Impact of Internet of Things

There has been a significant increase in the maturity of solutions being built for IoT, especially in healthcare, retail, energy and utilities, and the automotive sector. Let’s take a closer look

- Compiled by Preeti Gaur

The Internet of Things, or IoT is the network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment. IoT encompasses hardware (the things themselves), embedded software, communications services and information services associated with the things.

Emerging Trends

IoT, which excludes PCs, tablets and smartphones, will grow to 26 billion installed units by 2020, representing an almost 30-fold increase from 0.9 billion in 2009, according to Gartner, Inc. Gartner said that IoT product and service suppliers will generate incremental revenue exceeding $300 billion, mostly in services, in 2020. It will result in $1.9 trillion in global economic value-add through sales into diverse end markets.

Due to the low cost of adding IoT capability to consumer products, Gartner expects that ‘ghost’ devices with unused connectivity will be common. This will be a combination of products that have the capability built in but require software to ‘activate’ it and products with IoT functionality that customers do not actively leverage. In addition, enterprises will make extensive use of IoT technology, and there will be a wide range of products sold into various markets, such as advanced medical devices, factory automation sensors and applications in industrial robotics, sensor motes for increased agricultural yield and automotive sensors and infrastructure integrity monitoring systems for diverse areas, such as road and railway transportation, water distribution and electrical transmission.

“By 2020, connectivity will become a standard feature, even for processors costing less than $1. This opens up the possibility of connecting just about anything, from the very simple to the very complex, to offer remote control, monitoring and sensing,” said Peter Middleton, research director at Gartner. “As product designers dream up ways to exploit the inherent connectivity that will be offered in intelligent products, we expect the variety of devices offered to explode.”

Economic value-add (which represents the aggregate benefits that businesses derive through the sale and usage of IoT technology) is forecast to be $1.9 trillion across sectors in 2020. IoT value-add is composed of the combination of mature IoT, which is already yielding benefits, and a high-growth emerging IoT opportunity. It is derived from a combination of sector-specific technology (such as connected, automated manufacturing systems), and more generic, widely used technology, such as the suite of ‘smart building’ technologies, including light-emitting diode (LED) lighting and smart HVAC systems.

Emerging areas will witness rapid growth of connected things. This will lead to improved safety, security and loss prevention in the insurance industry. IoT will also facilitate new business models, such as usage-based insurance calculated based on real-time driving data. The banking and securities industry will continue to innovate around mobile and micropayment technology using convenient point-of-sale (POS) terminals and will invest in improved physical security systems. IoT will also support a large range of health and fitness devices and services, combined with medical advances, leading to significant benefit to the healthcare sector. Emerging connected sensor technology will lead to value creation in utilities, transportation and agriculture. Most industries will also benefit from the generic technologies, in that their facilities will operate more efficiently through the use of smart building technology.

Internet of Things Fosters Business Success

Over the last decade, we have seen the transition from connected computers to connected smartphones and now to connected devices. This wave of technology evolution, called the Machine to Machine (M2M) or broadly the IoT is where intelligent devices communicate with their surrounding ecosystem (humans, machines, applications, or other smart devices). Analysts estimate that we will have over 50 billion M2M devices by the end of the decade. They will outnumber mobile phones and personal computers combined. Cheaper, more-powerful devices, faster LTE speeds and low-cost mobile network connectivity will drive this explosion in connected devices and the data generated by them.

Industry research suggests that the India opportunity for IoT will reach USD 98.38 million by 2016. The business will be driven by healthcare, utilities and automotive industry. Let us see how IoT will impact the Healthcare, Retail, the Energy Unitlities and the Automotive Industry.

Impact on Healthcare

Today, consumers are using devices to monitor their health and fitness stats via smartphone applications that track daily movement and calories burnt versus intake, or devices that track steps and monitor metrics such as body temperature, stress and even sleep quality. By 2018, ABI Research estimates the projected revenue from wearable wireless healthcare devices could top $6 billion. In addition to providing data to aid in clinical scenarios, wearables also have the potential to manage conditions like autism and attention deficit disorder, and even prevent seizures in people living with epilepsy.

