The arrival of IoT devices is a reality. We are no longer in an early adoption phase, but more and more devices of this type are coming onto the market. IoT is already playing a key role in the digital transformation processes of companies and the current performance of this type of device will only increase in the coming years.
The IoT will bring value to the consumer but can also be used to collect data in industrial operations, in cars, drones or any other type of device. In short, what the IoT promises is an increasingly connected world.
What is the degree of implantation of IoT devices?
As can be expected, the implementation of IoT in different economic sectors is uneven. While there are some sectors such as intelligent cities for which it is essential to have devices to collect data, in other sectors its implementation is taking longer.
These industries that are still resisting the adoption of IoT are characterized by being sectors with a long history, a defined mode of action and a chain of command reluctant to change.
Recent estimates suggest that the number of IoT devices in the world will reach 36.13 billion by 2021. Each month, 328 million new devices connect to the Internet, and by 2022 it is expected that every household will have 500 connected devices.
IoT in industry
Although almost all industrial sectors are investing or planning to invest in IoT, the degree of implementation varies by industry. In any case, thanks to IoT by 2030, the application of technology to industry is estimated to generate $14.2 trillion, which translates into a 1.5% increase in global GDP.
The industries and sectors that are betting the most on IoT are, in this order, the financial sector, health, telecommunications, industrial production, retail, the energy sector and transport.
The practical translation of the IoT implementation is not the same in all industries or in all companies. That said, IoT applications for vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) solutions are the fastest growing, although the largest investments are in the manufacturing and transportation sectors. Both sectors will exceed $150 billion in investments by 2022.
In Spain, investment in IoT in 2017 was 12.9 billion euros, a figure that will reach 20.8 billion in 2020.
In short, all this investment means that 45% of Western companies will develop joint applications of IoT, Artificial Intelligence and analytical technologies.
What factors are important for the correct implantation of the IoT?
One of the technologies that promises to boost the growth of the IoT in a definitive way is the irruption of the 5G. At this point we will move from IoT to Massive IoT, since the density of connected devices will be multiplied by 100 (LTE-M supports 100,000 devices per km 2), while 5G will allow 1,000,000 devices per km 2.
On the other hand, the generalization of 5G will bring about the creation of so-called platforms, which are the software that connects IoT ecosystems, managing data flow, device management or data exchange between applications.
Some of these platforms already exist, such as Orange Live Objects, which allows the end-to-end design of IoT solutions, being able to access the configuration and management of the device park, message decoding, rules engine and secure data storage, incorporating open APIs for the exchange of information with business applications and providing materials and manuals to make the adoption and design of IoT solutions much more accessible.
On the other hand, cybersecurity will take on a very important role, being one of the major concerns of companies. Thus, the global investment in cybersecurity applied to IoT has reached 1,325 million euros in 2018 and will exceed 2,700 million in 2021.
The challenge of cybersecurity
Cybersecurity is also one of the main barriers to the adoption of IoT and threats in this field range from hacking, to taking control of devices or infection with malware.
In the latter case, there are already precedents. In June of this year, a malware known as Silex infected more than 2,000 IoT devices, erasing their firmware and making them unusable. Today there is no adequate preparation to counter this type of attack.
Currently most companies (55%) believe that they could be the target of an attack in the next two years and only 10% trust that they have the necessary tools to detect an attack.
Another common concern is the possible remote modification of IoT devices or their functions. A recent example reported by Google is the modification of second-hand Nest cameras, which allowed their former owners to obtain images recorded by these devices without the consent or knowledge of their current owner.
In some cases, such as the IoT medical, the hacking of the devices can pose a high risk. Cynerio, an Israeli company, has created a solution based on the visibility of hospital telecommunications networks, allowing its managers to see suspicious activity. At the same time, Cynerio’s software automatically detects which devices are vulnerable and which are not.
