Is the Internet of Things Really Happening?

Over the last few years there has been much speculation about the inevitable growth of the Internet of Things (or Internet of Everything). Forecasts have suggested anywhere from 30 to 50 billion devices will be connected by 2020. Cisco has estimated that the global IoT ecosystem will have a value of $14.4 trillion by 2022, and IDC has projected yearly IoT market revenue to increase to $1.7 trillion by 2020.

Here we are now in 2016, a few years into the future they were talking about back then, and it may be a good time to take a look the current state of the IoT and see how it measures up to all of these lofty expectations. Are people really embracing IoT technology at this rate? Is this money really being invested?

connectedDevices.png

Connected Devices

First, let’s take a look at the number of connected devices. If we flash back to 2013, we find that Gartner released a report entitled “Forecast: The Internet of Things, Worldwide, 2013”. In this report, they predicted that the IoT will include 26 billion connected devices by 2020. Two years later, Gartner reported a total of 4.9 billion connected devices at the end of 2015, up from 3.8 billion in 2014. Gartner also revised their 2020 estimate, anticipating 20.7 billion connected devices by 2020, a decrease of 5.3 billion (20.4%) from their 2013 estimate. (It should be noted here that Cisco continues to anticipate as many as 50 billion by 2020).

So, according to Gartner, IoT adoption has not proceeded at the rate they had anticipated at the end of 2013.

One reason for the slower-than-expected growth is the difficulty faced when trying to implement IoT technology. In fact, Gartner anticipates that through 2018, 75% of IoT projects will take up to twice as long as planned.

Value of the IoT

Now, let’s consider the monetary value of the IoT and how that number has progressed. Cisco initially projected a value of $14.4 trillion by 2022. Within two years Cisco had increased this number to $19 trillion.

value.png

This highlights an interesting fact. Even though fewer connected devices are expected by this date, the total value of these devices and the underlying network is expected to be greater than it was when more devices were expected. Based on this, I think it’s safe to suggest that implementing IoT technology is turning out to be more expensive than originally thought.

This may be due in part to the fact that some enterprises are rushing headlong into IoT projects without the proper foresight and planning. Often it is a reaction to competitive pressure, based on a perception that a competitor is already moving forward with their IoT strategy, or simply in an effort to be the first and gain a competitive edge.


“I think it’s safe to suggest that implementing IoT technology is turning out to be more expensive than originally thought.”


Another answer may come from Gartner’s 2015 report: “Predicts 2015: The Internet of Things”, in which Gartner predicts that through 2018, there will be “no dominant IoT ecosystem platform”. They cite a lack of IoT standards and anticipate that IT leaders will be forced to compose solutions from multiple providers.

 

Read our White Paper on Choosing the Right IoT Software Platform

IoTPlatformWP_cover.png
Read It Now

 

 

Even when faced with these realities, however, enterprises are still moving forward with their IoT projects. The extra expense – though unanticipated – is not nearly enough to outweigh the potential benefits. The IoT is most certainly transforming the way businesses operate, and no one wants to be the last one to this dance.

IoT Investment

This is an important category as it will largely determine how quickly the industry moves to develop standards, and how motivated IoT solution providers will be to develop more powerful and more cost-effective solutions.
Recall IDC’s projection of annual market revenue reaching $1.7 trillion by 2020. It would stand to reason that if we are learning that IoT projects are coming in over budget and late, there is probably some distaste in the marketplace, and maybe IDC’s projection was a bit ambitious.

At the same time, though, if people are spending more on IoT initiatives than they had originally planned, perhaps IDC’s projection was a bit conservative. Let’s examine how things are taking shape.

In 2015, IDC reported that worldwide IoT spending reached $655.8 billion in 2014 and calculated a 16.9% CAGR (Compound Annual Growth Rate).

Well, 2015 is now in the books and we can see how IDC’s projections seem to be holding up. Their latest report indicates that spending in 2015 reached $698.6 billion, a CAGR over 2014 of only 6.53%. Had IDC’s anticipated CAGR proven accurate, 2015 revenue should have been closer to $766 billion.

Notwithstanding this fact, however, IDC continues to project a CAGR of 17% and an increase in spending to $1.3 billion by 2019, which would equal approximately $1.5 billion in 2020. It looks like IDC sees the IoT market cooling off a bit, though not much.

revenue.png
So, while the earlier projection has proven to be overly optimistic, it is clear that investments in IoT initiatives are continuing to increase with no end in sight.