Wireless connectivity embedded into sensor-laden devices allows for an individual’s personal data to be transmitted to ‘the cloud’ for analysis and safekeeping. It also turns the devices we already have, our smartphones and tablets, into helpers that can take the workload off of the sensing devices themselves. This is critical, since one of the biggest challenges for the emerging wearable healthcare market is data processing and storage. Our bodies, as well as our behaviors, generate a wealth of data for wearable healthcare devices. The sheer quantity of that data constantly being tracked and collected will be staggering. Further complicating matters, the raw data will need to be processed and analyzed based on additional contextual information for it to have any real value. For example, a clinician looking at raw data from a patient showing a significant jump in heart rate might come to a very different conclusion if he knew the patient was sleeping versus running a 5K. The solution just might require a fusion of inputs to a single application that can act as the consolidation point for multiple sets of information. It would not only act as a repository for the data, but also conduct the data processing necessary to ensure only important changes in a person’s health would be forwarded, safely and securely, to the appropriate clinician.

While there is no denying that wearable technology has moved far beyond the concept stage, its impact on the healthcare industry is only starting to be felt.

Impact on the Retail Industry

The retail industry has already undergone a wave of disruption with the onset of e-commerce and online retail. From transforming the internal business processes to changing the way retailers market their products to end customers, the retail industry stands to gain a lot from the IoT along the following areas in Retail:

•    Supply Chain Management – With IoT, retailers will have information about the product or raw material and the respective suppliers, logistics providers and which customer it is intended for or which product the raw material is to be a part of. Such information will enable retailers to better manage their inventory, reduce order fulfillment times and bring down expenses. In short, retailers will be able to re-think and re-engineer their logistics systems.

•    Inventory & Warehouse Management - Usage of radio-frequency identification (RFID) is already extensive in inventory and warehouse management. It is likely to be extended with more connected services in the future. Smart shelves and smart inventory can signal when they are going empty or when a perishable product is going to expire. These events can then automatically trigger replacements at the store level and communicate this all the way back into the supply chain. Retailers will be able to fully automate picking operations by using data from smart shelves and deploying robots in the warehouse.

•    Marketing - Beacons that recognize the presence of a mobile operating system and a particular customer on the shop floor will bring in new ways of targeted proximity marketing inside stores. Based on browsing history, social presence, and previous online buying history, retail stores will be able to more accurately fulfill a customer’s buying requirements and even offer special offers on items that the customer intends to buy.

•    In-Store Experience - As traditional retailers will have to increasingly cope with the shift of consumers to online retail, there is a good opportunity for retailers to employ IoT to help revive physical stores and improve a customer’s shopping experience. It is quite likely that the in-shop experience will act as that competitive differentiator.

The Fast-Moving Consumer Goods sector can benefit from the deployment of no-checkout counters, where smart phones docked to a shopping cart will be able to automatically checkout items dropped into it by reading RFID or other item-level tagging technologies.

Retail apparel stores could start to offer virtual changing rooms, which will be equipped with a RFID reader, camera and a tablet. Based on the data it senses from a customer’s selection of apparels, the changing rooms will offer ways in which they are able to virtually try out clothes, try different sizes before finalizing on a purchase. Smart checkout counters with automated picking services would then deliver the purchased items at the checkout counter giving the customers a hands free shopping experience, much like an online store.

Shop floors equipped with cameras using real-time video analytics will be able to sense a customer’s mood, giving them a chance to interact with a personal assistant to help them with a more personalized shopping experience.

Impact on the Energy & Utilities Industry

The number of advances in M2M technology has initiated energy-efficient innovations, which are driven by Big Data analytics and M2M Application Platform. According to a report by Deloitte, energy and utilities are estimated to drive future market growth of M2M. This is a result of the Government of India’s serious initiatives to deploy smart energy meters. Energy and utilities application markets are expected to grow at a CAGR of 38.12% from the period of 2011-2016.

