Consumidores Digitais: The Executive's Guide to the Internet of Things (ZD Net)
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The document is an executive guide to the Internet of Things (IoT) and machine-to-machine (M2M) communication, detailing its potential impact on various industries and implications for business. It discusses the significance of M2M technology in streamlining operations, enhancing data-driven decisions, and driving innovation, while also highlighting challenges such as market fragmentation and security concerns. Furthermore, the guide provides insights into the technological components of M2M systems and case studies demonstrating its practical applications.
![11 The Executive’s Guide to the Internet of Things
M2M: Key considerations
While the potential of M2M is pretty clear, the technology—or rather, the ecosystem around it—does come
with its share of challenges.
Intel, for example, points to a lack of awareness of M2M as its primary challenge, mostly due to the terminol-
ogy and lack of understanding about how M2M works.
Gartner’s Foong pointed to the issue of fragmentation, advising CIOs to be cautious of the M2M market’s lack
of providers that can act as end-to-end M2M partners.
“Historically, application development is done either in-house by the enterprise or through an SI [systems
integrator],” he said. “Enterprises then build or source their own M2M platform, then they buy connectivity
through the mobile operators. It is pretty much the same situation today: a fragmented marketplace. There is
no single, one-stop shop.”
This is something that Telstra’s director of M2M, Mike Cihra, readily acknowledges. “The market is fragment-
ed. Absolutely,” he said. “There are ... very few standards, [and] you don’t have any 800-pound gorillas being
a catalyst or using their size to drive the market.
“You literally have hundreds of small developers, you have the [network] operators, you have the hardware
manufacturers, and you have customers in the marketplace who are just beginning to understand what M2M
is. So, our view is that the criticality of partnerships is really important.”
Choosing the right partners and providers is also critical, Gartner’s Foong said, when one considers the time
scale at which M2M projects operate—typically 10 to 15 years. This means asking questions about whether
the provider—particularly on the solutions end of the equation—will still be around several years down the
road. Similarly, CIOs should consider the cost and likelihood of their needing to break decades-long supplier
contracts.
Probing questions should also be asked and, where possible, guarantees can be sought from carriage pro-
viders. “If I deploy an M2M project for my enterprise and I decide that it will run over 2.5G technology, what
guarantee will I have that the mobile operator will still support 2.5 in 10 to 15 years’ time?” Foong said.
“Mobile operators are often very reluctant to give a guarantee that they will operate their 2.5G mobile network
infrastructure for 10 or 15 years. Most mobile operators don’t know themselves how long they will run it. If
2.5G is decommissioned, what will happen to all those M2M devices that were running on that network?”
For global companies, another consideration is whether telcos will be able to ensure global network coverage
and lower roaming costs for the potential to be realised.](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-11-320.jpg)
![13 The Executive’s Guide to the Internet of Things
Forging a global M2M standard
By Jack Clark
By 2016, there will be an extra nine billion devices connected to the Internet, many of which will talk to one
another rather than be used by people, according to projections by Cisco.
These “machine-to-machine” (M2M) devices will be in cars, microwaves, pet collars, mining equipment, MRI
scanners, tractors, and any other place where it could be helpful to get a frequently updated stream of data.
If the last 10 years of technology development were about making it easier for people to exchange informa-
tion with one another—Google, Facebook, Pinterest, Dropbox, and so on—the next 10 years will be about
making it easy for the physical world to transmit data to the Internet.
The question facing telecommunications companies, networking infrastructure vendors, and governments is
how you manage these things effectively and how you let them communicate so you don’t run into problems
like incompatibility or security foul-ups.
OneM2M to rule them all?
This year, seven standards bodies from across the world came together to try to solve this quandary by form-
ing the OneM2M organisation, whose goal is to hammer out the standards that will define how the Internet’s
next few billion devices talk to one another without running into difficulties.
“M2M is already global by nature... what we develop needs to comply with requirements all across the
world,” says Luis Jorge Romero, the steering committee chair of OneM2M. “If we do something regional, the
basic fear is that each region by default develops its own, let us say flavour, and at the end of the day you will
have difficulties in getting the right global standard. [This is] not something that is very efficient.”
For this reason, OneM2M has brought together major standards bodies from Japan, China, Europe, Korea,
and the US to try to create a technical specification for M2M communication.
Companies from across the industry are participating in the scheme, including Alcatel-Lucent, Ericsson, HP,
Juniper Networks, Motorola Mobility, Qualcomm, Samsung, and Texas Instruments.
Each participating company is tied to a local standards body partner that provides information to ensure
they don’t develop technologies that “overlap with the work of OneM2M.” If they have already duplicated
OneM2M work, they will contribute it to the organisation, according to OneM2M documents (PDF).
By working with standards bodies across the world and with major technology companies, OneM2M hopes
to create a standard that satisfies everyone.](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-13-320.jpg)
![14 The Executive’s Guide to the Internet of Things
Service layer architecture
OneM2M’s proposed standards concern the service layer architecture for M2M devices. Protocols and APIs
will then be created that fit with this architecture.
Service layers are the systems used to pass M2M messages through a network, transfer data in and out of
other IT infrastructures, present information to the administrator, and communicate with other M2M clouds,
said Jon Howes, a senior consultant for Beecham Research.
Initially, the OneM2M scheme hopes to develop standards for how individual M2M devices communicate their
information, after which it will look at standardising how the M2M device authenticates itself with the network.
If these projects go well, it will turn its attention to the mechanics of how the data is processed within the
service layers—although there’s some doubt about how far this part of the scheme may get.
Is the standard needed? After talking with analysts, the heads of standards bodies, and technologists, many
seem to think that basic standards for M2M communication are indeed necessary.
Already there are around 180 ways of communicating, authenticating, and securing data transfer between
M2M devices and service layers, according to Marie-Paule Odini, chief technology officer of HP’s communi-
cation media and solution organisation. Needing to support so many different technologies can put a huge
cost burden on M2M technology companies, she said, describing the differentiation as“a showstopper” for
broader uptake of machine-to-machine communication.
“Standards that will simplify that and get alignment on the protocols on a network level and the wide-area
network, and the data models and APIs, would [make M2M] much easier to implement and support—it
would reduce the cost,” she says.
If OneM2M successfully creates a global standard for how these service layers function and exchange data
with one another, it should be possible to, for example, buy a fridge in China that communicates data with
a local service layer, then move countries, taking take the fridge with you, and seamlessly plug into another
service layer operated by another service provider or your own home network.
Although this example may seem trivial, it illustrates the interoperability benefits that standards provide: In the
same way that any 3G phone can make calls across the world, thanks to the universal 3GPP communication
standard, future M2M devices should be able to use the OneM2M standard to exchange data with devices
wherever they are.
However, forging a global standard is a difficult task, and there are already signs of tension.](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-14-320.jpg)
![26 The Executive’s Guide to the Internet of Things
M2M and the Internet of Things: How
secure is it?
By Michael Lee
As interest in the Internet of Things phenomenon grows—the idea that almost everything will be connected
to the Internet and will provide data or control—so too has business’ focus on Machine-To-Machine (M2M)
technologies and communication. Like any emerging technology, however, M2M has a slew of security issues
that businesses will have to deal with.
To highlight the security challenges ahead, ZDNet spoke with the representatives from Oracle, NetIQ, Check
Point Australia, Palo Alto Networks, and Verizon Business.
Although the experts disagree on the exact number of “things” that will be connected to the Internet, one fact
is clear: It’s going to be massive. Cisco is betting that by 2020, 50 billion devices will be connected to the
Internet. Gartner pointed to a figure closer to 30 billion, but that hasn’t stopped the company from listing it
among its top 10 strategic technology trends for 2012. Verizon has also listed it among its five key business-
tech trends for 2013, and, through its recent acquisition of Hughes Telematics, is betting on the Asia-Pacific
region to take the lead.
However, all of these devices need to have some form of connectivity, resulting in significant security issues
that businesses need to consider. In this article, we take a look at:
• The current progress in M2M adoption and whether upcoming standards address security.
• The new attacks and challenges that M2M will bring to businesses.
• The security barriers that could cause M2M adoption rates to flop.
Progress and standards
The underlying principle of M2M communications isn’t particularly new, as similar technology has been used
for decades at power stations, water utilities, building control and management systems, and the like, usu-
ally in the more recognisable form of supervisory control and data acquisition (SCADA) systems. However,
according to engineering manager Aviv Abramovich from Check Point, these systems are typically custom
implementations, often running proprietary operating systems, and without any particular standard to follow.
“We’re in that creative curve, where people are looking to capitalise on the opportunity.”
“They weren’t designed with security in mind when they were designed. The designer did not expect them to
necessarily be connected to the Internet [or] a public access network. They probably more anticipated that they
would be behind a secure network, and they made some assumptions on how it works,” Abramovich said.](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-26-320.jpg)
![29 The Executive’s Guide to the Internet of Things
“Every architecture I’ve ever seen, security must be designed upfront and considered. If companies have
ruled out security upfront, I’d really question the maturity of those organisations [and] whether they are ready
for the M2M story.
“It’s a complete risk perspective. It’ll be the remote location management house handling the office. I can see
convergence of authentication, GPS technology, and M2M. The next evolution.”
Traditional disruptive attacks like denial of service (DoS) could have new consequences, Yip said. Many field-
based devices will be powered from batteries.
“It’s even easier when power is at a premium, because of the fact that something needs to respond to a
request, be it legitimate or not, [and that] takes power.”
Yip said that DoS attacks could be designed to increase processor usage, thus draining a device’s battery
prematurely and ensuring that it stays offline or out of contact. Previously, attackers needed to keep up their
attack, limiting the number of targets that they could simultaneously force offline, or find an exploit that would
cause a specific service to crash. But when the device runs off batteries, attackers don’t need to do anything
particularly technical and get the added bonus of forcing all services on the device offline.
Encrypting information also tends to be a processor-intensive task, meaning that devices may need to be
selective as to what they encrypt, as opposed to the Web’s trend toward full end-to-end encryption.
“You have to minimise power usage, which also means you can’t waste too much of it screwing around with
encryption. That’s actually one of the main challenges. If your processor and [thus] battery is doing all of this
encryption activity all the time, pretty soon your device will have no power to do anything,” he said.
“Unless nanotechnology and battery manufacturing increases as per Moore’s Law, it’s going to be a
huge issue.”
Counsel stressed that the problem existing in the bring-your-own-device (BYOD) and asset-management
spheres—remotely wiping lost or stolen hardware—will also carry over to M2M devices if they are physically
compromised. This may lead certain businesses to adopt a “mission impossible” policy, where once a device
has performed its task, it may need to destroy the data it contains.
“You don’t want to have devices with any kind of identification left lying around, so you need to have effec-
tive disposal or self-disposal processes built in to those protocols. As soon as they’re decommissioned or
powered on without having been turned on for some period of time, they’ll need to actually effectively cater
for their own security remotely.”