If there is any kind of meaningful takeaway from all of this, I think it’s safe to surmise that IoT projects may be coming in late and over budget, but that doesn’t seem to have had much of an impact on continued investments. It is clear that business owners and executives see the value and have no interest in letting their competitor’s gain an edge.
So, was the IoT hyped a bit excessively over the last couple of years? Maybe a bit. But, it is also very real and happening right now.

Advertisements

Oh, The Possibilities … When the IoT Grows Up

5Ways.jpg


The Internet of Things is something like a gangly, acne-covered adolescent with knobby knees and a clumsy gait.
We can see the bright eyes, the long legs and strong hands, and we know it is chock full of “potential”, but it sure is awkward right now.

Notwithstanding all of this awkwardness, however, this clumsy youngster has already made a tremendous difference in the world. The very thought of its possibilities has sent a tremor to the core of our civilization, touching every aspect of our material and intellectual lives. Just consider the fact that the sentence you just read – as blustery and over-the-top as it may seem – is not even inaccurate. Sure, a person can still live a simple life without all of the trappings of modern technology or communication media (I assume?), living only from sustenance won by his or her bare hands directly from the natural world, never interacting with another living soul. I suppose this is possible, and maybe this person could make a strong case that his/her life remains untouched in any way by the Internet of Things. This person, however, will not be reading this and need not be a part of the conversation.

So, to reiterate: the Internet of Things – or at least the thought of it – is influencing every component of our world today. This is because it is not simply an evolution of technology; it the sort of technological/philosophical movement that transforms civilizations. On the order of agriculture, kingship, or industrialization.

Yes, it is that significant.

That is to say, the technological/ philosophical movement started by the Internet itself is that significant. After all, the words, images, videos, and applications that inhabit the regular old Internet are themselves ‘things’. The concept behind what we call the Internet of Things is simply the dawning of the realization that the Internet is not just about people communicating with people; it’s about everything communicating with everything.

Consider what we already see happening to:

 

Cities

In Oskarshamm, Sweden smart building technology has helped reduce the city’s power consumption by 350 MWh, reducing their carbon footprint by 80 tons of CO2. Houston, Texas has used new sensing technology to retrofit 40 municipal buildings for energy efficiency, delivering $3 million in yearly energy and water savings.

Entire cities are changing the way they govern their populations, the way they distribute resources, the way they police themselves. Cities are changing the way they transport goods and people, the way they measure and control their impact on their environments. Everything that defines what a city is and does is being transformed by not just new technologies, but the new ideas inspired the Internet of Things.

 

Agriculture

One of the foundational elements of civilization, a technological/philosophical movement that predates history itself, is being profoundly influenced by the Internet of Things. Farmers large and small are using networked data to maximize the already-known benefits of established practices (knowing what types of crops to plant when, knowing when and how much to water, etc.). Farmers have also had success safely and naturally controlling pests through the intelligent release of pheromones. Decreased resource consumption and increased yield are very tangible benefits that have the potential to solve some very serious problems related to food shortages and ever-increasing populations, while simultaneously reducing the environmental impact of farming and bringing the family-owned farm back into the global marketplace.

 

Industry

This is the realm of autonomous factories and self-healing machines. Through the convergent development of advanced computing power, sophisticated network technology, sensors, robotics, and analytic techniques, we are seeing the integration of industrial systems both vertically and horizontally. Machines to Machine communication, predictive maintenance, and continuous improvement programs are completely reinventing manufacturing.

Companies like Honda and ABB are using IoT technology to consolidate and organize their manufacturing and maintenance operations through systems of real-time communication and process automation. Companies are using advanced analytics to discover unknown opportunities for improved efficiency. Consider how Kennametal reduced their production cycle time by as much as %40 by simple modifications to their processes like changing the angle of a cut in a particular machining operation.

Real-time consumer data is helping companies be more responsive to the needs and expectations of their customers, and eliminating gaps between supply and demand. Predictive analysis is helping to reduce maintenance costs and incrementally improve production processes through systems of continual improvement. A unique quality of the impact the Internet of Things is having on Industry is its benefits extend beyond the marketplace. Whereas previously profit increases were sought by increasing the scale or speed of production, the new paradigm focuses on increasing efficiency, reducing resource consumption and eliminating waste. The new industrial landscape of smart, connected devices will incidentally lead to a cleaner, safer, more sustainable planet, which leads to the next item…

 

Environment

It is certainly possible to see new technologies as a double-edged sword in this arena. Historically, what humankind has deemed to be good for itself has quite often seemed to be detrimental to our environment. As the Internet of Things makes it easier for us feed and accommodate larger populations, and populations continue to grow, it is not difficult to see how this could negatively impact the environment. An interesting quality of the philosophical thrust behind most Internet of Things initiatives, though, is the tendency toward reduction and conservation.  Use fewer resources. Create less waste. Do as much as possible with what is available to us. In a way that may be unprecedented, this worldwide technological evolution may actually improve our relationship with the natural world.

