and governments to purchase new security cameras, but instead focusing on software that derive insights from the cameras they already have, whether they are the latest HD camera or an older low quality camera. The message to the customers is simple, the IoT OTTs offer a low cost, as-a-service solution to help them drive value out of the existing technology investments.
2) 2017 will be the year of Low Power WANs (LPWANs)
LPWANs are dedicated IoT networks and we need them because today’s current mobile networks cannot handle the number of “things” we are connecting. There are three main camps:
- NB-IoT: backed by Huawei, Nokia, Ericsson, Cisco Jasper, and the mobile operators. This runs on top of the existing mobile networks.
- LoRa: Unlicensed spectrum that is inexpensive to deploy. It can be used to cover specific cities, but some operators are deploying nationwide networks (e.g. KPN in Netherlands, SK Telecom in Korea, Tata Comms in India).
- Sigfox: French startup that uses an alternative unlicensed spectrum. Their model requires that a Sigfox Network Operator (SNO) be created to deploy a nationwide network, with 32 countries deployed to date and they will hit 60 countries in 2018. This is a good “global” alternative.
While this sounds technical and a bit boring, the key thing is that LPWANs have brought the entire ICT industry AND customers into a single space and they are all competing there, including:
- Hardware vendors: Qualcomm, Intel, Semtech. ZTE, Cisco
- Software vendors: Nokia, Huawei, Ericsson, Actility, Cisco Jasper, IBM, AWS, Microsoft
- Connectivity vendors: Mobile Operators, Fixed Operators AND newly formed SNOs (which tend to be more of a systems integrator)
- Services vendors: Tech Mahindra, Accenture
- Enterprise Customers: companies like Engie, Total, Bosch are big backers of the technologies.
- Smart Cities: desperately need these networks to drive smart city initiatives.
These are also great for customers because the reduce the connectivity cost for devices (e.g. smart meters) by over 90%, so that means the customer business case will be improved. Less cost means we can connect more things for less.
What are the latest IoT developments in the Asia Pacific region?
- LPWANs - SK Telecom launched nationwide LoRa in July 2016. There are now SNOs across the region as well, including Thinxtra (ANZ, HK), Kyocera (Japan) and UnaBiz (Singapore, Taiwan).
- Smart Streetlights - might sound strange, but I am a big fan of these. First, they drive energy efficiency so they make sense financially. More importantly, streetlights already exist, which means that if you want to change to an LED lightbulb to save money on them, while you are replacing it you can also add additional sensors (environmental, weather, security) to the streetlights. They can basically become a hub for capturing different info. What could that mean to a citizen? Imagine if we put environmental sensors across hundreds or thousands of streetlights in Singapore. When we next have a haze issues, we could then provide the citizen with more detailed information (e.g. neighbourhood or street level) about the air quality and risks. Another benefit for the city is that much of this information could then be shared with its citizens, who could then leverage the information to build their own IoT solutions.
- Artificial Intelligence (AI) - everyone loves talking about, but we are only now starting to see the ways it can be leveraged. Organisations are capturing all sorts of data, but few are learning how to turn that information into intelligence. There are interesting developments in high end manufacturing, with predictive analytics being used to refine the manufacturing and quality control process, but it is still early days. I do expect to see a lot more investment and experimentation in this space over the coming 12 – 24 months.
- Augmented Reality (AR) - expect to see more consumer solutions in the AR space in 2017. Pokemon Go woke up the marketing departments in many industries and they are now looking for new ways to enhance the customer experience. Keep an eye on hospitality (e.g. museums) and retail spaces this year, but the more traditional AR solutions for construction and manufacturing should go more mainstream as well in the enterprise.
What are some of the most significant challenges faced by the IoT industry today?
I’m supposed to say Security, but I won’t because while there are security concerns around IoT, the problem isn’t a lack of security solutions, it’s a lack of understanding where the security risks are. Then I am supposed to say something about a lack of standards and protocols - but I won’t. IoT is far too diverse and it has been evolving for nearly 30 years (M2M) and we must face the fact that no one protocol or standard will win out. People always want to know which platform will win. I always say no one will win and we don’t need anyone to. What we need are companies to build a “Platform of Platforms” that integrates the many platforms an enterprise or government use into a single platform.
For me, the biggest challenge is with us - as people.
- IoT in the organisation - The biggest issue is that we tend to leave IoT to IT, but to design, deliver and support IoT initiatives, you need involvement from non-IT areas like operations, finance, strategy, marketing, etc.
- IoT in the industry - We need more collaboration across the vendor community. The technologies work together, but it is harder to get the people to work together.
- Focus on solutions - We have the technologies to drive innovation, what we lack is people who are solutions focused, meaning that they first look at a business process or challenge, and then think about how we can leverage technology to solve it. As an industry, we tend to show up at the customer and say “this is what I have to sell” and hope it works. We need a solutions selling mentality.
- Technical skills - We also need more developers and engineers to drive future growth in the industry or we will never hit the massive forecasts that analysts are betting on (e.g. 30B connected things by 2020)
I find events like IoT Asia, that encourage in-depth discussions amongst players across the entire IoT value chain to address such key challenges in IoT adoption very crucial in propelling IoT growth further.
What can governments do to foster an IoT ecosystem?
- Education system - we need to teach IT to non-IT people so they understand how it will impact their careers. If you are studying marketing now, you should be looking at AI, augmented reality, etc.
- Access to data - Dr Vivian Balakrishnan, Minister-in-Charge of the Smart Nation Initiative, Singapore, rightly talks about the importance of open data. If it isn’t in violation of anyone’s privacy, share the data to allow the next generation of application developers to access - hopefully they can create the solutions that will drive future growth of smart cities.
- Ease of regulations - in some countries I work in, certain governments have policies that slows innovation. This normally happens when the government is trying to protect a traditional business (e.g. taxis, banks) from market disruptors.
- Government support for smart cities – Smart cities will need tens of thousands of applications to deliver value back to the city and its citizens. Run competitions for smaller developers where their solutions can be deployed across the city initiatives.
What are some challenges faced by governments embarking on smart city initiatives?
In recent years, we built far too much hype around Smart Cities. It is a great concept, but people got so excited about launching their Smart City initiative, they forget that:
- Financing - Cities don’t write blank cheques to support initiatives. Each initiative requires funding and that can be difficult to come by. I have worked with some cities in the region that have had their entire budgets suspended for months, basically shutting down their initiatives.
- Planning - There will be hundreds or thousands of initiatives. Who is managing this centrally to make sure that cities leverage common platforms (cost savings, interoperability) and drive towards a common goal? Singapore and Taipei have done well with this as they both focused on setting up a PMO to manage the complexity.
- Technology - Governments need to constantly ensure they have the latest and greatest tech infrastructure in place. This infrastructure (e.g. Mobile, Cloud, Analytics) is the platform on which you will run your smart cities - if it isn’t there, you can’t deliver.
As a result, cities tend to start with more infrastructure-related initiatives like asset tracking, smart grids, predictive maintenance that offer a quick ROI. This will continue for some time as cities look to drive operational efficiencies and cost savings, with those cost savings “hopefully” being used to drive more citizen-focused initiatives like vehicle-sharing (shared bike, scooter and car schemes).