This could include an M2M device using its sensors as a method of determining when it has been stolen,
assuming that false data is not being fed back to its owners.](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-29-320.jpg)
![31 The Executive’s Guide to the Internet of Things
With IPv4 addresses nearing exhaustion, networks simply won’t have enough addresses to assign to the
explosion of devices unless they transition to IPv6. Abramovich said that in some circumstances, this limita-
tion could be circumvented by using private IPv4 address spaces, but create more complex problems when
attempting to connect the private network to the rest of the Internet and subsequently route traffic.
Abramovich also said that IPv6’s limited use, compared to IPv4, means that it could have further vulnerabili-
ties that haven’t been discovered, unlike IPv4, which has stood up to hackers for a significantly longer period.
“When IPv6 was first introduced, we have seen cases where there were vulnerabilities and issues that were
already long gone, extinct from IPv4-based networking, reintroduced in IPv6. The IPv4 IP stack in most
modern equipment [and] modern operating systems is fairly strong. With IPv6, there are still a lot of holes
that hackers will discover over time [and] once hackers sink their teeth into it, they’ll probably find a lot more
things that could potentially go wrong,” Abramovich said.
Yip also highlighted that the problem with attempting to secure each end point is that certificate management
will become a serious issue as they are updated or revoked.
“A core part of security working, specifically for confidentiality, to ensure secure communications... that’s all
based on encryption certificates and that sort of thing. The management of certificates is going to become an
issue when it comes to that many devices, because certificates expire and then you’ve got to restore them or
refresh them, and there’s all sorts of trust relationships that you have to re-establish,” Yip said.
“It’s nothing new. Anyone that’s tried to manage certificates in a [public key infrastructure]-type environment
knows what the issues are, but they’re not going away anytime soon if we’re talking about M2M.”
Other barriers to entry will be less technical and more about the applications that M2M technology will be used
in. According to Yip, some industry sectors will be slower to adopt M2M technologies than others. He said
that the first to use such technology would continue to be utilities, while manufacturers for white goods could
follow, but emphasised that any vendor entering the market will need to have a very strong business case.
“If you can actually measure a business case or business saving in putting these kind of things in, then that’s
where management will sign up and say, ‘sure,’ but if it’s just for us, as consumers, to have an easier way to
check out, then it may be hard to fund.”
Another security issue that could bring M2M to a halt is the lack of skilled, experienced implementers when it
comes to rolling out a fleet of M2M devices. King said that because it is such a relatively new area for certain
businesses, those that are currently doing it haven’t learned the important lessons from the failures of SCADA
systems in the utilities space.
“They are not the folks that have earned their scars, if you’ll permit the analogy, in network security in the first
place,” he said.](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-31-320.jpg)
![32 The Executive’s Guide to the Internet of Things
Counsel agreed.
“It really is about having people who have been there, seen the problem, [and have] experienced the scars
on their back. If you bring someone who is inexperienced in this, who hasn’t had the background working
with companies that don’t have the background in this area, I think you’re going to hit those same issues and
repeat problems,” he said. Getting advice from organisations that are looking at related areas can be the key
to success.](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-32-320.jpg)
![37 The Executive’s Guide to the Internet of Things
Five cool things you didn’t know M2M could
do
By Jamie Yap
From helping dairy farms make the most of milk production to bodysuits that light up in sync with music dur-
ing a dance routine, machine-to-machine (M2M) communications technology is quietly but surely sweeping
into several aspects of human society in the years to come.
It is not that M2M technology use cases are too futuristic for the man on the street to grasp or appreciate,
industry watchers shared with ZDNet Asia. Besides the generally low level of awareness currently, the low
visibility of M2M technology at work is a major reason, they added.
M2M applications are typically used behind the scenes, such as in a healthcare setting, said Suvendra Das,
from Philips Healthcare Asia-Pacific. His company created the eICU program, which allows patients, who
would otherwise have to remain warded long-term in hospital intensive care units, to continue to be moni-
tored and recuperate in their own homes.
Patrik Regardh, of Ericsson’s Networked Society Lab and head of strategic marketing, said many M2M
applications are also in their early stages of deployment in several industries, so society has yet to witness a
complete and significant enough transformation of those industries to take notice.
Nonetheless, there is optimism for the future progress and prevalence of M2M in everyday life.
Regardh, for one, noted today’s society will transcend the Information Age into the future “Networked Society
[where] people, places and things are connected to benefit society, the environment and the economy.”
For instance, sensors could be deployed to track and route anything from flights to goods in freight. Sensors
could be installed on bridges or roads to monitor traffic flow and vehicle weight and detect which ones are
over the legal limit.
By 2020, there will be 50 billion connections, clearly a lot more than just the consumer devices people now
have in homes, such as phones, cameras, and game consoles, Regardh explained.
Eric Haissaguerre, regional director, cloud and IT services at Orange Business Services, was equally bullish.
In the coming years, M2M solutions will multiply as more organizations recognize the potential for applications
such as tracking, process automation, fleet management, telemetry, and the like, he said.
“M2M will gradually impact everyday life more as the benefits of M2M extend into areas such as healthcare,
environmental monitoring and leisure,” he noted.
Here are five interesting areas where M2M communications play a role.](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-37-320.jpg)
![39 The Executive’s Guide to the Internet of Things
Environment: H2O meets M2M
Smart water metering is not just about ensuring customers are billed for their exact consumption. It has a
wider impact on water management and waste reduction, said Orange Business Services’ Haissaguerre.
French telco Orange, along with Veolia Water, which operates some 200,000 water meters, launched a
joint venture in the form of a smart metering operator called “m2o city” in 2011 in France. Orange Business
Services is the B2B (business-to-business) arm of Orange, while Veolia Water is part of Veolia Environnement,
a French company providing environment services, such as waste and wastewater management. Tapping
Orange’s network and ICT knowhow, Veolia Water wanted to enhance the collection and management of
data related to water usage from those meters and cross-check and combine them with other information
from environment sensors in the cities, Haissaguerre said.
Not only does this improve customer service, but also better safeguards water resources. With m2o city,
Veolia Water’s individual customers are invoiced for their exact water usage. Customer satisfaction is up
because they do not have to be disturbed by house visits, so there are fewer complaints and billing enquiries.
Customers also receive automatic alerts in the event of abnormal consumption, while companies and real
estate managers can check year-round usage across a number of properties, Haissaguerre explained.
Entertainment/Performance: Dance the light away
iLuminate essentially takes a simple M2M concept and turns it into art: Dancers wear bodysuits and cos-
tumes that light up wirelessly to match music and choreography, said the company’s founder, Miral Kotb,
a former software engineer. Entertainment artistes such as music group The Black Eyed Peas have used
iLuminate’s technology.
“Clothing with lights ‘in time’ has been around for
several years; however, it only had on and off buttons,”
Kotb said. The difference with the iLuminate platform
is that performers wear illuminated costumes that can
be controlled without having to keep pressing buttons.
Furthermore, the software’s accuracy means cues can
fire every five milliseconds, which is 1,000 times faster
than a human hand clicking a button.
Technology aside, the cool factor comes from how beautiful imagery is created by the light illusions. Every
costume has from eight to 32 channels of light. “You can turn on the lights located only on an arm, leg, or
head and [give the illusion] that a person has five arms, and so on,” Kotb said.
M2M is not too futuristic to grasp and is actually more common than most people are aware of. There is so
much that can be done with M2M and art, Kotb noted, and the light suits are just the start.](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-39-320.jpg)
![48 The Executive’s Guide to the Internet of Things
Case study: From the house to the island:
How M2M can cut electricity use
By Jack Clark
When IBM Master Inventor Andy Stanford-Clark decided to hack his house so he could get a clearer picture
of his electricity usage, he had little idea that he was sowing the seeds for a plan to populate an entire English
island with sensors.
Stanford-Clark had the idea for his “Tweeting house” (as it came to be known) in 2004 when he began
installing sensors to closely monitor how much electricity his house was consuming. The project took several
years, but eventually he could control the items around his home remotely and monitor exactly what was
using electricity. He even set up a Twitter account, where his house would automatically publish information
from its sensors.
Others on the Isle of Wight, where Stanford-Clark lives, heard about what he was doing. Over several years,
what began as a skilled scientist’s hobby blossomed into a scheme to promote more efficient energy use in
social housing and, eventually, into a plan to use machine-to-machine (M2M) technologies and a smart grid
to make the island a reference for renewably minded regions across the world.
Ubiquitous M2M technology has been “imminent” for about 30 years—along with fusion power, quantum
computing, and strong artificial intelligence. But like all these technologies, M2M failed to become mainstream
on the optimists’ schedule. This has begun to change over the past decade, however, and M2M was the key
that allowed Clark to unlock the data in the devices in his home.
From the house to the community
The journey of Stanford-Clark’s project from his house to the local community and finally to the entire island
shows the challenges and opportunities posed by this exciting field.
Once Stanford-Clark had wired up his house, he could access near-real- time information about the electricity
use of all his household items. The data led to interesting insights that reduced his power bill and helped spot
problems in household equipment.
“[Now] I have nearly eight years of data from my house to look back over and spot trends and interesting
events,” Stanford-Clark says. “An example was when our fridge became faulty and started using a lot more
electricity than it should. I spotted that on the graphics really quickly and was able to get the fridge repaired
before it added very much to the electricity bill.”
As of 2012, Stanford-Clark’s house is reporting about 20 data channels, most of which refresh every six
seconds. “It’s quite a lot of data,” he says.](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-48-320.jpg)
![51 The Executive’s Guide to the Internet of Things
expand to cover as many as 35,000 homes.
These energy management systems will also unlock the potential of the smart grid by letting homeowners
enter into a deal with their power company where, in exchange for the utility having the ability to remotely turn
off their household items to regulate demand, they get a substantial rebate.
Such agreements will make it easier for utilities to deal with power spikes from renewable energy production,
but may be greeted cautiously by some customers.
“There’s a tremendous tendency to think of a smart grid like this as a big brother, as a Skynet thing,” David
Green says. “My point is very simple: All this, really, is a clever remote control for your house.”
The key technologies for the home automation systems that will talk to the smart meter, and then to the utility
companies, will be based around Clark’s original home design and will use the MQTT protocol.
Homeowners “can either buy an existing system... or can get [Ecoisland’s] system and we would be the
managers,” Green said.
Once they gain access to home energy monitoring, householders tend to reduce their power consumption
by around 25 percent, Green said, so along with creating a more flexible power grid capable of supporting
renewable energy, the scheme should also result in lower power bills for consumers.
Those involved in the Ecoisland project hope that it will be used as a cookie-cutter prototype for other
schemes across the world.
And at the heart of this scheme will sit the M2M home energy management systems based on Andy Stan-
ford-Clark’s original bout of tinkering. Not bad for a weekend project.](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-51-320.jpg)
![52 The Executive’s Guide to the Internet of Things
Case study: How M2M makes sense for DBS
Bank
By Kevin Kwang
SINGAPORE—For DBS Bank, machine-to-machine (M2M) communications has been a mainstay in its IT
systems. A signal from the automated teller machine (ATM) to the bank’s core system seeking permission
to dispense cash to a customer from the person’s account is one basic example of how M2M is core to the
local bank’s daily operations.
