There are other impediments to adoption as well. McKinsey says these include a lack of standards, a price-technology curve that needs to accelerate to ensure mass adoption, and regulatory and privacy concerns.
On this last point, HDS chief technology officer Adrian De Luca suggests there is definitely a social element that needs to be addressed. “The possibilities are fantastic but the Internet of Things initially will be based on mechanical machines and social infrastructure where it doesn’t necessarily deal with people’s personal information.”
While the risks are well understood, the possibilities and the opportunity are simply too compelling for most. According to the ISACA study, “When asked about the risk and rewards of the Internet of Things for enterprises, the majority of respondents (45 percent) believe the benefits outweigh the risks. A further 31 percent believe the risks and benefits are equally balanced and one-quarter think the risks outweigh the benefits.”
Furthermore, 53 percent of those surveyed believe greater internet connectivity is of more benefit than risk to consumers, although respondents said they were aware of the risks.
GE is one of several mega vendors in the industrial space that Gartner defines as a leader in the field. While the rest of the world is still waking up the potential of the Internet of Things, this is already a matter of day-to-day practicality for GE and its clients.
A GE spokesperson tells CRN: “A great example of this is our work with the New Zealand government and aviation authorities, including Queenstown Airport to dramatically increase their overall efficiency.”
By reducing fuel costs, increasing the general efficiency of the airport and assessing, analysing and dealing with a range of different functions impacting the overall sustainability of the facility, the growing regional transport hub is reaping the benefits.
“Delays cost airports and airlines real money every day. When we began working with Queenstown Airport on performance-based navigation to address their navigation efficiency, the average delay in both aircraft departure and arrival times was six minutes and 15 seconds. Using a range of measures and GE performance-based navigation and remote monitoring technology, the monthly average delay now sits at just 32 seconds,” says the spokesperson.
In addition, the monthly average delay for arrivals has been cut by 531 minutes, while for departures, it has been a dramatic 2,173 minutes.
Resellers
For the reseller community, the industrial applications probably provide the most immediate opportunities, says Gartner’s Steenstrup.
“To an extent, the ubiquity of smartphones is a form of the IoT in that you are connected, you have access to information and companies can access you by your devices. If you go further down the consumer path, you will see lots of automation coming into consumer devices like cars and home appliances.”
For instance, Belkin has trumpeted its move into home automation in recent times. The vendor, more well-known for its peripherals, is making a big play for this lifestyle technology sector with light switches accessible from smartphones, webcams that can be viewed via apps and motion trackers that can automatically post to Twitter accounts. The company is using nationwide franchise Jim’s Electrical as its integration partner.
The industrial internet – what Gartner calls operating technology – has more commercial interest for vendors and channel, says Steenstrup. “That is where there is going to be more participation and more activity. And probably more money being spent on projects.”
Infoready, which came 11th in the 2013 CRN Fast 50, is already exposed to the Internet of Things due to its capabilities in the engineering and telco sectors. Managing director Tristan Sternson says: “We are seeing a lot more interest mostly in the data and analytics space. Companies are looking at getting the data generated across their organisations and then being able to utilise that in their general operations. He says the best examples he has seen are the utilities companies, some of which are able to use data coming out of the network in near real time to drive the KPIs of everybody from the CEO down to the employees on the shopfloor.
“That’s everything from being able to pull data into reporting formats, being able to manage performance and to get a minute-by-minute perspective on how they are performing. Then they drive that into devices for mobility so that when they are on the road they have access to all the information required to manage performance. There is a real trend for that,” says Sternson.
There is also a strong demand to implement for preventative maintenance, he adds. “By understanding why things fail and predicting when it is going to happen, we can make preventative changes on their fly.”
Often the percentage improvement from IoT technologies are small single-digit increments of efficiency, but as the companies implementing the solutions are operating at massive scale over long periods of time, the dollar benefits add up in the long run.
The IoT could be a matter of looking after the pennies so the pounds will look after themselves. Mining companies are a good example. According to HDS’ De Luca, some miners are looking to achieve small gains to their supply chain; due to their volume and scale, a two to five percent improvement over 30 years would represent millions of dollars of benefit.
“A lot of use cases are happening in highly competitive industries. It is about margin control, and it’s either about maintaining or growing customers. Also it is often volume dependent. Getting that extra two or three percent means a lot,” says De Luca.
Future benefits
The penetration of low-cost sensors on everything, everywhere and new technologies capable of monitoring, collecting and analysing this information are already disrupting industry and driving substantial economic and productivity benefits, according to GE.
The spokesperson tells CRN: “In the years to come, we see huge opportunities in connecting machines and the internet with industrial service technologies to continue to drive efficiencies across aviation, mining, manufacturing, healthcare and energy.”
GE is investing heavily in the industrial internet, says the spokesperson. “We established a $US1 billion global software centre in Silicon Valley that focuses on managing the interconnection, data management and automation of digital information through software to transition our huge services business from a ‘break-fix’ model to a ‘predict-and-prevent’ model. This will mean our customers will have no unplanned downtime and it will help them be more competitive and productive into the future.”
Cost drivers
De Luca says the falling costs of embedded sensor technology has plummeted compared with 10 years ago, as has the cost of traditional computing technologies like storage. But of course all that extra capability and infrastructure has created a set of new issues.
“We can collect of lot of information but it’s useless unless we can analyse it in real time or apply the best process to it. We [as an industry] still don’t have all the ingredients to make it successful. We still need very clever people who understand what to do with the information. The world is just not producing enough of those people today.”
This is an issue that McKinsey & Company covered extensively in its report into the Internet of Things.
“Companies that hope to reap the benefits of operational improvements and use the Internet of Things to deliver new kinds of customer service and higher-quality products will face an array of technological and organisational challenges… Every department within an organisation, from production to logistics to customer services and sales could potentially receive real-time data about how the company’s products are being built, distributed, sold and used. Few organisations are ready to deal with the sheer amount of data, and have personnel able to do so.”
Systems integration is another critical issue according to Martin Wildsmith, director of CRN Fast50 company Sable Systems.
“For the large industrial companies with massive resources, it’s not a problem,” says Wildsmith. But in order to really take off in the mid tier, many of these approaches need to be productised, he says. “Customers want us to come and drop in a black box and just have it work.”
Telsyte’s Fadaghi says the M2M ecosystem in Australia is still quite fragmented. Industry solutions are often driven by individual business requirements and there isn’t a one-for-all solution for any segments. “That being said, there are large, untapped opportunities for developers, carriers, service providers, integrators, resellers and hardware vendors as the industry grows. It is important to form partnerships and be part of a complete solution, as often businesses are looking for one-stop shops to cater to all requirements.”
The overseas experience suggests plenty of scope for systems integrators then, in the years ahead.
Christopher Rezendes, founder of Boston-based IoT experts Inex Advisors, says: “The vast majority of growth in IoT-like solutions have not and will not come from Big IT. Remember: wireless SCADA, fleet telematics, digital utility meters, RFID, and many other niche IT automation markets will be part of IoT. And those markets are and will be dominated by [system integrator] channels.“
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