In summary, and to conclude with the issue of cybersecurity, one could say that the problem stems from the use of outdated communications protocols such as Telnet or FTP.
According to recent statistics, 40.3% of households have more than 5 devices connected and 40.8% of these devices contain at least one vulnerability. These vulnerabilities are not related to the use of outdated communication protocols but also to the use of simple password authentication systems.
Other challenges for IoT implementation
The cost of implementation is another problem that companies have to face. With each IoT device costing between $10 and $50, not counting installation costs, it is estimated that the most ambitious IoT projects would require a budget in excess of $1 million. A project of this cost involves the approval of several layers of management, which sometimes lack the technological expertise to understand the importance of IoT. Thirty-two per cent of manufacturing companies say that the search for information is a major barrier to implementing an IoT system.
Inexperience or lack of information about the benefits of IoT is sometimes combined with skepticism about the ROI they can provide. Given the transformative capacity of the IoT, which in some cases can completely transform a business model, some managers are reluctant to bet on the IoT when returns on investment are unclear. This problem is cited as very important by 34% of managers of manufacturing companies.
Alternatives to ROI have been proposed as a measure of the success of an IoT project, given their special nature. Given that the investment and implementation of the IoT is not usually looking for a single benefit but a transformation that affects the brand, which generates benefits, creates new business models and also reduces costs while monitoring them, we suggest the adoption of a more holistic KPI.
For example, the adoption of Return on IoT Adoption (ROIA) is a very good option, as it is calculated by dividing the incremental value generated by the IoT minus its operational costs by the initial investment. This formula allows companies a great flexibility when calculating possible returns, since in many cases the benefits of the IoT are not entirely clear at the beginning of the project and may occur once the solution is installed.
The most important trends in IoT
Now that the deployment phase of IoT devices is more than settled, it’s time to think about what to do with the data these devices collect. As the volume of data will be huge, it will be necessary to invest in technologies such as Artificial Intelligence and Machine Learning that will allow a better management of these data.
Another strategy that will be adopted to manage the large volume of data are the distributed process strategies: Edge Computing and Fog Computing.
Edge Computing is postulated not only as a way of managing an enormous amount of data, but also, in conjunction with the Blockchain, will increase the security of data transmissions.
There are already companies that combine the use of IoT devices with Edge Computing. One of them is Akamai, which thanks to its Edge Cloud can manage large networks of IoT devices with limited resources. The goal is to use Edge Computing to overcome the limitations inherent in the scalability of IoT applications.
As such, 10 key trends can be identified for the future of IoT:
- The massive deployment of devices, which will generate the challenge of managing them in large quantities.
- Hyper connectivity, demanding better and wider telecommunications coverage.
- Secure communications between machines that will require the establishment of new security protocols.
- Autonomous decision algorithms, thanks to Artificial Intelligence that will make decisions about data based on their environment.
- Emergence of new security networks and protocols.
- Low latency IoT solutions that, thanks to Edge Computing, will allow devices with little computing power to carry out more complicated operations.
- Adaptation of telecommunications operators adapting to the new demands derived from the IoT.
- Asset Tracking, which involves the tracking of machines and devices, monitoring, location and sensing, solutions that will be implemented mainly in the logistics and automotive sector.
- Autonomy of the machines thanks to IA and Machine Learning.
- Design of experiences by public administrations, startups and companies.
Conclusions
Although the transforming potential of IoT for industries of all kinds cannot be doubted, there is still a long way to go in terms of widespread adoption of the technology.
In the management layers, there is still a reluctance to see a technology that promises to change everything without explicitly specifying what the return on investment is. IoT projects have long-term goals and it is often difficult to match that vision with the immediacy required by companies today. On the other hand, cybersecurity is the biggest technological problem facing IoT projects. The use of outdated communications protocols, insecure authentication tools or the migration of hackers from computers to IoT pose a challenge that Blockchain, Cloud Computing and Artificial Intelligence may be able to solve.