 

Yes, the Internet of Things is a gangly, awkward, stumbling bunch of possibilities right now, but it is already changing our world. And while we may not have reached that tipping point yet – the point where what is possible becomes what is necessary, and a movement truly transforms our civilization – I think most of us can feel the axis tilting.

There will inevitably come a time when what is happening becomes what has happened, and we will only recognize the revolutionary quality of it when we look back at it in retrospect. In the case of the Internet of Things, I think we have reason to be optimistic.

(Originally published on the B-Scada, Inc. blog.)

OPC UA: The Communication Standard for the Internet of Things?

OPC UA

As we prepare ourselves for the expansion of the IoT (Internet of Things), many businesses today are looking ways to take advantage of the opportunities that are beginning to present themselves. Of course, as with anything new there are many questions and concerns.

Many organizations are struggling with interconnectivity. How do we get existing information systems to communicate with new information systems? If leveraging the IoT requires a wholly rebuilt information infrastructure and a complete reformatting of business processes – well, that’s just not going to work for most people.

There are also organizations who will have questions about how to make use of the unstructured data coming in real time from any number of different sources. How can they create the context to translate this endless stream of raw data into useful information?

And what about the scalability and flexibiilty needed to deal with growth and change. After all, if the changes implemented today need to be undone in order to keep up with the future needs of your organization, then is it really worth it?

Another common concern is that of security. Are we going to push sensitive information up to the cloud, where it may be exposed to any number of potential threats ranging from cyber-terrorism to corporate espionage? And even if our sensitive data is not being broadcast over the internet, how do we protect these interconnected systems from internal threats? How can we ensure that our employees and contractors have access to all of the information they need to do their jobs and nothing more?

These and many other questions are preventing some organizations from realizing the many benefits of the IoT. Some think it will be too difficult or expensive to implement; others may question the value of it. Fortunately for us all, these questions have been asked for several years, and there are answers.

The communication protocol often cited as the best fit for IoT applications has already been developed, tested and deployed in live environments around the world since it was fully released in 2009.

OPC Unified Architecture (UA) is platform-independent, service-oriented architecture developed and maintained by the OPC Foundation. As the interoperability standard for industrial automation, OPC has become an integral part of most SCADA (Supervisory Control and Data Acquisition) systems. As data systems expand beyond their traditional roles to include more sensor data and consolidate data from multiple systems, it makes sense that the OPC Foundation has remained at the forefront of the standardization process and and have developed a communication standard that has been embraced by proponents of Industry 4.0 and the Internet of Things – companies like Microsoft, Oracle, SAP, GE, and many others,

OPC UA is universally embraced because it directly addresses the obstacles faced by organizations involved in IoT implementation projects. The problem of interconnectivity, for example, is exactly the problem that the communication standard was developed to address. Today, OPC drivers exist for thousands of different devices, and many devices today are manufactured with embedded OPC servers to allow for exactly this type of interoperability with other devices and systems.

The concerns about the usefulness of multi-system data is addressed by information modeling. The OPC UA information modeling framework turns data into actionable information. With complete object-oriented capabilities, even the most complex multi-level structures can be modeled and extended. Information modeling also makes an OPC UA-based system significantly more customizable and extensible. As virtual representations of actual systems, information models can be modified or expanded to meet the changing needs of a modern company.

Of course, one of the most important considerations when choosing a communication technology is security, which is one of the great benefits of OPC UA. Security is provided in a number of ways, including: Session Encryption, Message Signing, Authentication, User Control, and Auditing of User Activity.

While it is difficult to say that there is anything “standard” about the Internet of Things, OPC UA is the closest thing we have to a communication standard, and every day it is becoming more widely accepted and adopted. To learn more about the synergy between OPC UA and Industrial IoT applications, read the following whitepaper: https://opcfoundation.org/wp-content/uploads/2015/04/OPC-UA-Interoperability-For-Industrie4-and-IoT-EN.pdf

** B-Scada’s IoT software is built on OPC UA and leverages the full power of these capabilities to provide fully customizable and extensible applications that consolidate and organize data from disparate sources for secure real-time visualization on any device. Learn more at http://scada.com

The Industrial Internet of Things (IIoT): Are We There Yet?

