GEAR UP FOR IOT REVOLUTION

The Internet of Things (IoT) is set to revolutionize the way we see and use everyday things. Cities around the world are experimenting with IoT technology to improve the lives of their citizens; industries and organizations are using it to reduce costs and product improvements. Given these advances and the potential benefits, is our country really geared to exploit this revolution?

By Amit Singh

Over the last two years, the IoT space has become extremely fragmented, with IoT standards being largely left undefined. And yet, there is a huge demand and need for IoT-based technologies that make possible new business opportunities, bring down the cost significantly and optimizes infrastructure.

Race for dominance

The IoT platform dominance started with IBM’s Watson IoT platform positioned as “Watson for everyone.” Reportedly, Watson services up to 6,000 clients across automobile, retail, electronics, and transportation among other verticals. From American Airlines to BMW, Watson has been snapping up big-ticket clients who are reportedly sitting on terabytes of data.

According to reports, there are over 400 cloud platforms in the market. And there is a rush to own the next IoT cloud platform with most major IoT cloud platform vendors offering end-to-end solutions — data analytics, application enablement platform, network connectivity, edge computing and management and automation. Many vendors are transitioning to IoT cloud through acquisitions, investments, and collaborations. For instance, Cisco acquired Jasper Technologies for its cloud-based IoT service platform. The acquisition strengthened Cisco’s IoT portfolio for delivering and accelerating IoT adoption for clients. Further, IBM has recently announced IoT partnerships with Kone, KPIT, Avanijal Agri Automation, Tech Mahindra, Acculi Labs, Arrow Electronics, and Reliance Group’s UNLIMIT, in India.

Undoubtedly, the IoT ecosystem is heavily fragmented with industry leaders following the buy, build and integrate strategy. Microsoft’s Azure recently unveiled its industry-leading IoT solutions for the manufacturing sector in India. The three IoT solutions, powered by three start-ups — Precimetrix, Teramatrix, and Covacsis Technologies —, will help the manufacturing industry gain a digital edge and get predictive insights. While Amazon had the first mover advantage in the cloud, the AWS IoT platform has not made much industry buzz and earned competition from Oracle’s IoT cloud platform over speed capabilities.

“Presently, hardware OEMs, analytics vendors, OT vendors, vertical-specific emerging vendors and cloud vendors are all exploring partnerships to create pre-validated end-to-end edge computing solutions. Most of these partnerships are opportunistic in nature and therefore have a direct bearing on the success or failure of IoT projects currently being executed,” shares Santhosh Rao, Principal Research Analyst, Gartner.

Exponential growth

Despite its slow start in the IoT arena, India is rapidly catching up with other developed economies and rapidly emerging as a hub for IoT solutions. While the global IoT market will exceed $300 billion by 2020, the Indian IoT market is poised to reach $15 billion by that year, accounting for 5 percent of the global market, according to a NASSCOM study. IDC predicts India IoT market to reach $34 billion by 2021.

The IoT sector is set to get a major boost from industrial IoT, which currently accounts for 60 percent of the total market and includes integration of physical machinery with networked sensors and using the data for faster and more efficient operations.

Consumer IoT, which includes smart home devices as well as wearable, accounts for the remaining 40 percent of the IoT market. The consumer IoT’s share is set to rise to 45 percent by 2020, as per NASSCOM report.

“In India, while the industry is at a nascent stage, industrial applications of IoT primarily in manufacturing, healthcare, automobile, retail, and transportation & logistics sectors are expected to drive IoT revenues by 2020,” says Som Satsangi, MD, HPE India.

Adds, Meetul Patel, COO, Microsoft India, “In a mobile-first and cloud-first country like India, there exists a new $100 billion opportunity to leverage intelligent cloud and intelligent edge solutions across industries. In fact, CXO’s are focusing on building competencies across IoT technology, manpower skill-sets, and business models, to build a scalable, conducive and competitive business.”

Further, the Indian government’s Smart Cities project is expected to play a vital role in the overall growth of the market. The World Bank and the Asian Development Bank (ADB) are expected to provide loans of $500 million and $1 billion, respectively, to India for this project.

“IoT will see large adoption in the Smart City projects, with focus on areas including intelligent transport system, smart city maintenance, smart lighting, waste management, and water management,” states Saivijay Khanagav, Senior Director, Partners & Channels, India & SAARC, CA Technologies.

Though not an entirely novel concept, edge computing, on the other hand, has reinvigorated the Industrial IoT movement. According to Market Research Future, a firm specializing in ICT sector, the global edge computing market will amount to $19.4 billion by the end of 2023.