These days, though, the bank is moving beyond merely
communicating transactional data and expanding into col-
lecting unstructured data from customers’ mobile devices
and social media accounts. This move will help the bank
better understand and meet its customers’ needs, said David
Gledhill, managing director and head of group technology &
operations at DBS Bank.
DBS Bank case study
During an interview with ZDNet Asia, Gledhill said the number
of mobile devices used to interact with the bank has “explod-
ed.” People used to come to the branch or visit an ATM for
their banking needs, but with the Internet, they now use their
mobile devices and social media accounts to engage with the
bank too, he said.
“The prize now is to understand what’s going on across all
of these touchpoints and [using the collected data] improve
our services, get to know the customer better, and sell our
products in a timely way.”
Building on existing systems
The executive said DBS’ basic core transaction remains mostly the same, but the “bulk of its investment” has
been to create a separate repository for unstructured data collected as well as how to store it and analyze the
information.
Gledhill said the bank was heavily invested in another data warehousing project using Teradata when he
joined the bank in 2008, which was why it did not create something new to expand its M2M capabilities but
chose to build on top of the existing infrastructure.
DBS Bank case study
What: Expanding machine-to-machine
capabilities from transactional data to col-
lecting and mining unstructured data from
customers’ mobile devices and social media
accounts
How: Building a separate data repository for
unstructured data and implementing analyt-
ics software from various vendors, including
Teradata and Progress Software
Cost: “In terms of a percentage of our
investment dollars, it’s starting to become a
significant amount,” Gledhill said.
Results: Reduced costs, optimized its net-
work, and improved customer experience](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-52-320.jpg)
![53 The Executive’s Guide to the Internet of Things
Currently, Teradata is the core engine for its analytics library, but the bank is also actively looking at other
offerings from vendors such as IBM’s Netezza and EMC’s Greenplum appliances to improve its capabilities,
he said. Progress Software provides the real-time, event-driven engine that plugs into DBS’ existing TIBCO
middleware layer, he added.
“We’ve got a lot of the building blocks in place today, and we’re [now] trialing out a number of different
things.”
Asked how much the bank has spent to set these systems in place, Gledhill declined to give specific num-
bers since those are proprietary. “What I will say is in terms of a percentage of our investment dollars, it’s
starting to become a significant amount. It’s real, it’s meaningful, and we believe there’s value to be had.”
Making sense of the data
The tricky part is figuring out what the bank should react to and how, as it runs the risk of overreacting and
scaring the customers with how much it knows about them.
“We’re stepping somewhat cautiously into [analyzing customer behavior]. We don’t want any of the Big
Brother-type things happening when the customer says, ’Wow, how did they know that?’” Gledhill said.
He acknowledged that any customer transaction information is very sensitive, and the bank does restrict
access to such data to only a certain group of people. To work around this, it looks at customer trends and
other indicative sources of information, such as location data.
“If a customer uses an ATM in a shopping center, and we know who they are—their sentiments and prefer-
ence—it’s very easy to send them an offer to a merchant in that place and do so in real time,” he said.
However, the bank does wrestle with questions such as how often should it send such offers to custom-
ers, what kind of offers should it send, and how it should track customer response. “A lot of those are still
unanswered questions and we’ll learn as we go about how much is too much in terms of intrusiveness,”
Gledhill said.
One positive example of how the bank has been using M2M communications to improve its service quality is
by “listening” to what its ATMs are saying, in order to reduce maintenance costs and ensure customers will
always have access to their funds with minimum inconvenience.
Gledhill said it has a schedule of planned downtimes for its ATMs to refill them with cash and provide main-
tenance, but such downtimes are expensive for the bank and inconvenient for the customer if the ATM runs
out of cash.
Now, every transaction from every ATM gets sent to the bank’s Teradata warehouse and it runs advanced
forecasting to predict and analyze when a machine will run out seven days in advance. The bank also has a](https://image.slidesharecdn.com/execguideiot-140721184739-phpapp02/85/Consumidores-Digitais-The-Executive-s-Guide-to-the-Internet-of-Things-ZD-Net-53-320.jpg)
Consumidores Digitais: The Executive's Guide to the Internet of Things (ZD Net)
- 1. The Executive’s Guide to the Internet of Things Copyright ©2013 CBS Interactive Inc. All rights reserved.
- 2. 2 The Executive’s Guide to the Internet of Things The Executive’s Guide to the Internet of Things Copyright ©2013 by CBS Interactive Inc. All rights reserved. TechRepublic and its logo are trademarks of CBS Interactive Inc. All other product names or services identified throughout this book are trademarks or registered trademarks of their respective companies. Reproduction of this publication in any form without prior written permission is forbidden. Cover photo: iStockphoto.com Published by TechRepublic January 2013 Disclaimer The information contained herein has been obtained from sources believe to be reliable. CBS Interactive Inc. disclaims all warranties as to the accuracy, completeness, or adequacy of such information. CBS Interactive Inc. shall have no liability for errors, omissions, or inadequacies in the information contained herein or for the interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice. TechRepublic 1630 Lyndon Farm Court Suite 200 Louisville, KY 40223 Online Customer Support: http://techrepublic.custhelp.com/ Credits Editor In Chief Jason Hiner Head Technology Editor Bill Detwiler Head Blogs Editor Toni Bowers Senior Editors Mark Kaelin Jody Gilbert Selena Frye Mary Weilage Sonja Thompson Graphic Designer Andrew Ballagh
- 3. 3 The Executive’s Guide to the Internet of Things Contents 4 Foreword 5 The tech behind M2M and the Internet of Things 9 The business benefits of M2M 13 Forging a global M2M standard 17 Survey: IT says M2M is about developing new business opportunities 26 M2M and the Internet of Things: How secure is it? 33 Why big data is a cornerstone of the Internet of Things 35 Will the Internet of Things be the end of cloud computing? 37 Five cool things you didn’t know M2M could do 41 A web-connected world of smart devices brings risk and opportunity 48 Case study: From the house to the island: How M2M can cut electricity use 52 Case study: How M2M makes sense for DBS Bank 55 Case study: Rural India can give M2M a critical push
- 4. 4 The Executive’s Guide to the Internet of Things Foreword Dear TechRepublic and ZDNet members, Machine-to-machine -- or M2M -- is often referred to by a number of different names: the Internet of Things (or IoT), the Web of Things, and the Industrial Internet are a few of the most common examples. At its core, M2M is all about tiny sensors that collect data and automatically transmit that data to servers or the cloud, where it can quickly be translated into useful analysis. The end game is to get deeper insights and real-time feedback that can help you make faster and better decisions. This obviously ties into big data and there are certain industries -- such as manufacturing, health care, and public utilities -- where this is going to have a huge impact in the immediate future. TechRepublic and ZDNet have put together a series of articles to help you understand the state of M2M, see how it can be used to generate business benefits, understand the security and privacy hurdles to overcome, and get a look at few examples of M2M in action in the real world. As always, we hope that you find this useful in getting up to speed on M2M and make smart decisions on how it can help your organization. And, we’re open to your feedback on how we can make these guides even more useful in the future. You can email your suggestions to me at jason.hiner@techrepublic.com. Sincerely, Jason
- 5. 5 The Executive’s Guide to the Internet of Things In its initial phase, all the Internet’s IP addresses were assigned to computers of one sort or another. Some of these were servers, and a growing number were clients that mostly consumed (but could sometimes modify) content on those servers. As the Internet—and in due course, the worldwide Web—developed, more kinds of (increasingly mobile) computing devices became connected, and Web servers delivered ever-richer content with which they could interact. Although this first Internet/Web revolution changed the world profoundly, the next disruptive develop- ment, in which the majority of Internet traffic will be generated by “things” rather than by human-operated computers, has the potential to change it even more. This “Internet of Things” (IoT), or more prosaically, “Machine to Machine” (M2M) communication, is well under- way—after all, microprocessors are to be found in all manner of “things”: domestic white goods, cars, credit cards, your passport, your family pet, the CCTV camera in your street, the lift (elevator) in your office, and many more. Add the magic ingredient of Internet connectivity (or the ability to be read by an Internet-connect- ed device), bake with applications and services that make use of the data gathered by this vastly expanded network, and you’ve cooked up another technology revolution. As the authors of the excellent Trillions: Thriving In The Emerging Information Ecology put it: “The data are no longer in the computers. We have come to see that the computers are in the data.” However, as the aforementioned book discusses at length, there’s many a slip between a potential brave new technological world and a reality that could improve the quality of life of a significant proportion of humankind. Whether the Internet of Things comes to pass in a satisfying way will depend critically on how the emerging M2M ecosystem is architected. The anatomy of M2M Any new field comes with its own concepts and jargon, so it’s useful to map these out as clearly as possible. Our taxonomy is outlined below. A point worth stressing is that data transfer patterns in the M2M-driven Internet of Things will differ fundamen- tally from those in the classic “human-to-human” (H2H) Internet. M2M communications will feature orders of magnitude more nodes than H2H, most of which will create low-bandwidth, upload-biased traffic. Many M2M applications will need to deliver and process information in real time, or near-real-time, and many nodes will have to be extremely low-power or self-powered (e.g., solar-powered) devices. The tech behind M2M and the Internet of Things By Charles McLellan
- 6. 6 The Executive’s Guide to the Internet of Things Things The “things” in the IoT, or the “machines” in M2M, are physical entities whose identity and state (or the state of whose surroundings) are capable of being relayed to an Internet-connected IT infrastructure. Almost any- thing to which you can attach a sensor—a cow in a field, a container on a cargo vessel, the air-conditioning unit in your office, a lamppost in the street—can become a node in the Internet of Things. Sensors These are the components of “things” that gather and/or disseminate data—be it on location, altitude, veloc- ity, temperature, illumination, motion, power, humidity, blood sugar, air quality, soil moisture... you name it. These devices are rarely computers, as we generally understand them, although they may contain many or all of the same elements (processor, memory, storage, inputs and outputs, OS, software). The key point is that they are increasingly cheap and plentiful and can communicate, either directly with the Internet or with Internet-connected devices. Comms (local-area) All IoT sensors require some means of relaying data to the outside world. There’s a plethora of short-range, or local area, wireless technologies available, including: RFID, NFC, Wi-Fi, Bluetooth (including Bluetooth Low Energy), XBee, Zigbee, Z-Wave, and Wireless M-Bus. There’s no shortage of wired links either, including Ethernet, HomePlug, HomePNA, HomeGrid/G.hn, and LonWorks. Comms (wide-area) For long range, or wide-area, links, there are existing mobile networks (using GSM, GPRS, 3G, LTE, or WiMAX for example) and satellite connections. New wireless networks, such as the ultra-narrowband SIGFOX and the TV white-space NeulNET, are also emerging to cater specifically to M2M connectivity. Fixed “things” in convenient locations could use wired Ethernet or phone lines for wide-area connections. Some modular sensor platforms, such as Libelium’s WaspMote (Figure A), can be configured with multiple local- and wide- FIGURE A
- 7. 7 The Executive’s Guide to the Internet of Things area connectivity options (ZigBee, Wi-Fi, Bluetooth, GSM/GPRS, RFID/NFC, GPS, Ethernet). Along with the ability to connect many kinds of sensors, this allows devices to be configured for a range of vertical markets. Server (on premises) Some types of M2M installations, such as a smart home or office, will use a local server to collect and analyse data—both in real time and episodically—from assets on the local area network. These on-premise servers or simpler gateways (Figure B) will usually also connect to cloud-based storage and services. Local scanning device “Things” with short-range sensors will often be located in a restricted area but not permanently connected to a local area network (RFID-tagged livestock on a farm or credit-card-toting shoppers in a mall, for example). In this case, local scanning devices will be required to extract data and transmit it onward for processing. Storage and analytics If you think today’s Internet generates a lot of data, the Internet of Things will be another matter entirely. That will require massive, scalable storage and processing capacity, which will almost invariably reside in the cloud—except for specific localised or security-sensitive cases. Service providers will obviously have access here, not only to curate the data and tweak the analytics, but also for line-of-business processes, such as customer relations, billing, technical support, and so on. FIGURE B
- 8. 8 The Executive’s Guide to the Internet of Things User-facing services Subsets of the data and analyses from the IoT will be available to users or subscribers, presented (hopefully) via easily accessible and navigable interfaces on a full spectrum of secure client devices. M2M and the Internet of Things has huge potential, but currently comprises a heterogeneous collection of established and emerging, often competing, technologies and standards (although moves are afoot here). This is because the concept applies to, and has grown from, a wide range of market sectors.