Globally, it is estimated that by 2020 there will be around 1.5 billion M2M communications in the utility business, majority of which will be Smart Meters. Focused on the next generation energy grids called Smart Grids, M2M technology addresses some of its key issues like grid security, failure in distribution network, line losses, and overloading. As the energy resources are depleting day by day, the worldwide focus has shifted towards achieving energy conservation and green energy with M2M solution. M2M applications have enabled power utilities to control assets from anywhere, and at any time.

In addition, it is estimated that the Energy and Utility sector will be completely dependent on renewable energies, and will result in a share of 20 percent electricity from renewable sources by 2020. For the renewable energy sector M2M technology brings sophisticated solutions for some of its key issues in renewable energy installations, plant monitoring, fault management, and performance monitoring.

Buildings consume enormous amount of energy and M2M technology enables energy efficiency within buildings. Smart building systems can be used to control every facet of the environment from security, climate, and lighting. Smart buildings drive passive asset monitoring, energy savings, control carbon emission, and yields payback in few years. Consumers have become very active in managing energy consumption. Smart home market is growing with the emergence of smart meter and government incentives to support consumer energy efficiency.

Impact on the Automotive Industry

Sensors and Software are the Most Instrumental Technologies in the mass-production of cars. As more autonomous features are being incorporated into cars, it will enable them to be manufactured without some of the equipment that is commonplace today. Connectivity in the cars market is huge and it will achieve large penetration in the years to come. More than 200 researchers, academicians, practitioners, university students, society members and government agencies in the field of autonomous vehicles, participated in the IEEE Survey to reveal opinions about the future of driverless cars. When asked to specify the year in which specific equipment will be removed from mass-produced cars, the majority of respondents  believe rearview mirrors, horns, and emergency brakes will be removed by 2030 and steering wheels, and gas/brake pedals will follow by 2035. Another positive development from the connected cars apart from automation is fuel efficiency and reduced carbon emissions. With real-time data-collection and analytical capabilities in M2M, connected vehicles have the potential to be tremendously fuel-efficient.

Dynamic Autonomous Technologies: Advancements in technology will be the most instrumental in the continued development of driverless vehicles. More than half (56 percent) of respondents believe that sensor technology is most essential, followed by software (48 percent), Advanced Driver Assistance Systems (47 percent) and GPS (31 percent). Creating digital maps of the road is also a necessary function for allowing autonomous vehicles to travel safely on the roads. Nearly three quarters (74 percent) of the respondents indicated that complete digital maps of the world will be available within the next 15 years.

While autonomous cars will prove to be beneficial around the globe, the majority of experts (54 percent) believed that North America would most benefit from driverless vehicles, with Europe second (28 percent) and Asia (17 percent) rounding out the top three.

Through IoT, all sections from enterprises to consumers will uncover new ways to manage devices effectively, ultimately conserving our resources, saving money through smart meters, home gateways, smart plugs and connected appliances or any other connected device.

Information sources: Trends: Gartner; IoT for Healthecare: Broadcom India; IoT for Retail: SAP Labs; IoT for Energy and Utilities: WebNMS; IoT for Automotive: IEEE

Asia’s first IoT innovation hub for ESDM ecosystem in Bangalore

Asia’s first end-to-end ‘Internet of Things (IoT) Innovation Hub’ is to be set up in Bangalore. It is a joint intitiative of Cisco, in a strategic alliance with Electronics City Industries Association (ELCIA). Internet penetration is growing excessively in India, so this collaboration will help establish the foundation for a new ecosystem to help Electronic System Design & Manufacturing (ESDM) companies and other companies of electronic city engaged in IoT product development. ELCIA has been chosen for this ambitious project as it is the only brown field ESDM cluster in the country, which has received an in principal approval for a financial grant from the Government of India to spur innovation in product design and manufacturing.

This initiative will help address the domestic demand for electronics hardware in the country which is projected to increase to USD 400 billion by 2020 as per a Task Force report commissioned by the Department of Electronics and Information Technology (DeitY). It will further allow local manufacturers to capture this growing market opportunity and save precious foreign exchange for India. The focus of the project is to use the network to deploy digitally enabled transportation, healthcare, education, utilities, energy grid and real estate in cities.