Internet of things simple graphic overlayed over 2015

Where next for the Internet of Things?

Everyone knows that the Internet of Things (IoT) is the next big thing. E&T went to the IoT World Forum in London to find out what's trending among the big names and, crucially, what 2015 will bring.

According to statistics from McKinsey Global Institute, the Internet of Things has the potential to generate a global economic impact of somewhere between $2.7tr and $6.2tr a year by 2025. It was at the peak of expectations in Gartner's Hype Cycle for Emerging Technologies in 2014 and, as a result, hopes for what this next stage of the digital revolution will deliver are high indeed. But what is the reality?

If the atmosphere at the two-day Internet of Things (IoT) World Forum in London in November 2014 was anything to go by, it really is going to live up to the hype and deliver exciting things across many sectors, from manufacturing and energy to transport and the home. There were keynotes from big industry players such as Microsoft, O2 and Cisco, and exhibits, presentations and panel discussions from the smaller businesses that are creating the devices and platforms that will enable it.

Keynote presentations revealed that by 2020 more than two billion devices will be connected to the Internet and that the IoT will be enabling the creation of business models that could not have been considered before. Some are radical and could see traditional business models that have dominated our world fall by the way side.

Matt Hatton, CEO and founder of Machina Research, who chaired the event, gave the growth of car clubs such as ZipCar as an example of this. "We all used to own our own cars but increasingly in many urban areas across the UK people are now just subscribing to a shared model whereby you just use a car when you need it for a fee."

Microsoft's Steve Dunbar, IoT commercial director, said the software giant has been focusing on how the IoT can be used to drive business transformation and insights. He said: "Some businesses have been uneasy about the IoT as there has not been a very clear definition of it up until now but it's at an inflection point - the cost of both devices and connectivity is down, the reality and value of how and what it can deliver is clearer, and all of these things combined are acting as a real enabler for business in many sectors."

With that in mind, Dunbar and his team have been looking at how the new data streams that are being generated can really add value and help companies transform how they do business. "We're advising our customers to start small and just connect a couple of devices to figure out exactly what they need and how best to deliver it, then grow it all from there."

O2 UK's head of M2M and IoT specialists, Vinnett Taylor, said that the IoT is just the next step in a M2M communications revolution that has been in progress for over a decade, something that the company has christened 'digital disruption'.

"At O2 we've been working on M2M communications for 15 years and the difference that the IoT is making is that instead of one machine talking to another machine then the web, we now have lots of different devices talking to one machine then the web." 

All these devices are chattering away to each other and creating a mountain of data, which is why 90 per cent of the world's data has been created in the past two years alone.

Getting value from the data

Wading through all this data to get the right information can seem like a very daunting task for many organisations, which is why the management, storage and ownership of data, and making sense of it all, was one of the most hotly debated topics at the event.

German/American company Parstream has developed a data analytics platform to help businesses manage the overwhelming amount of data that they now have to deal with. The first version was launched in 2011 and helped web analytics company E-Tracker process the billions of data packages it has to deal with much more efficiently. The company's CTO, Michael Hummel, said that for the IoT to really deliver value, data analysis has to have historical and real-time data working together; and that businesses have to address how they are gathering, storing, analysing and transferring it.

Data is now being generated much faster than bandwidth is growing and laws around sharing data beyond borders are presenting real challenges for global organisations that want to tap into the business transformation that the IoT can deliver. Parstream's solution to this is geo-distributed analytics, which is also known as fog computing. This means data is stored where it's generated and queried at source.

Hummel gave an example of the German railway system, which is now storing and analysing data on board its trains and sending only the results back to the management teams that need it to make both strategic and business-as-usual decisions.

Another example is Siemens, which has been running a test pilot for the past year and a half using geo-distributed analytics, and the Parstream solution, to manage the immense amount of data being generated by the 5,000 sensors installed on a gas turbine, all of which are making 100 readings per second. All of the data being generated is stored locally at the turbine with just the results of the analysis being sent back to Siemens' network.

This overcomes the twin data-transfer challenges of lag and bandwidth, while also allowing Siemens to focus only on the data that matters and not have to store such a huge amount of data on its network. Hummel described this as "the IoT enabling small homogenous data sets to be fed in to get just the information that is required, namely selective analytics, which can deliver more value in less time, for less cost".

Using selective data is already helping utilities companies to accelerate decision making and educate customers about better energy usage according to James Monighan, who presented about British Gas projects with smart meters, and Taylor who said O2 has been working with energy companies to develop the solutions for communicating the right data. "Smart-meter data is being used to show consumers how to use it better to cut costs and by the utilities companies to manage peaks and troughs in demand," said Taylor. "The overall effect of this is less energy usage overall, which improves the cost effectiveness and environmental performance of the energy sector."

If we're to keep control of all the data in the long-term though, Hatton, of Machina Research, believes we're going to need new data-clearing houses so that all data is tagged and has meaning: "If we're going to mash-up data and use it to make new business model decisions then we need to know its source and that we can rely on its credibility."

So it seems that there are plenty of strategic benefits that the IoT will deliver but on the shop floor, or at the wind turbine, solar farm, on the train or bus, there needs to be the engineering and technology solutions in place that will enable the data to be gathered in the first place.