- 9. 9 The Executive’s Guide to the Internet of Things The business benefits of M2M By Tim Lohman Machine to machine (M2M), the automated communication of data between connected devices, has begun to increasingly capture the attention of CIOs across the globe. The technology is moving beyond its decades of use in utilities, transport, and heavy industry into the main- stream, empowering CIOs to deliver real value, cost savings, and innovation to management and their wider organisations. Now that networking equipment—a simple SIM card or RFID chip, in the case of M2M—and wireless car- riage have dramatically decreased in cost, and wireless coverage, speed, and capacity have increased, we can embed connectivity into the “things” we use in our day-to-day lives. That translates to new business information (BI), operational efficiencies, and revenue-generating opportunities. In the transport and logistics sector, this means that pallets and packages are able to communicate their location, allowing for real-time parcel tracking. The same application of M2M also allows the public to gain real-time updates on how far away their train, ferry, or bus is. In the healthcare sector, M2M devices worn by patients enable real-time monitoring of vital statistics or the dispensing of medication. In retail, M2M provides better point-of-sale data, as well as better shopping experi- ences through personalised digital signage. In the utilities sector, too, M2M powers innovation through smart meters in homes that provide near-real-time data to consumers on their usage. M2M devices are deployed throughout power, gas, and water networks, which allow for better visibility on outages, spikes in demand, and supply routing. With this communication, machines can be set to act against existing business rules or parameters or to feed data through to humans, empowering them with greater awareness and insight into business and systems operations. Just ask Michael Klausen, co-CEO at Brasserie Bread and an M2M convert. Until early 2011, the company— which bakes and supplies artisan bread and pastries to more than 500 restaurants daily—was reliant on labour-intensive and “100 percent unreliable” paper-based processes to meet its temperature-based food- safety compliance requirements. Faced with the potential loss of health accreditation and the ability to supply specific shops, hospitals, schools, and airlines, Brasserie Bread turned to M2M. The project combines kit, carriage, management tools, software, and services from cold-chain specialist Cooltrax and Telstra. With it, the company has automated temperature readings and compliance reporting and can now access real-time alerts in the event of a cool- room unit failing—saving the potential loss of the next day’s bake.
- 10. 10 The Executive’s Guide to the Internet of Things “I can now sleep at night,” Klausen said of the benefits of the project. “I can sit at the airport and quickly run a check on where temperatures are at in the two bakeries. From a management point of view, that is a lot of time saved for me.” There’s also the saving of a staff member whose sole role is to manage and monitor food temperatures. M2M: The value It’s not just management that’s beginning to realise the benefits of M2M; it’s CIOs, too. Telsyte senior analyst, Rodney Gedda, said that this is because M2M can, in many instances, be tied back to a hard return on in- vestment (ROI), as well as helping to deliver back to the business stronger BI, driving customer engagement, cost savings, business process efficiencies, innovation, and potential new revenue streams. “If a machine or device can report back that it has broken down or that it needs refilling, then that saves, for example, a field-force employee driving around checking on these things,” he said. “Because of the improved visibility, they only need to go where the attention is needed. That has a hard ROI for operations.” The combination of M2M and big data, as automotive company Ford pointed out, could produce excellent everyday benefits in the not-too-distant future. Collecting data—from a small-scale fleet of repair trucks to a million-strong network of smart meters—then feeding that data through a processing system to deliver detailed business information is another major benefit of M2M. “That could be used by an electricity provider to gain very detailed information on when spikes in electricity demand occur, and what usage patterns are, whether there are more optimal distribution paths, whether there is or has been an outage in a certain area, whether there is maintenance needed,” Gedda said. “That kind of information is delivered through M2M and has a powerful effect on how well your business operates.” King Yew Foong, research vice president, communications service provider (CSP) strategy at Gartner, said that M2M is also being used to drive closer customer relations. Through enabling new cars with M2M, automotive manufacturers and dealers are able to actively inform customers of when tyre wear is occurring or when engines or other components are failing or due to be changed. Similarly, office equipment that’s outfitted with M2M—such as a multi-function printer (MFP)—can keep track of component wear and ink-cartridge use. When the time is right, it can automatically order a new cartridge or request that a technician be dispatched to give it a service. The result is that M2M can help deliver a painless service or create the sensation that the service supplier is actively engaged in the customer relationship. “It is really about a better user experience, and, for the service provider, it is a deeper service and relationship,” Foong said.
- 11. 11 The Executive’s Guide to the Internet of Things M2M: Key considerations While the potential of M2M is pretty clear, the technology—or rather, the ecosystem around it—does come with its share of challenges. Intel, for example, points to a lack of awareness of M2M as its primary challenge, mostly due to the terminol- ogy and lack of understanding about how M2M works. Gartner’s Foong pointed to the issue of fragmentation, advising CIOs to be cautious of the M2M market’s lack of providers that can act as end-to-end M2M partners. “Historically, application development is done either in-house by the enterprise or through an SI [systems integrator],” he said. “Enterprises then build or source their own M2M platform, then they buy connectivity through the mobile operators. It is pretty much the same situation today: a fragmented marketplace. There is no single, one-stop shop.” This is something that Telstra’s director of M2M, Mike Cihra, readily acknowledges. “The market is fragment- ed. Absolutely,” he said. “There are ... very few standards, [and] you don’t have any 800-pound gorillas being a catalyst or using their size to drive the market. “You literally have hundreds of small developers, you have the [network] operators, you have the hardware manufacturers, and you have customers in the marketplace who are just beginning to understand what M2M is. So, our view is that the criticality of partnerships is really important.” Choosing the right partners and providers is also critical, Gartner’s Foong said, when one considers the time scale at which M2M projects operate—typically 10 to 15 years. This means asking questions about whether the provider—particularly on the solutions end of the equation—will still be around several years down the road. Similarly, CIOs should consider the cost and likelihood of their needing to break decades-long supplier contracts. Probing questions should also be asked and, where possible, guarantees can be sought from carriage pro- viders. “If I deploy an M2M project for my enterprise and I decide that it will run over 2.5G technology, what guarantee will I have that the mobile operator will still support 2.5 in 10 to 15 years’ time?” Foong said. “Mobile operators are often very reluctant to give a guarantee that they will operate their 2.5G mobile network infrastructure for 10 or 15 years. Most mobile operators don’t know themselves how long they will run it. If 2.5G is decommissioned, what will happen to all those M2M devices that were running on that network?” For global companies, another consideration is whether telcos will be able to ensure global network coverage and lower roaming costs for the potential to be realised.
- 12. 12 The Executive’s Guide to the Internet of Things Despite this, Telstra’s Cihra said that the telco’s M2M business has been growing about 20 percent per year off the back of declines in the price of the M2M modules and data plans. “That is tipping more business cases into a place where wireless and software with wireless into a device is potentially now a profitable op- portunity for a company,” he said. Add to that on-demand cloud-based software and systems, like those rolled out by Three Wholesale, for storing M2M data and processing it into meaningful business information, and you have the ingredients for explosive growth. Where to start Clearly, M2M has its benefits and downsides, but determining whether the technology is right for your organ- isation, and where best to start with it, takes a conversation, according to Telstra’s Cihra. “It starts with the simple question of ‘do they have assets in the field?’ If the answer is ‘yes,’ I would suggest there is a conversation to be had as to whether they have full visibility and awareness of what those assets are doing.” It’s a sentiment backed up by Brasserie Bread’s Klausen, who said that doing your research on the technol- ogy and what it can do for your business is the best place to start. In his case, he has turned to partners, and also industry journals and leading European industry examples of M2M deployments—such as mixing machines communicating and coordinating workflows with ovens—to better understand the process. Nonetheless, he said that he’s sold on the benefits of M2M. “My advice is to just do it,” he said. “As an owner, you just don’t have the headaches and the staff doesn’t have to follow processes which are just annoying. If things happen automatically, you can grab any problems straightaway.”
- 13. 13 The Executive’s Guide to the Internet of Things Forging a global M2M standard By Jack Clark By 2016, there will be an extra nine billion devices connected to the Internet, many of which will talk to one another rather than be used by people, according to projections by Cisco. These “machine-to-machine” (M2M) devices will be in cars, microwaves, pet collars, mining equipment, MRI scanners, tractors, and any other place where it could be helpful to get a frequently updated stream of data. If the last 10 years of technology development were about making it easier for people to exchange informa- tion with one another—Google, Facebook, Pinterest, Dropbox, and so on—the next 10 years will be about making it easy for the physical world to transmit data to the Internet. The question facing telecommunications companies, networking infrastructure vendors, and governments is how you manage these things effectively and how you let them communicate so you don’t run into problems like incompatibility or security foul-ups. OneM2M to rule them all? This year, seven standards bodies from across the world came together to try to solve this quandary by form- ing the OneM2M organisation, whose goal is to hammer out the standards that will define how the Internet’s next few billion devices talk to one another without running into difficulties. “M2M is already global by nature... what we develop needs to comply with requirements all across the world,” says Luis Jorge Romero, the steering committee chair of OneM2M. “If we do something regional, the basic fear is that each region by default develops its own, let us say flavour, and at the end of the day you will have difficulties in getting the right global standard. [This is] not something that is very efficient.” For this reason, OneM2M has brought together major standards bodies from Japan, China, Europe, Korea, and the US to try to create a technical specification for M2M communication. Companies from across the industry are participating in the scheme, including Alcatel-Lucent, Ericsson, HP, Juniper Networks, Motorola Mobility, Qualcomm, Samsung, and Texas Instruments. Each participating company is tied to a local standards body partner that provides information to ensure they don’t develop technologies that “overlap with the work of OneM2M.” If they have already duplicated OneM2M work, they will contribute it to the organisation, according to OneM2M documents (PDF). By working with standards bodies across the world and with major technology companies, OneM2M hopes to create a standard that satisfies everyone.
