Last week Hass, Mark, and myself attended the Internet of Things World Conference in Santa Clara, California. Attendees came from all over the world to learn, share and discuss the Internet of Things (IoT). It was four days jam packed with workshops, keynote speeches, breakout sessions and vendor exhibits. We spent the first day in a workshop discussing both the technology and business behind the Internet of Things. Our next three days were spent selecting and attending various talks about everything IoT. Between sessions we would hit up the showroom floor to visit vendor booths and view live demos. We learned a great deal of information, so I am going to try to impart some of that knowledge by sharing some of the key points from the conference.
First, What is the Internet of Things?
The Internet of Things refers to the billions of devices and sensors which connect to the internet as well as the communication amongst and data generated by these devices. It enables us to collect data from objects in ways that haven't been available before, allowing companies to improve the products and services we use on a daily basis.
OK, now that we all have a general feel for what IoT is, let's jump right into some of my key takeaways from the conference.
1. IoT is enabling everything to be sold as a service
There is a definite shift coming in how companies interact with their consumers. In today's world, the business model of most companies is product based: the company manufactures a product and the consumer buys said product from a retailer. The consumer now owns the product they have purchased and is solely responsible for care and upkeep. If the item ceases to function, the consumer has to make an unexpected purchase to replace it. In the near future, IoT solutions will allow companies to move from directly selling a product, to instead selling the service the product performs. The consumer would then pay for the usage of the item. Sensors would be placed in and around the item to collect data for usage as well as the health of the item. This way, when a device breaks the company would know what specific part malfunctioned and would be able to replace it very quickly. The consumer would no longer have to keep an inventory of replacement parts, nor employ a team of general service technicians.
Rolls-Royce has been employing this business model for over 50 years in their jet engine division. Customers pay a fixed amount per flying hour of each jet engine in return for a full accessory and engine replacement service. This has been dubbed "Power by the Hour."
How does this work in the consumer market, you may ask? Well, someday in the future you may pay for each load of laundry your washing machine washes instead of laying down a large sum of money up front. Kind of interesting, right?
2. IoT is an ecosystem where companies will have to work together
We all know IoT is about connecting devices to the internet and generating data, but there is quite a bit more to it than that. Once devices have generated this data, the next task is to get it to the cloud to prepare it for analysis. Now, since there is a plethora of devices and sensors which can be used to collect data, a device agnostic data platform is a necessity (more on this in a moment). Once the data is streaming into the platform, it is time to perform some analytics to create new services, enhance the product, etc. You cannot just blindly walk into the data with an analytics team lead by data scientists and expect to gain anything. The value of analytics comes from combining your data with your business insights. A subject matter expert in your business area must consult with the analytics team to draw any meaningful conclusions from the data.
So, a list of what it takes to assemble a full IoT system would be: sensor/device manufacturers, IT personnel, data backhaul specialists, big data gurus, data scientists, subject matter experts, and systems integrators. Basically, no single company will be able to create a full end-to-end solution to corner the market in IoT; everyone will have to find their niche. For example, one of the systems in IoT is the backhaul which connects the Operational/Information Technology to the internet. There are various types of backhaul solutions such as 3G/4G/5G, low-power wide-area, wifi and fiber, among others. Many companies are finding their unique place within IoT by offering expertise in backhaul solutions (e.g. Sigfox). With many subsystems in the greater system that is IoT, there are plenty of opportunities for companies to carve out their section of expertise.
3. Platforms, Platforms, Platforms
One common theme we heard at the conference was everyone talking about their data platform. This is a very important part of any IoT system, as it is where all of your data and analytics reside. It has to be device agnostic, easy to integrate with, flexible to various analytics engines, and secure. After listening to different talks and walking around the showroom floor, it became apparent that everyone and their dog had created their own IoT platform. Most of the major tech companies like Microsoft, Amazon, IBM and Samsung have platform offerings, but there are also smaller companies (ThingWorx, acquired by PTC) as well as some names you might not have expected (Verizon, GE).
These are still the early days of IoT, so there is bound to be some growing and maturing of these IoT platforms. However, I can't help but think a lot of these platforms are going to fizzle out. Consumers and businesses will naturally flock to the few which are the easiest to develop for, have good customer service, have competitive pricing and integrate smoothly with existing infrastructure. As the world of IoT matures, we should gain quite a bit of insight into which platforms stand out from the pack.
We've all heard about data breaches over recent years where financial or other information has been stolen. Well, with IoT there will be a lot more data to secure than we have ever dealt with in the past. The most recent estimate I can find for the amount of data that will be generated in 2020 was done by International Data Corporation in 2014. Their findings point to approximately 44 zettabytes of data being created. To put that in perspective, that is 44 trillion gigabytes. In 2013 we created 4.4 zettabytes of data, which means in a mere seven years we will have increased data generation by tenfold.
That is a lot of data about things in our lives to keep secure. Quite a few sessions at the conference placed emphasis on securing your IoT systems from end-to-end. This starts with creating an architecture which lends itself to enabling data security and ends with knowing your local cyber crime unit to be prepared in the case of an attack. Large companies will usually have an in-house data security team, but what about smaller companies which cannot afford to staff a full security team? Luckily, there are plenty of consulting companies which specialize in data security. These white hat hackers evaluate your system -- usually by actually breaking into it -- and then work with you to fix the security gaps. It is a responsibility of every company out there to make sure their consumers' data is secure and will not be compromised.
5. Where are the standards?
The IoT landscape is kind of like the wild west right now. Everyone is out there doing things their own way to see what works. There are very few standards in the world of IoT, and the ones that are out there are competing with each other. Where are the standards at? To answer this question, we have to look at the consumer market for IoT. Currently, the consumer market is in the early adopter phase. One of the current applications of consumer based IoT is the smart home. There are a few different smart home ecosystems to choose from -- SmartThings, Nest, ADT, Wink -- but they communicate in slightly different methods and don't play nicely with each other. As more consumers move into the world of IoT, the community will grow and generate feedback of likes and dislikes. Eventually, more companies may come together with the community to create a consortium with the goal of standardizing a few aspects of consumer IoT. In short, IoT is a new and exciting frontier for techies and non-techies alike to explore, expand and settle.
The Internet of Things World Conference was a great experience for us, shedding some light on the platforms, ecosystem, structure, security, standards, and where IoT is going in the future. What are your thoughts on IoT?