One of the exhibitors at the Forum was BB'Electronics, who not only launched a new product at the show, WIZZARD, but also gave a glimpse of their new swarm technology, which will launch as a test pilot in Q2 2015 and is set to transform the addition of new sensor capability to networks. No longer will new cabling have to be installed when new sensors and data ports are needed, instead new devices will be able to be added using a Wi-Fi connection. With the new device connected to the network it won't need to be in the same building to talk to existing devices, or even the same country.

Future-proofing infrastructure

Tim Taberner, BB's global product manager for advanced IoT gateways said: "Essentially it will enable organisations to future-proof their infrastructure and our early product research has shown that it will have a real immediate benefit for the manufacturing, petrochemical and transport sectors, and many more after that as we fully realise its potential."

In the meantime, the WIZZARD product is a wireless sensor mesh that has groups of sensors talking to each other and sending their data to a router from which it is transferred to the cloud. These sensors can also help businesses save money and reduce their environmental impact as they can be set to all power up at the same time, gather and share their data, then power off until the next scheduled data grab.

Taberner added: "What every business needs to realise is that any IoT project is going to be a continual work in progress as the technology advances, the data available or needed changes, and new and old systems have to find ways of working together."

But despite this decentralisation of data storage and analysis we are still going to need a safe and secure cloud where data can be stored once it's been analysed. Microsoft and Google have been creating huge cloud capacity between them.

Global data centres

Dunbar said that Microsoft is now set up to deliver large-scale IoT frameworks through 19 global data centres that could each fit two jumbo jets in them. In his presentation at the event Google's head of Enterprise Marketing for the UK and Europe, David Keene, revealed that for the past 15 years Google have been building the world's fastest, most powerful cloud infrastructure to deliver the BigQuery Analytic Service, which is a cloud-based fully managed data service that businesses big and small can use to store, mash-up, analyse and share data – something the smaller companies that want to get the benefits of the IoT will be pleased to hear as not all of them will be in a position to create their own decentralised analytics frameworks.

So there is plenty of innovation going on in the areas of strategy, cloud infrastructure data capture, storage, analysis and business modelling. But where is it all leading?

Although this next stage of the digital revolution is in its infancy, everyone at the event seemed to think that 2015 will see some major leaps forward for the Internet of Things. Dunbar said that for the IoT to deliver on the hype and not fall into the trough of disillusionment, which many emerging technologies on Gartner's hype cycle do after reaching the peak, depends on monetisation and delivering business value: "To do this businesses really need to understand the total cost of ownership of an IoT framework and what the real return on investment is going to be."

There are also regulatory issues to be overcome for sectors such as health and finance to be able to delve into the IoT world, just like there was when the Internet itself first came into general use.

But Parstream's Hummel said that he thinks 2015 will see four major steps forward for the IoT: the first is the development of apps. "Solutions will be built for specific-use cases, such as conditional monitoring of robot welders. There will be off-the-shelf solutions that can be plugged in to measure the most important data for these machines."

Hatton agreed with him about the creative possibilities that the IoT is presenting: "One of the really interesting things is the degree to which you can create an environment for people to experiment and create new applications." However, he said that we could see a trend emerging for generic solutions rather than specific: "Maybe it will become less about a sensor for a particular purpose and more about generic multi-sensor devices that do it all. It's so new and exciting and there are so many opportunities that we are all working it out as we go along and creating new things and new ways of doing old things."

Hummel's other predictions for 2015 are that there will be widespread adoption of Geo-Distributed Analytics and more businesses will decentralise their data storage and analysis; there will be more infrastructure integration and we'll start to think less about the databases and the infrastructure that supports them and focus just on the what the data analysis reveals. Finally, he sees the coming year as the one in which the market really starts to get to grips with the IoT and our knowledge base expands: "The organisations involved in the IoT will become more educated and understand that it really is all about the data analysis results and not the software solutions that deliver them."

Hatton sees that the types of organisations involved in the IoT revolution will also start to change: "2015 will see enterprise adoption of the IoT, which until now has predominantly been on the supply side. It's now going to move into the demand side and the value chain."

Summing up O2's view of 2015, Taylor said that connecting all of the data now available with processes and people is how business models will be revolutionised and industries transformed: "With the right technology, people and processes, we can do anything now."

As with everything new in the digital world, privacy and security are the next steps that have to be developed. With so much sensitive data winging its way around the world, everyone at the Forum agreed that this is becoming the biggest issue to address. So perhaps by the time of the 2015 Internet of Things World Forum there will have been another leap forward in this area too.

As we've come to expect from Google, who have been at the forefront of all things web innovation for a long time, they really are thinking big and believe that now is the time when we really start to see the imaginings of the future becoming our reality. Google's Keene ended his presentation with Futurecasting. He said: "What am I thinking about? Storage and connectivity costs will trend to zero so people, animals, things and processes will all be online. There will be new platforms for people and collaboration, mobiles, wearables, homes, cities, cars. We are all going to start to forget that things aren't people."

Everyone agrees that we are at the start of something really big and 2015 is the year when it is going to start to move into the mainstream. We're set to become a truly connected planet and we all just have to wait and see what those connections are going to bring. 

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