- 14. 14 The Executive’s Guide to the Internet of Things Service layer architecture OneM2M’s proposed standards concern the service layer architecture for M2M devices. Protocols and APIs will then be created that fit with this architecture. Service layers are the systems used to pass M2M messages through a network, transfer data in and out of other IT infrastructures, present information to the administrator, and communicate with other M2M clouds, said Jon Howes, a senior consultant for Beecham Research. Initially, the OneM2M scheme hopes to develop standards for how individual M2M devices communicate their information, after which it will look at standardising how the M2M device authenticates itself with the network. If these projects go well, it will turn its attention to the mechanics of how the data is processed within the service layers—although there’s some doubt about how far this part of the scheme may get. Is the standard needed? After talking with analysts, the heads of standards bodies, and technologists, many seem to think that basic standards for M2M communication are indeed necessary. Already there are around 180 ways of communicating, authenticating, and securing data transfer between M2M devices and service layers, according to Marie-Paule Odini, chief technology officer of HP’s communi- cation media and solution organisation. Needing to support so many different technologies can put a huge cost burden on M2M technology companies, she said, describing the differentiation as“a showstopper” for broader uptake of machine-to-machine communication. “Standards that will simplify that and get alignment on the protocols on a network level and the wide-area network, and the data models and APIs, would [make M2M] much easier to implement and support—it would reduce the cost,” she says. If OneM2M successfully creates a global standard for how these service layers function and exchange data with one another, it should be possible to, for example, buy a fridge in China that communicates data with a local service layer, then move countries, taking take the fridge with you, and seamlessly plug into another service layer operated by another service provider or your own home network. Although this example may seem trivial, it illustrates the interoperability benefits that standards provide: In the same way that any 3G phone can make calls across the world, thanks to the universal 3GPP communication standard, future M2M devices should be able to use the OneM2M standard to exchange data with devices wherever they are. However, forging a global standard is a difficult task, and there are already signs of tension.
- 15. 15 The Executive’s Guide to the Internet of Things Global versus de facto standards For one thing, some M2M-focused companies are adopting proprietary technologies that are set to become de facto standards. The nightmare for OneM2M is that what happened with the cloud could also happen to M2M: Most cloud companies are implementing APIs that are roughly equivalent to those pioneered by proprietary cloud operator Amazon via its Amazon Web Services (AWS) division. “There really is no de facto standard in the M2M space,” says Joe Rostock, chief technology officer of ATIS, the North American standards organisation, and OneM2M-participant. “What’s happening is there are propri- etary solutions being developed.” Some of these standards are being built for specific industries, while others are being developed by compa- nies to sell to a variety of business sectors. “There really isn’t one that’s emerging as a leading standard,” Rostock says. Numerous technologies are currently potential de facto M2M communications standards, ranging from Zig- Bee’s low-power mesh network to Z-Wave’s similar technology to Neul’s backing of the ex-analogue TV white space part of the spectrum to plain old 3G, via companies like Wireless Logic. Some companies are beginning to standardise on the service layer itself. In July, Telefonica formed a global M2M alliance with other telecommunications operators that all plan to use Jasper Wireless technology for their M2M networks. Many of the world’s leading M2M service providers—KPN, NTT DoCoMo, Rogers Wire- less, SingTel, Telefonica, Telstra, Vimpelcom, and Telefonica—are involved. OneM2M’s gambit is that Telefonica and the other ISPs will give their local standards bodies enough infor- mation about the technologies they are using for these capabilities to be implemented in the eventual world standard. However, if M2M providers naturally converge around certain technologies, a standard may not be entirely necessary. “Off the top of my head... you don’t need a standard because everybody is really building the solutions from a technical IP perspective,” says Philip Cole, European sales and marketing director for Wireless Logic, a major player in the M2M space that uses SIM cards to get data in and out of devices. “I don’t think a standard is necessary,” he adds. Others believe that OneM2M’s plans don’t go far enough and that more can—and should—be done in terms of creating standards for some of the more sophisticated technologies at play in this area.
- 16. 16 The Executive’s Guide to the Internet of Things Beyond the service layer The feeling is that there are far more serious problems brought about by the rise of proprietary clouds for processing M2M data than there are in the basic communications layer. “What I think is deficient about OneM2M is that it doesn’t form part of a bigger architecture for M2M that includes the applications and the data flows and the formats,” says Jeremy Green, principal analyst within Ovum’s industry communications and broadband division. “It’s a bit telco-centric.” If you look at the list of companies involved in OneM2M, the majority are service providers or telecommunica- tions companies, and there are few participants from specific industries. However, this may be more repre- sentative of the overall shape of the M2M market than any real deficiency. OneM2M believes that local standards bodies will be able to mesh their recommendations with the technolo- gies being developed and sold by local M2M specialists. The gamble is that this can embrace many of the industries likely to use the technology. “The interaction between sectors is something that has to be done,” says Beecham Research’s Howes. “If the standard is there for doing it in a common way throughout the industry, that’s a great thing for the industry.” Over the next few years, OneM2M will develop the specifications and hope that they closely match the tech- nologies being used. According to most of our interviewees, a standard seems to be the best way to help structure this market and avoid problems. “Am I afraid that a specific vendor platform will drive the industry?” asks HP’s Odini. “I don’t think so. What will drive the industry will be standards like... OneM2M.”
- 17. 17 The Executive’s Guide to the Internet of Things Survey: IT says M2M is about developing new business opportunities By Bill Detwiler Machine-to-machine (M2M) technology is a rapidly growing part of the global economy, especially in automo- tive, transportation, logistics, energy, and healthcare. To better understand how businesses are approaching M2M, we invited TechRepublic and ZDNet members to take our M2M: Hype or Transformative Tech survey. More than 220 people responded, sharing their company’s view of the technology, current implementation, and future plans. The results reveal a significant amount of interest in M2M but relatively few actual implementations. Those companies that have implemented M2M or have projects underway are looking for both new business op- portunities and ways to improve their existing processes and products. Many, however, are waiting for the market to mature and a clear business need to appear. Businesses split on M2M importance The proliferation of Internet-connected devices that interact without human intervention is creating new pos- sibilities in data gathering, predictive analytics, and IT automation. Companies such as Ford and GE are bullish on the technology. And in November 2012, GE announced a host of new “Industrial Internet” technologies. Writing about GE’s announcement for ZDNet, Andrew Nusca quoted CEO Jeff Immelt as saying: “The Internet has changed the way we consume information and talk with each other, but now it can do more. By connecting intelligent machines to each other and ultimately to people, and by combining software and big data analytics, we can push the boundaries of physical and material sciences to change the way the world works.” Respondents to our survey, however, were split on the importance of M2M technology. 32 percent of re- spondents say that M2M is integral to their business performance. A further 10 percent report that M2M is important (although not transformational). Therefore, more than 40 percent of respondents see M2M as important.
- 18. 18 The Executive’s Guide to the Internet of Things Even among those who don’t see M2M as critical or important, there is interest in the technology. 23 percent say that M2M has possibilities, but that it isn’t a priority for their organization. And 12 percent of respondents feel that M2M technology offers nothing new. European businesses consider M2M most important 42 percent of respondents in Europe say that M2M technology is critical to their business, compared to 31 percent in the Asia-Pacific (APAC) region and 24 percent in North America.
- 19. 19 The Executive’s Guide to the Internet of Things Minority currently use M2M Given that 32 percent of respondents believe that M2M is integral to their business, it’s not surprising that nearly the same number (29 percent) are already using M2M technology or have an M2M project underway But as with Big Data, we’re clearly in the early stages of M2M adoption. More than half (56 percent) of respondents say their companies have no current plans to implement M2M technology. Michael Cavaretta, Technical Leader, Predictive Analytics and Data Mining at Ford, echoed this sentiment in a 2012 interview with ZDNet. At the ZDNet’s Techlines event “Big Data Debunked – Finding the Data Signals,” Cavaretta said that he is particularly interested in the idea of “The Internet of Things,” but that technologies like M2M and the Semantic Web are still “maybe 10 years out.”
- 20. 20 The Executive’s Guide to the Internet of Things APAC and Europe lead M2M implementation As with the level of importance they place on M2M, US companies lag behind European and APAC orga- nizations in M2M implementations. Nearly one quarter of respondents in Europe (23.2 percent) and APAC countries (24.5 percent) currently use M2M technology, and almost a quarter more (25.6 and 22.6 percent, respectively) have an M2M implementation project underway or plan to start one in the next 12 months.
- 21. 21 The Executive’s Guide to the Internet of Things Energy, IT, and transportation lead M2M implementations Of the respondents who currently use M2M technology or plan to do so in the next 12 months, energy, IT, and transportation top the list of M2M uses. 48 percent say they’re using (or planning to use) an energy-relat- ed M2M technology, such as smart metering or wirelessly connected grid assets. IT and network monitoring applications are second on the list with 46.9 percent. Automotive, transportation, and logistics are third with 43.9 percent. Cellular and WLAN are most-used communication method When it comes to connecting M2M devices, more than three quarters (76.5 percent) of respondents say their M2M system uses some form of cellular communication. Wireless LAN technology is second on the list with 59.2 percent. And wired LAN is third with 44.9 percent.
- 22. 22 The Executive’s Guide to the Internet of Things New business opportunities and service/product im- provement top M2M priority list So what are companies hoping to get from their M2M investments? According to our survey, most are look- ing for new business opportunities and ways to improve their existing processes and products. We asked respondents to rate the importance of several factors in their organization’s decision to implement M2M technology, with a score of 1 being not at all important and 5 being very important.
- 23. 23 The Executive’s Guide to the Internet of Things Topping the list is new business opportunities, with 71.5 percent rating it a 4 or 5 in importance. 69 percent say enhancing existing products/services is a major or top priority. And faster response times rounds out the top three with 67.1 percent. Cost savings comes in a distant fourth, with less than half (48.3 percent) rating it a 4 or 5. Why businesses aren’t using M2M tech yet Of the companies that aren’t using M2M technology, more than one third rated an immature M2M market (34.6 percent) and lack of a clear business need (34.5 percent) as very important in their decision not to use M2M. Data security concerns were a close third with 29.2 percent.
