What is Internet of Things (IoT)?
The internet connectivity these days is typically limited to traditional devices such as desktop and laptop computers, smartphones and tablets. The Internet of Things (IoT) extends this connectivity to a wide array of devices and everyday things that boast embedded technology.
Gartner says, â€śThe IoT is the network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or with an external environment.â€ť
WhatIS.com Definition: â€śThe Internet of Things (IoT) is a scenario in which objects, animals or people are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.â€ť
According to Ganesh Ramamoorthy, VP Gartner, â€śIoT — unlike popular belief –is not a hardware or infrastructure play. IoT is complete services play. It is not about implementing their (vendors) services. IoT basically links an IoT device with an attached service. For example, IoT device Fitbit on wrist tracks personâ€™s health, heart rate etc. That the service delivered by the company collects/analyses the data and pushes it to userâ€™s smartphone is the most central element. Merely pushing device is useless if the service is not available or delivered in proper manner. Companies investing in IoT technology need to understand the importance of the service and whether that type of service makes absolute sense for their company. Vendors need to ask the same question. They canâ€™t just push boxes without linkage to the services offered by other parties or they can be offered as new services with IoT solution.â€ť
Internet Business Solutions Group (IBSG) of Cisco Systems predicts some 25 billion devices will be connected by 2015, and 50 billion by 2020. According to Gartner, IoT will include 26 billion smart devices by 2020. According to a report of International Data Corporation (IDC), the installed and connected base of IoT units is expected to reach around 30 billion by 2020.
Challenges in Adoption
The following are some of the challenges in IoT adoption according to Ganesh Ramamoorthy- Research VP, Gartner.
â€śIoT technology per se is very simple based on sensors. The foremost challenge is ensuring the various devices (like air conditioners, washing machines and others with different sensors) talk to each other. In industrial scenarios, there would be refrigeration units and filtration. This heterogeneous environment needs the hardware equipment to talk to each other through sensors for IoT to work. That common language for the connected devices to intercommunicate is the biggest challenge. It is being dealt with various standardized protocols like CoAp, MQTT (machine-to-machine (M2M)/”Internet of Things” connectivity protocol) etc. IoT platforms are being developed even by Indian tech companies to enable the communication of different devices. Security is also a concern which will erase over time.
â€śThe biggest hindrance from the end user companies perspective will be the justification of IoT investments. They need to have a strong business case on how IoT will help their company, maybe cost reduction, increase productivity, improving sales, finding new customers, improving customer satisfaction. That justification to CFOs / CEOs and the stakeholders of the companies is extremely important to secure budgets for IoT projects of their organizations. The real hindrance is to completely understand and then justify the business viability of IoT projects. The IoT roadmap has to be related someway to the business objective of the organization. As long as CIOs achieve that business outcome with the pilot project there would be no obstacle for IoT to take off. Each company will need to evaluate its position and if it is essential for them to invest in IoT infrastructure. Some companies might not need IoT. Smaller companies can also benefit from IoT but they again need to justify those investments as the case with large enterprises.â€ť
Digital touchpoints are the smart devices with internet connectivity that is used for any interaction between a user/customer and a brand experience. Desktop computers, smartphones, laptops, tabs, smart TVs, and smart watches, etc. are the most common examples of digital touchpoints.
This incredible number of digital touchpoints and interactions will generate sheer volume of IoT data. Telecommunication companies can use these data to have better customer insight and deliver the kind of services the customer wants.
As per Heavy Reading report, the market is expected to grow from $1.95 billion in 2013 to $9.83 billion in 2020 at a CAGR of 26%. The report has identified 5 business application categories for the use of big data technology. Customer experience enhancement is expected to grow the most from $546 million in 2013 to $3.57 billion in 2020 at a CAGR of some 31%.
Accenture projects that the industrial IoT could add $14.2 trillion to the global economy by 2030, while the US economy will gain at least $6.1 trillion in cumulative GDP by that year. General Electric estimates that industrial IoT technologies will add about $15 trillion to global GDP by 2030.
Gartner predicts that IoT product and service companies will generate incremental revenue of more than $300 billion. Morgan Stanley forecasts that driverless cars will save the US economy $1.3 trillion per year once automated cars fully penetrate the market, while saving the world another $5.6 trillion a year.
How Telcos Can Leverage
High customer churn rates, slumping ARPUs, and stiff competition from OTT players are prevailing challenges faced by telcos across the globe. But an enormous opportunity lies ahead with speedy rise of the Internet of Things (IoT).
Telecommunication companies can leverage the Big Data generated by thousands of IoT devices and deliver more proactive and responsive customer service and maximize revenue.
- The IoTs give more touchpoints that ensure more ARPU
- Increased customer satisfaction and loyalty reduces customer churn
- Opportunities to launch new categories of services
- Expands cross-selling and up-selling opportunities
- Better customer insights help companies improve levels of service
- Greater operational efficiencies
The IoT brings forth a world of infinite possibilities making new amenities for consumers as well as new opportunities for businesses. Some of the use cases of IoT are given below:
Real-time IoT in Telecommunications
According to a GSMA report, on an average, 74% of total Asia Pacific mobile consumers are pre-paid, whereas in Europe, the number is 68% and in the US 16%. Subscribers in AP countries like India, Bangladesh, the Philippines, and Indonesia, etc. swap between multiple service providers whichever offers the best deal at the time. This means, there is almost 100% customer churn rate in Asia Pacific.