Edge computing exists very close to the sources of data which it overlooks and manages information from. As it is capable of gathering information in close proximity to data sources, it also effectively deploys analytics. Edge computing is effectively positioned for the wave of Industrial IoT that has been growing worldwide.

Analytics takes center-stage

The explosive growth in the number of devices connected to the Internet of Things (IoT) and the exponential increase in data consumption only reflect how the growth of big data perfectly overlaps with that of IoT. The management of big data in a continuously expanding network gives rise to non-trivial concerns regarding data collection efficiency, data processing, analytics, and security.

It is clear that without a new breed of analytics tools, it will be impossible for a data scientist to generate the necessary insights from IoT data. “Collecting data is just a part of the challenge,” says Rahul Meher, MD, Leon Computers. “The ‘value’ comes from being able to analyze, interpret and represent that data in a way that has true meaning and worth. It is this that will define a successful IoT platform.”

“The beauty of the IoT lies in real-time data analysis, effectively giving businesses a birds-eye view over mechanical processes, fleet locations, warehouse conditions – even employee activity,” he adds.

The additional data provided by the IoT not only enables organizations to generate real-time insights that benefit them in the present but also helps them to foresee future business trends in advance. IoT sensors combined with predictive analytics will also be able to tell businesses when physical components are likely to fail, enabling them to carry out vital maintenance work before the disruption occurs.

Partner opportunities

“Indian enterprises have moved from the ‘what’ and ‘why’ stages to the ‘how’ stage of IoT maturity. Organizations are realizing the business value that is brought in by IoT, with heightened awareness and aggressive plans to deploy an IoT solution over the next 24 months,” predicts Rishu Sharma, Associate Manager, Cloud and Datacentres, IDC India.

In fact, many of the early adopters are implementing IoT to see the effectiveness of the solutions. “Most of our manufacturing customers have either implemented pilot projects on IoT or testing the waters. We have recently executed projects worth Rs 15-20 lakh for three of our manufacturing customers and have 6-7 projects worth Rs 20-60 lakh in the pipeline,” reveals Girish Madhavan, Director, Quadsel Systems.

For solution providers, IoT market offers immense revenue generation opportunities in the following areas:

• Business intelligence and analytics for decision support
• Security level management and performance management
• Professional services including consulting, integration and software development
• Connectivity and communication services, associated hardware, devices and components

“Both IoT and edge computing require real-time collection and analysis of data which is supported by cloud infrastructure. Along with on-premise support, organizations will require a system to maintain, monitor, secure IoT applications and ensure optimal performance. All our partners have the experience of delivering solutions for these essential requirements,” says Venkatraman Swaminathan, VP & Country GM, IT Division, India & SAARC, Schneider Electric.

Further, with IoT there will be a shift from mass production to mass customization. The goal is that the customers will have a better experience with customization and products will turn into the platform. The customers will be able to choose what they want from the product.

Neel Shah, MD, Insight Business Machine explains, “Businesses have realized the value of working closely with all the stakeholders for IoT. Over 70 percent of IoT deployment involves stakeholders from multiple departments including IT, business and other decision makers; thus, requiring a holistic approach to creating and sustaining the value from IoT projects.”

Additionally, vendors should look at building vertical use cases, considering 90 percent of IoT platform decision-making will happen between the next 6-18 months, shares Sharma of IDC.

Road ahead

With supportive government policies favoring the IT spurt and digitization efforts multiplying at an unprecedented rate, IoT is the next big trend that factions will fight to dominate in the market space. “This although is indicative of modernized ecosystem also has the negatives of fragmentation being associated with it. Fragmentation is the unique feature of a device that makes it incompatible to mix and match with other company products or devices, making the user rely on the one company for all its components,” explains Swaminathan of Schneider.

The key takeaway for enabling enterprise IoT is that open source collaborations and interoperability is the key to success. The overwhelming sentiment is for a neutral platform, where general standards can be developed for use in an open ecosystem and businesses can profit by offering SaaS solutions on top of it.

Fast Facts

• Telecom is the largest sector being served by IoT in India. Of the total revenue earned by IoT industry in India, 36 percent comes from telecom.
• Electronics comes second at 29 percent, followed by oil & utility sector at 23 percent of IoT revenues in India.
• Finance, retail, and healthcare; the 3 big sectors in terms of size, are late adopters of IoT, providing single digit millions in revenue to IoT sector.
• Industrial IoT accounts for 60 percent of the total IoT market.
• Consumer IoT, which includes smart home devices as well as wearables, account for the remaining 40 percent of the IoT market. This is set to change, with consumer IoT’s share rising to 45 percent by 2020.
• There are currently more than 400 companies providing IoT related services.
• IoT presents opportunities for players across the value chain, with application vendors expected to garner 50 percent share of the Indian IoT market.