- 24. 24 The Executive’s Guide to the Internet of Things Respondent demographics
- 25. 25 The Executive’s Guide to the Internet of Things Additional M2M resources How M2M and Big Data will combine to produce everyday benefits (ZDNet) GE’s $200 million bet to resurrect IT (TechRepublic) M2M challenges go beyond technicalities (ZDNet) A Tour of Sprint’s M2M Collaboration Center (TechRepublic) Will the Internet of Things be the end of cloud computing? (ZDNet) GE unwraps ’Industrial Internet’: M2M for planes, trains, manufacturing (ZDNet)
- 26. 26 The Executive’s Guide to the Internet of Things M2M and the Internet of Things: How secure is it? By Michael Lee As interest in the Internet of Things phenomenon grows—the idea that almost everything will be connected to the Internet and will provide data or control—so too has business’ focus on Machine-To-Machine (M2M) technologies and communication. Like any emerging technology, however, M2M has a slew of security issues that businesses will have to deal with. To highlight the security challenges ahead, ZDNet spoke with the representatives from Oracle, NetIQ, Check Point Australia, Palo Alto Networks, and Verizon Business. Although the experts disagree on the exact number of “things” that will be connected to the Internet, one fact is clear: It’s going to be massive. Cisco is betting that by 2020, 50 billion devices will be connected to the Internet. Gartner pointed to a figure closer to 30 billion, but that hasn’t stopped the company from listing it among its top 10 strategic technology trends for 2012. Verizon has also listed it among its five key business- tech trends for 2013, and, through its recent acquisition of Hughes Telematics, is betting on the Asia-Pacific region to take the lead. However, all of these devices need to have some form of connectivity, resulting in significant security issues that businesses need to consider. In this article, we take a look at: • The current progress in M2M adoption and whether upcoming standards address security. • The new attacks and challenges that M2M will bring to businesses. • The security barriers that could cause M2M adoption rates to flop. Progress and standards The underlying principle of M2M communications isn’t particularly new, as similar technology has been used for decades at power stations, water utilities, building control and management systems, and the like, usu- ally in the more recognisable form of supervisory control and data acquisition (SCADA) systems. However, according to engineering manager Aviv Abramovich from Check Point, these systems are typically custom implementations, often running proprietary operating systems, and without any particular standard to follow. “We’re in that creative curve, where people are looking to capitalise on the opportunity.” “They weren’t designed with security in mind when they were designed. The designer did not expect them to necessarily be connected to the Internet [or] a public access network. They probably more anticipated that they would be behind a secure network, and they made some assumptions on how it works,” Abramovich said.
- 27. 27 The Executive’s Guide to the Internet of Things Palo Alto Network’s global product marketing lead, Chris King, also chimed in, using medical devices as his example. “You look at CT scanners, you look at MRI scanners, you look at dialysis machines, and all these kinds of medical devices: They’re on an Internet. They talk IP, and they have massively vulnerable operating systems. They’re running embedded versions of Windows.” Curiously, while King sees off-the-shelf operating systems such as Windows as making devices more vulner- able, Abramovich thinks that the opposite is more often true, since there is more support from vendors, and more frequent patches than systems that were written once and long forgotten. “With smart meters, and to an extent ATMs, and to an extent SCADA systems, the rollout of patches and updates tends to be slower than you would normally have compared with your home PC, where you get a normal update every week or so or every month,” Abramovich said. Like the operating system debate, while most experts see a role in the use of M2M-specific standards, their effectiveness is yet to be seen. Ian Yip, who is NetIQ’s product and business manager for its Identity, Security & Governance portfolios, said that he is positive that in recognition of security becoming a hot issue, many in the industry, and especially those in the academic field are working toward standards that could be adopted to govern M2M communications. “There’s working groups, there’s varying protocols, there’s a lightweight version of IPv6 you can use on M2M type of communications, but it’s not full IPv6,” Yip said. “If you look for things and discussions online or in publications in this area, a lot of the information is from univer- sities or research groups. Companies are starting to look at it, but only if they have a business case to do it.” Yip said that these standards now have a greater focus on security, with many aiming to get it right while they can, rather than repeat the mistakes of utilities before them. “Security is part of the discussion, because everyone who does the research around this is educated enough to understand the implications of not building security into M2M protocols, M2M standards, M2M commu- nication upfront. We made mistakes on the Internet, and now we’re having to retrofit security, and with M2M you’re even more exposed. So, thankfully, they’re trying to deal with it upfront,” Yip said. While King applauded the initiative of addressing security from the get-go, he also expressed his doubts at how effective such standards might be, saying that what works in theory isn’t always practical to implement. “You have one of two things that come out of standards bodies—and I’m not belittling standards efforts at all here—but typically, they are too strong and thus hard to adopt, or too weak and thus incomplete. That said, it always comes down to implementation. In my experience, there’s never been a standard that’s obviated all security concerns.
- 28. 28 The Executive’s Guide to the Internet of Things Likewise, Oracle vice-president of Strategic Programs, Industries & Exalogic Michael Counsel said that it is too early to pick a “winner” in terms of a standard that addresses security. “We need to see the whole picture before we can really think about whether or not we’ve satisfied the risk requirements of our consumer or the organisation of the customers that are using it. It’s going to be some time before there’s enough of the tooling, enough standardisation, that you cover all bases,” Counsel said. To him, the whole picture includes those inventors and forward-thinking engineers who are coming up with new uses for the technology to judge what is really needed for security in these standards. “We’re in that creative curve, where people are looking to capitalise on the opportunity, and those customers and those great inventors will be looking at ways to utilise it. They’ll be looking at solving their problem, and any de facto would-be standards would actually still be lagging behind the creative process that’s going on in their labs right now.” It’s entirely possible that despite the work by research groups, standards and possibly security could be circumvented entirely if a powerful enough company stepped up, according to Yip. “A certain large one comes to mind in the shape of a fruit. They could potentially do it—they’ve got enough money to do it—if they want, but there is a risk of getting into it too fast, especially when things like the stan- dards aren’t quite set yet, and the security mechanisms haven’t been quite worked out yet,” he said. “It’s either going to take a standard for the industry to agree on, or a very powerful vendor to make things work, so that everyone kind of says, ‘Well, that works, so I’m just going to use that for the pure ease of use.’ It might be completely proprietary, but all we really care about is that stuff works and stuff’s secure, in that order, unfortunately.” New attacks and challenges With the introduction of new devices and technology, the type of attacks that businesses will experience are also going to change. One of the new challenges that businesses will have to face is the need to increase their focus on physical attacks on devices, such as those in remote locations. “If companies have ruled out security upfront, I’d really question the maturity of those organisations.” Counsel said that businesses would have to look at physical security to prevent unauthorised access to de- vices left out in the field, but that access considerations still need to be considered in the event that physical measures also fail. “You don’t want to have that machine compromised, and have a whole bunch of spurious messages coming in,” he said, highlighting that these considerations need to be thought of in advance, rather than after security is compromised.
- 29. 29 The Executive’s Guide to the Internet of Things “Every architecture I’ve ever seen, security must be designed upfront and considered. If companies have ruled out security upfront, I’d really question the maturity of those organisations [and] whether they are ready for the M2M story. “It’s a complete risk perspective. It’ll be the remote location management house handling the office. I can see convergence of authentication, GPS technology, and M2M. The next evolution.” Traditional disruptive attacks like denial of service (DoS) could have new consequences, Yip said. Many field- based devices will be powered from batteries. “It’s even easier when power is at a premium, because of the fact that something needs to respond to a request, be it legitimate or not, [and that] takes power.” Yip said that DoS attacks could be designed to increase processor usage, thus draining a device’s battery prematurely and ensuring that it stays offline or out of contact. Previously, attackers needed to keep up their attack, limiting the number of targets that they could simultaneously force offline, or find an exploit that would cause a specific service to crash. But when the device runs off batteries, attackers don’t need to do anything particularly technical and get the added bonus of forcing all services on the device offline. Encrypting information also tends to be a processor-intensive task, meaning that devices may need to be selective as to what they encrypt, as opposed to the Web’s trend toward full end-to-end encryption. “You have to minimise power usage, which also means you can’t waste too much of it screwing around with encryption. That’s actually one of the main challenges. If your processor and [thus] battery is doing all of this encryption activity all the time, pretty soon your device will have no power to do anything,” he said. “Unless nanotechnology and battery manufacturing increases as per Moore’s Law, it’s going to be a huge issue.” Counsel stressed that the problem existing in the bring-your-own-device (BYOD) and asset-management spheres—remotely wiping lost or stolen hardware—will also carry over to M2M devices if they are physically compromised. This may lead certain businesses to adopt a “mission impossible” policy, where once a device has performed its task, it may need to destroy the data it contains. “You don’t want to have devices with any kind of identification left lying around, so you need to have effec- tive disposal or self-disposal processes built in to those protocols. As soon as they’re decommissioned or powered on without having been turned on for some period of time, they’ll need to actually effectively cater for their own security remotely.” This could include an M2M device using its sensors as a method of determining when it has been stolen, assuming that false data is not being fed back to its owners.
- 30. 30 The Executive’s Guide to the Internet of Things “It might be the device starts off by saying, ‘I know I’m being configured to be in location so much northern, eastern, and height.’ It gets locked in and configured, and when it first starts up or it changes location, it sends an alert by the same mechanism so if it physically changes location, unless it has been configured to, it actually broadcasts the GPS location, plus the M2M diagnosis process,” Counsel said. Security barriers to M2M adoption With the 30 billion to 50 billion devices predicted for 2020, a large part of the problem will be the manage- ment of each individual end point, and the complexity that comes with that. Verizon Business’ vice-president for Strategy and Development in the Asia-Pacific region, Robert Le Busque, pointed to policy as still being critically important, regardless of what is being connected to the network. “If it has an IP address, regardless of whether it’s fixed or mobile or a device, it needs a security protocol, and that security policy should be in line with the full-blown policy that the enterprise has,” Le Busque said. He also pointed to reducing the complexity of managing a huge number of devices as being an issue that the industry would need to solve. “As an enterprise, or as an organisation that looks to use M2M, how do you scale appropriately to be able to manage that away? Under that management is not just security; it’s how do you manage the lifecycle, and then how do you manage your diagnostics. “There needs to be new business models, new ways of managing that completely. Ultimately, it’s about trying to make protocols and technology simpler and repeatable.” King took a different view, however, and conceded the fight to secure every device. He said that while the approach of securing the end point may have worked in the desktop era, it is near impossible to do so for the millions of devices that might need to be managed. “In the old days, you could do device-based security, because all those devices were the same. Now you’ve got iOS, Android, Microsoft on the mobile device. You’ve got Apple, Linux, Microsoft on the desktop or lap- top device. This device proliferation just highlights the fact that attempting to do any of this stuff on the device if you are a corporate entity is extremely difficult.” King said that the one thing these devices have in common is the network they are on, and, as such, the network would be a bottleneck for preventing widespread use of M2M, unless it were used as the place to implement security. “The place to exercise security in the Internet of Things is on the Internet, not the things. That may be the only thing you’ve got control over.” However, networks continue to be characterised as security weak points, with Abramovich pointing out that the slow transition from IPv4 networks to IPv6 could harm M2M uptake.