The cat is no longer in the bag. In fact, she’s already rummaging through businesses and homes in your hometown – maybe in your neighborhood. Before our eyes, the Internet of Things (IoT) has evolved from a nice idea to a measured experiment with tangible results. As expected, early adopters are primarily large enterprises with significant resources to dedicate to new technology, but the IoT does not always require a substantial investment. Sometimes, it is as simple as finding a better way to use your current technology and associated data. Some industrial enterprises have already seen the benefits of machine intelligence and the marriage of people and processes. Other organizations are using the IoT to provide better customer service and more targeted marketing. Is it safe to say the experiment is over? Have we burst through the hype bubble to arrive at a practical understanding of what’s at stake?

The Industrial IoT promises more efficient production processes, reduced resource consumption and waste, safer workplaces, and more empowered employees. There are many success stories already, and more are sure to come.

Honda Manufacturing of Alabama

Honda’s largest light truck production facility in the world – a 3.7 million square foot plant – was faced with a problem all too common to large manufacturing facilities. Over the years, a number of different automation systems were introduced to help streamline production. With operations including blanking, stamping, welding, painting, injection molding, and many other processes involved in producing up to 360,000 vehicles and engines per year, it is not surprising that they found themselves struggling to integrate PLCs from multiple manufacturers, multiple MES systems, analytic systems, and database software from different vendors.

Of course, on top of these legacy systems, Honda continued to layer an array of smart devices on the plant floor and embed IT devices in plant equipment. The complexity introduced by this array of automation systems turned out to be slowing down the operations they were intended to streamline.

After reorganizing their business structure to merge IT and plant floor operations into a single department, Honda proceeded to deploy a new automation software platform that enabled them to bring together PLC data with the data coming from MES and ERP systems into a common interface that allowed the entire enterprise to be managed through a single system. This also allowed Honda to manage and analyze much larger data sets that revealed new opportunities for further optimization. While this reorganization required a significant investment of resources, they were able realize benefits immediately, and ultimately positioned themselves to maintain a competitive edge through the next decade or more.

ABB

As one the world’s foremost suppliers of industrial robots and modular manufacturing systems, ABB has had their finger on the pulse of industrial technology for years. As the IIoT emerged, ABB was quick to find ways to take advantage of the opportunities presented. The company has installed more than 250,000 robots in numerous industries worldwide: plastics, electronics, pharmaceuticals, food and beverage, and many more.

Before the IIoT, in order to provide service ABB needed to dispatch technicians to remote sites to perform diagnosis. Today, a small operations team in a centralized Control Center are able to monitor in real-time precise and reliable information about each robot’s current status and activity. This has not only enabled ABB to substantially reduce the cost of their maintenance and operations, but the data collected has allowed them to develop a set of predictive KPIs to anticipate problems before they occur, helping their customers benefit from less downtime and increased productivity.

Kennametal

Kennametal was able to increase the productivity of their discrete manufacturing operations by using machine tool data and complex event processing. Whereas the traditional approach to increasing productivity was to reduce downtime, Kennametal focused on improving productivity by reducing cycle time. The solution employs complex event processing software that gathers and analyzes production data in real-time. Kennametal was able to understand which operators out-perform the production plan and guide less-experienced operators toward improvement. As an example: in one machining operation it was determined that taking a fast, shallow cut reduced cycle time by 16% over the slower, deeper cut the production plan called for. Best practices of this sort have been shown to reduce Kennametal’s cycle time by 20-40%.

The examples provided by Honda, ABB, and Kennametal are just a few of the hundreds of different IIoT success stories that can be found on the internet. Companies like GE, Ford, Intel, and dozens more are pouring literally billions of dollars into IIoT technologies this year alone. This is not an investment in possibility and hope. The IIoT is very real and it is happening right now. Of course, as with anything new there will be plenty of hurdles and blind alleyways, but many of the initial obstacles have been discovered and overcome. The foundation is in place and the arrow is pointing up. Companies are no longer asking: Should we? They are asking: How can we and how quickly?
**B-Scada has provided best-of-breed data visualization solutions since 2003, providing industrial and commercial customers the tools they need to transform their processes and empower their personnel to maximize efficiency, productivity, and safety. Learn more at http://scada.com.