The only solution for the carriers is to understand a customerâ€™s behavior at a detailed level and make a suitable offer to keep the customer loyal. Gathering and analyzing data â€“ topping up their accounts, buying new SIM card, etc. â€“ from various IoT touchpoints, service providers can identify effectiveness of a particular promotion real-time and make instant adjustments to improve campaign uptake rates.
Apart from these, IoT enables telecommunication companies better perform real-time sensor-based monitoring, diagnostics, and affords better maintenance of communication towers/assets. Using big data generated by IoTs, service providers can improve quality of service and decrease operational costs.
The â€śCritical Capabilities for Wireless Telecom Providers, U.S.â€ť report published this year by Gartner, Inc. has recognized Verizon as the best service provider with a five out of five rating.
Verizon offers customizable IoT solutions to meet the specific requirements of any industry or organization. Some of the IoT-enabled business services of the company are asset tracking, condition-based monitoring, and wireless backup for managed ATMs, energy management, digital signage, car sharing, mobile health, mobile retail, and fleet management etc.
Real-time IoT in Healthcare
Rapid growth of the IoTs will transform healthcare industry dramatically by lowering costs and improving quality. Wireless sensor-based health monitoring devices are already at work today. With these devices, medical personnel can remotely collect patientsâ€™ data for diagnostics and evaluating treatment results.
The Masimo Radical-7Â®, a health monitor for clinical environments, collects patientâ€™s data and wirelessly transmits it to a remote display for notification purposes. The results provide a complete, detailed picture of the patientâ€™s status to a doctor to review however distant they may be located. The monitor boasts extremely high-resolution display of information, as well as a touch-based user interface that makes the technology easy to use.
For instance, using IoT devices hospitals can set up notifications that are automatically sent to the concerned staff when itâ€™s time for a patient to take medicine or when a test is due. Likewise, patients can also receive text messages on their phone to remind them of scheduled appointments.
Real-time IoT in Banking
The scope of Internet of Things is expanding rapidly and the banking industry has plenty of avenues to improve their customer experience and propel the industry to newer heights by using IoT data.
The day is not far when banks will have a holistic view of their customerâ€™s personal finances real-time. Banks can access the data captured by IoT devices of all kinds and use their data-driven insights to predict a customerâ€™s needs and come up with products, solutions or advice to help him/her making smart and financially sound decisions.
In this way, the Internet of Things will facilitate the banks to turn into an ever-watchful, always useful advisor and facilitator. This, in turn, will help in building customer loyalty and gaining a competitive edge in a highly connected, hyper-competitive market.
Carriots is working with the Banking industry for developing a solution to let any machine type request payments and deliver physical items on successful transactions. Once this technology is employed, new points of sale and vending machines can be easily integrated with mobile payment.
Real-Time IoT in Retail & logistics
Internet of Things is expected to have a huge impact on retail and logistics sector as well. Almost 10% of all IoT investments in 2013 were made by retailers. It is expected that annual investments in the Internet of Things will surpass $466 million by 2017.
Logistics companies have been using RFID (Radio Frequency Identification) to track containers, pallets and crates for some time now. This is primarily in closed loop systems and mostly concerning high-value goods as RFID is very costly. Massive investments in the Internet of Things technologies help in reducing costs for RFID and similar technologies. Once implemented successfully, this will make the tracking of goods on an item-level a feasible business case.
Advantages include inventory accuracy, reduction of administrative overheads, automated customer check-out processes and a reliable anti-theft system.
Real-Time IoT in Home Automation
The concept of automated homes dates back to the 1930s and with the advent of IoTs automated homes have turned into smart homes. This new technology allows the devices in a home to truly integrate and talk to one another with no user input.
Connected devices inside the smart home â€“ from ovens and fridges to deadbolts and garage doors â€“ can be controlled remotely via apps on smartphones and tablets even when the owner is out of the home. This means, a person can close the garage door from the airport, or confirm whether the air conditioner is switched off or not from office. Smart homes boast Wi-Fi-enabled cameras, connected motion sensors and smart smoke alarms. So one can monitor the house from anywhere via live video feed, email and text alerts.
Smart homes act on a home ownerâ€™s behalf for offering an assortment of lifestyle experiences, greater safety and security and save energy and costs. IoT enabled homes can also take care of themselves through automatic predictive maintenance. This helps in reducing costs and optimizes time.
IoT for Smart Cities as Government Initiative
In order to address the challenges of rapid urbanization, the Government of India has adopted a transformational approach and planned to develop 100 smart cities by 2022. Smart cities are highly advanced urban ecosystems that use information and communications technology of IoT and make a city more livable, sustainable, and responsive to urban challenges.
Smart cities make the best possible use of the interconnected infrastructure enabled by the IoTs resulting in better management of limited resources. The data received from multiple embedded sensors on smart devices could be used to reroute traffic and reduce accidents, identify hotspots of crime and target resources for crime reduction as well as avoid or mitigate the impact of natural calamities like a Tsunami.
In short, IoTs improve the quality of city life making better disaster management, pollution control, traffic management, waste management, water management and many other essentials.
Cisco is playing leading role in developing smart cities across the world. According to their data compiled through live projects from cities around the world, â€śA smart city can save energy by 20%, reduce water consumption by 50%, crime by 20%, traffic controlled by 30% and cut education costs by $3 a month and healthcare by $3 a month.â€ť
What about the Digital India initiative of the GoI?0