- 31. 31 The Executive’s Guide to the Internet of Things With IPv4 addresses nearing exhaustion, networks simply won’t have enough addresses to assign to the explosion of devices unless they transition to IPv6. Abramovich said that in some circumstances, this limita- tion could be circumvented by using private IPv4 address spaces, but create more complex problems when attempting to connect the private network to the rest of the Internet and subsequently route traffic. Abramovich also said that IPv6’s limited use, compared to IPv4, means that it could have further vulnerabili- ties that haven’t been discovered, unlike IPv4, which has stood up to hackers for a significantly longer period. “When IPv6 was first introduced, we have seen cases where there were vulnerabilities and issues that were already long gone, extinct from IPv4-based networking, reintroduced in IPv6. The IPv4 IP stack in most modern equipment [and] modern operating systems is fairly strong. With IPv6, there are still a lot of holes that hackers will discover over time [and] once hackers sink their teeth into it, they’ll probably find a lot more things that could potentially go wrong,” Abramovich said. Yip also highlighted that the problem with attempting to secure each end point is that certificate management will become a serious issue as they are updated or revoked. “A core part of security working, specifically for confidentiality, to ensure secure communications... that’s all based on encryption certificates and that sort of thing. The management of certificates is going to become an issue when it comes to that many devices, because certificates expire and then you’ve got to restore them or refresh them, and there’s all sorts of trust relationships that you have to re-establish,” Yip said. “It’s nothing new. Anyone that’s tried to manage certificates in a [public key infrastructure]-type environment knows what the issues are, but they’re not going away anytime soon if we’re talking about M2M.” Other barriers to entry will be less technical and more about the applications that M2M technology will be used in. According to Yip, some industry sectors will be slower to adopt M2M technologies than others. He said that the first to use such technology would continue to be utilities, while manufacturers for white goods could follow, but emphasised that any vendor entering the market will need to have a very strong business case. “If you can actually measure a business case or business saving in putting these kind of things in, then that’s where management will sign up and say, ‘sure,’ but if it’s just for us, as consumers, to have an easier way to check out, then it may be hard to fund.” Another security issue that could bring M2M to a halt is the lack of skilled, experienced implementers when it comes to rolling out a fleet of M2M devices. King said that because it is such a relatively new area for certain businesses, those that are currently doing it haven’t learned the important lessons from the failures of SCADA systems in the utilities space. “They are not the folks that have earned their scars, if you’ll permit the analogy, in network security in the first place,” he said.
- 32. 32 The Executive’s Guide to the Internet of Things Counsel agreed. “It really is about having people who have been there, seen the problem, [and have] experienced the scars on their back. If you bring someone who is inexperienced in this, who hasn’t had the background working with companies that don’t have the background in this area, I think you’re going to hit those same issues and repeat problems,” he said. Getting advice from organisations that are looking at related areas can be the key to success.
- 33. 33 The Executive’s Guide to the Internet of Things Why big data is a cornerstone of the Internet of Things By Patrick Gray It has been interesting to observe technical innovation over the past several decades. In some cases, revolu- tionary new technologies came from seemingly nowhere to completely change technology as we know it. No one was clamoring for a Walkman, yet the device created an entirely new category of consumer electronics whose influence can be felt even in today’s iPod. On the other side of the coin are innovations that have long been predicted, but the technologies to allow the innovation to enter the market either don’t exist, are too expensive, or are missing a few critical elements. I would put the Internet of things in this category. After all, it’s long been predicted that our devices,-from basic appliances to our vehicles and telephones,-would one day “talk” and share information with each other. While elements of the Internet of devices equation have come into play over the last decade, the cornerstone of the concept is Big Data—another technology that’s finally reaching a semblance of maturity. Early attempts at creating what’s now called the Internet of things looked at the problem as a largely technical one. You’d need ubiquitous data networks, protocols for communication, cheap microcontrollers, and de- velopment tools and technology to get the devices talking. While this might get your “things” on the Internet, there’s little practical benefit to this arrangement without an ability to track, manage, and glean useful informa- tion from the massive amount of data that a world of interconnected devices will generate. Preparing for the invasion of the things While there’s near universal agreement that an Internet of Things will be wonderful, there seems to be less clarity around what data should be propagated and harvested from these devices and how a company should manage it all. If you’re a consumer appliance company, putting an interconnected coffeemaker on every countertop might sound wonderful, until you ponder what data are relevant, what services to push, and what business decisions can be gleaned from the minutiae of the morning “cup of Joe” on a massive scale. At this point in the evolution of the Internet of Things, it has become relatively easy to embed a connected microprocessor in a device. The difficulty comes with providing more than rudimentary services with that con- nection. Other than stern warnings about outdated firmware, most of my connected appliances have done little to leverage their connectivity. Rather than looking at the Internet of Things as a connectivity problem, consider it as more of a data problem. Each connected “thing” is a point of data capture and data presen- tation. How you provide, gather, and manage the data generated by this network is how you’ll generate a business benefit from an Internet of Things.
- 34. 34 The Executive’s Guide to the Internet of Things It’s all in the data While our product designers are focused on the rudiments of device connectivity, it’s incumbent upon IT to do two things to capture the most benefit from the Internet of Things. First, IT is well positioned to shift product planning discussions from the “gee whiz” of an interconnected device to the data and services that should be delivered on it. Just as no one cares about mobile networks anymore beyond coverage and speed, connected devices will soon become commodities that win based on the services they offer, not their mere connectedness. Second, IT must realize the massive infrastructure required to support an Internet of Things, particularly around Big Data. It’s relatively obvious that you’ll need everything from bandwidth to a device management infrastructure. What’s less obvious is that you’ll need analytical capabilities to generate some value from your network of connected devices beyond merely distributing firmware and pushing ads.
- 35. 35 The Executive’s Guide to the Internet of Things Will the Internet of Things be the end of cloud computing? By Nick Hardiman The modern Internet is millions of networks containing billions of hosts. The hosts are computers—small per- sonal computers, big enterprise-size computers, and embedded computers. Digital cameras, MP3 players, and car electronics contain computers, but they are not usually hosts on the Internet. With the rise of IPv6, that will change. New devices will be hosts on the Internet. The Internet of Things is coming. I recently spoke to Ron Vetter of the IEEE Computer Society. Here’s how he puts it: “The ‘Internet of Things’ has to do with the large number of devices (things) that are currently or will be shortly connected to the Inter- net. The proliferation of smart sensors will greatly increase the number of things connected as well as the kind of information and control that will be available. For example, think about what happens when we connect most of our home appliances, HVAC controls, entertainment devices, etc., to the Internet. The quantity of information will explode, as will concerns for privacy and security.” Vetter is referring to sensors of all shapes and sizes, from anemometers to watt meters (no, there are no sen- sors starting with Z), which will continuously produce oceans of data. Home automation will finally leave the land of geeks and enter the mainstream, when all of these “things” go online. “Advances and standardization in computer networking and low cost hardware have contributed to moving machine-to-machine communication forward,” Vetter said. The Internet of Things will talk to us, but the things will spend more time talking to each other. These M2M (machine-to-machine) communications will happen wirelessly. Many people rely on M2M communications by using a Bluetooth headset, making a payment with their mobile phone or—for the early adopters with money to burn—subscribing to a 4G network. The technology required to power the Internet of Things is already here, but some of it needs improvement. Networking devices are already here. No office is complete without a network containing printers, Wi-Fi rout- ers, and mobile phones. The IPv6 networking protocol is already here, with its trillions of addresses ready for use, although it is only sparsely deployed so far. Low-cost production, antenna design, and battery life could do with improvement. Privacy controls, green technology, and Things management will need a lot of work. Centralization and distribution The Internet of Things will lead to decentralization. It could lead to the end of cloud computing. As innovation brings sweeping reform, the computer world swings from one model to another. Anyone who has worked in an enterprise for a few years has seen a couple of reorganizations. They know how work is
- 36. 36 The Executive’s Guide to the Internet of Things merged and centralized one year, then split and distributed a couple years later, and then it’s back to merging and centralizing. Way back in the 1950s, the installed computer base was thousands of room-size machines, scattered around the world’s public institutions and public enterprises. The work of each organization was centralized because it had to be. No one had invented distributed computing yet. The 1980s brought personal computers to the general public. A new software market appeared, distributing computing power to individuals. Mainframes and dumb terminals were replaced with clever desktop ma- chines. The current trend is centralization—replacing the local computer room with remote cloud services. The clever desktop machine is being replaced with the mobile device—the modern equivalent of the dumb terminal. The future is another wave of distribution. When everything in the Internet of Things talks to everything else, where will the center be? Utopia or dystopia As we build the Internet of Things in the coming years, new types of work and even new industries will spring up that don’t currently exist. Who will make all the Things? What will stop hackers from switching the lights on and off in a million homes? When the Internet of Things is producing its ocean of data, where can we store it? And how do we use it? There will be moral questions to answer in addition to the technical build. Will our lives get better, when the Internet of Things brings us unprecedented insights into the workings of the world? Or will it strip away the remains of our privacy, reporting everything we do to others? Getting it right will require a more holistic ap- proach from the IT industry. The momentum of the Internet of Things is now building. The Internet changed our lives, and the Internet of Things will change us again.
- 37. 37 The Executive’s Guide to the Internet of Things Five cool things you didn’t know M2M could do By Jamie Yap From helping dairy farms make the most of milk production to bodysuits that light up in sync with music dur- ing a dance routine, machine-to-machine (M2M) communications technology is quietly but surely sweeping into several aspects of human society in the years to come. It is not that M2M technology use cases are too futuristic for the man on the street to grasp or appreciate, industry watchers shared with ZDNet Asia. Besides the generally low level of awareness currently, the low visibility of M2M technology at work is a major reason, they added. M2M applications are typically used behind the scenes, such as in a healthcare setting, said Suvendra Das, from Philips Healthcare Asia-Pacific. His company created the eICU program, which allows patients, who would otherwise have to remain warded long-term in hospital intensive care units, to continue to be moni- tored and recuperate in their own homes. Patrik Regardh, of Ericsson’s Networked Society Lab and head of strategic marketing, said many M2M applications are also in their early stages of deployment in several industries, so society has yet to witness a complete and significant enough transformation of those industries to take notice. Nonetheless, there is optimism for the future progress and prevalence of M2M in everyday life. Regardh, for one, noted today’s society will transcend the Information Age into the future “Networked Society [where] people, places and things are connected to benefit society, the environment and the economy.” For instance, sensors could be deployed to track and route anything from flights to goods in freight. Sensors could be installed on bridges or roads to monitor traffic flow and vehicle weight and detect which ones are over the legal limit. By 2020, there will be 50 billion connections, clearly a lot more than just the consumer devices people now have in homes, such as phones, cameras, and game consoles, Regardh explained. Eric Haissaguerre, regional director, cloud and IT services at Orange Business Services, was equally bullish. In the coming years, M2M solutions will multiply as more organizations recognize the potential for applications such as tracking, process automation, fleet management, telemetry, and the like, he said. “M2M will gradually impact everyday life more as the benefits of M2M extend into areas such as healthcare, environmental monitoring and leisure,” he noted. Here are five interesting areas where M2M communications play a role.
- 38. 38 The Executive’s Guide to the Internet of Things Food production: Milking benefits with M2M The food production sector is one that “happily embraces” every technological advancement that helps pro- duction and lowers cost, and M2M technology is a tool of proven effectiveness in this aspect, said Regardh. For example, milk production is an age-old industry, but it uses some of the latest M2M technologies. M2M is not merely about efficiency in terms of production but enhancing profitability. Regardh said it is a completely automated process, where as the cows are milked by robots and the underly- ing software program reads the data, which is then sent to farmers via text messages on their handsets. This includes information such as which cows have been milked, how much each cow is producing, and how much they are moving. “A lot of movement could mean that this particular cow is in season, which is some- thing a farmer cannot afford to miss,” he explained. Home appliances: From a fridge to a food manager This market is still in an early stage, but smart home appliances equipped with innovative M2M connectivity will open up a new era in convenient and efficient home management and quality of life, said Scott Jung, managing director of LG Electronics Singapore. M2M technology will make its way into more home appliances in years to come because of the rapid prolif- eration of smartphones and smart TVs into everyday life, he said. At the Consumer Electronics Show (CES) event last January, LG showcased a“Smart Refrigerator” proto- type demonstrating various M2M-based “smart home technologies.” One of them was a food management system, which allows consumers to check food items stored inside the fridge for information such as location and expiry dates via their smartphones or its built-in LCD panel. The appliance even recommends dishes that can be cooked using the ingredients it happens to be storing. When it comes to grocery shopping, pressing the Go Shopping button on the fridge’s LCD screen lets consumers select and purchase foodstuffs. This Smart Shopping feature is currently only available in Korea. Various features are not available in LG products in Singapore yet. Jung says that commercializing the smart features in LG’s fridge models is depen- dent on the conditions of each individual market, such as the presence of Web infrastructure and cost efficiency.
- 39. 39 The Executive’s Guide to the Internet of Things Environment: H2O meets M2M Smart water metering is not just about ensuring customers are billed for their exact consumption. It has a wider impact on water management and waste reduction, said Orange Business Services’ Haissaguerre. French telco Orange, along with Veolia Water, which operates some 200,000 water meters, launched a joint venture in the form of a smart metering operator called “m2o city” in 2011 in France. Orange Business Services is the B2B (business-to-business) arm of Orange, while Veolia Water is part of Veolia Environnement, a French company providing environment services, such as waste and wastewater management. Tapping Orange’s network and ICT knowhow, Veolia Water wanted to enhance the collection and management of data related to water usage from those meters and cross-check and combine them with other information from environment sensors in the cities, Haissaguerre said. Not only does this improve customer service, but also better safeguards water resources. With m2o city, Veolia Water’s individual customers are invoiced for their exact water usage. Customer satisfaction is up because they do not have to be disturbed by house visits, so there are fewer complaints and billing enquiries. Customers also receive automatic alerts in the event of abnormal consumption, while companies and real estate managers can check year-round usage across a number of properties, Haissaguerre explained. Entertainment/Performance: Dance the light away iLuminate essentially takes a simple M2M concept and turns it into art: Dancers wear bodysuits and cos- tumes that light up wirelessly to match music and choreography, said the company’s founder, Miral Kotb, a former software engineer. Entertainment artistes such as music group The Black Eyed Peas have used iLuminate’s technology. “Clothing with lights ‘in time’ has been around for several years; however, it only had on and off buttons,” Kotb said. The difference with the iLuminate platform is that performers wear illuminated costumes that can be controlled without having to keep pressing buttons. Furthermore, the software’s accuracy means cues can fire every five milliseconds, which is 1,000 times faster than a human hand clicking a button. Technology aside, the cool factor comes from how beautiful imagery is created by the light illusions. Every costume has from eight to 32 channels of light. “You can turn on the lights located only on an arm, leg, or head and [give the illusion] that a person has five arms, and so on,” Kotb said. M2M is not too futuristic to grasp and is actually more common than most people are aware of. There is so much that can be done with M2M and art, Kotb noted, and the light suits are just the start.
- 40. 40 The Executive’s Guide to the Internet of Things Healthcare: ICU (intensive care unit) at home Philips Healthcare, which already provides patient monitoring systems, developed the Philips eICU solution, which “sets the stage for systematic changes in ICU care,” said Suvendra Das, general manager for Singa- pore and Malaysia at Philips Healthcare Asia Pacific. The eICU solution replicates but does not substitute the actual ICU of hospitals. It essentially allows ICU patients to recuperate and be monitored, but in the comfort and familiarity of their own home. Philips created the software system that is installed in M2M sensors on the various medical apparatuses, such as a heart rate or vital signs monitor, which are located at the patient’s bedside. The system acts like an air traffic control center, whereby specialty physicians and critical care nurses at the hospital are networked to multiple ICU patients, who are all staying in their respective homes, via voice, two-way video, and data. Through the system, these healthcare workers can execute predefined plans or intervene in emergen- cies. Communication becomes more effective be- tween the hospital team and the bedside team, and the time between problem identification and intervention is lowered, Das explained. eICU is currently in use mainly in some hospitals in the United States, but Philips is in talks with healthcare institutions in Singapore to implement the solution. “It is a win-win situation for patients, hospitals, and governments, as they are able to process more cases through the system without having to put in more beds and staff them. This in turn relates to a better cost structure, as a shorter length of stay means hospitals will cost less,” Das said.
- 41. 41 The Executive’s Guide to the Internet of Things A web-connected world of smart devices brings risk and opportunity By Ryan Boudreaux As more “things” on planet Earth are converted to the inventory of digitally connected Internet devices, the roles and responsibilities of Web developers and technology managers will need to evolve to keep pace with the ever-expanding list of appliances and gadgets that require a Web interface. This global trend is known as “The Internet of Things” or IoT. As a vision, it has inspired that same premise for “The Web of Things,” or WoT, and incorporates similar characteristics and application models. This piece will examine the technical features that encapsulate The Web of Things. I will provide examples of current applications in use today, as well as offer some hopeful prospects for the future of the Web and “things.” What is this Web of Things? The WoT is a part of the IoT, and several ideas or visions endure as to what each signifies with respect to the forethought and consideration of how they are implemented and their consequences. The impact to human and artificial intelligence is another concern, not from just a philosophical standpoint, but from intellectual, technological, and governance perspectives.
- 42. 42 The Executive’s Guide to the Internet of Things As I’ve researched the subject of both, it is clear that there is an accelerated pace to convert “things” to “smart” Web-connected devices that create, store, and share data. In addition, these smart devices can be programmed to make decisions based on the data they have created and data from other sources. In essence, we have an amalgam of technologies, equipment, machineries, systems, methods, structures, and devices that, when added to the Web, need to be developed, implemented, monitored, maintained, up- graded, and governed. Frank daCosta, in his Net of Things Blogspot, compares and contrasts the traditional approaches to progress of the IoT/WoT with natural interactive systems, including the ways ants, bees, and superorganisims coexist. Frank’s blog subheading sums up his approach to the current trend: For many pundits (and product managers), the Internet of Things is simply another place to apply the same old traditional networking ideas, such as IPv6. But in actuality, a completely different approach is needed if the IoT is truly to reach its potential. That approach will be informed by lessons learned from nature and other massive interacting systems. Technical managers will need to learn how to integrate their current business models and Web governance systems to accept the rapid pace, as traditional devices continue to be adopted into the “smart” category of Web-enabled happiness. There is no one-size-fits-all solution, but there are efforts to outline a uniform strategy that supports the process from a technological outlook. A uniform technology The unifying premise behind adoption of the WoT is that all “things” will be connected with similar technol- ogy, with a uniform interface to access the global functionality among all smart devices and objects. Several projects are underway to achieve the goal of using HTTP as an application protocol rather than as a transport protocol similar to Web Services or Web API. The technical aspects also rely on the synchronous functionality of smart devices through what is known as a Representational State Transfer (REST), which is a style of soft- ware architecture for distributed systems, including the World Wide Web. It is the predominant Web services design model. The WoT model also relies on current Web syndication functionality such as Atom, which is the standard for syndication formats, or Comet, which is the standard for Web server push technology. Real-world implementation examples Several implementations are in place today that leverage the WoT type of technology, including remote DVR scheduling, remote home security systems monitoring and administration, and remote home electricity grid usage monitoring. These are just a few of the current implementations that bring us one step closer to the WoT, and it will be interesting to see how each evolves in the coming years as more devices are enhanced and functionality is improved. DIRECTV’s Web interface that allows users to remotely set their DVR to record future programs using the
- 43. 43 The Executive’s Guide to the Internet of Things DVR Scheduler via any PC or mobile phone is one example (Figure A). To connect to the DVR remotely, you must own a DIRECTV Plus DVR receiver (R15, R16, R22), DIRECTV Plus HD DVR Receiver (HR20 and above), or TiVo Series 2 receivers with 6.4a software. To send a record request from directv.com requires a personal computer, Internet browser, an Internet connection, and a directv. com username and password. To send a record request from a cell phone requires a mobile phone, an Internet browser, a mobile phone data plan without restrictions on addresses you can visit, and a directv. com username and password. CPI Security allows remote device control over your home or business monitoring system using its InTouch system, where you can remotely arm or disarm your home, control energy sources, receive email or text notifications, and view current status or recent activity from the monitoring system (Figure B). Using the Web interface or the mobile apps to access your account with login and password credentials, you can modify settings and administer the monitoring system remotely from any location. PlotWatt (Figure C) is a free service that connects to smart utility meters at homes and businesses and records electricity usage displaying the current day, past seven days, or previous 30 days usage, FIGURE A FIGURE B
- 44. 44 The Executive’s Guide to the Internet of Things in addition to real-time kW hours. With a login and password credential, you can connect your smart meter to its system and monitor electrical usage from any PC or mobile phone with Internet access and a Web browser. PlotWatt also sorts out where the electricity is being utilized, including device-level appliance status for objects such as heating and A/C, dryer, refrigerator, always-on devices, EV charging, and others. While the FIGURE C
- 45. 45 The Executive’s Guide to the Internet of Things service can’t connect to utility-installed smart meters, they are working on being able to connect to propri- etary data systems. PlotWatt works with TEDs, WattVisions, and many more smart meters coming soon. While the ability to manage appliances is not part of the current PlotWatt business model and service, it is certainly a possibility in the foreseeable future as advances are made with programmable smart appliances and devices, and remote access abilities are enabled. Of course, this gets into the governance issues with respect to who controls certain devices. Do any of you see parallels to Orwell’s 1984? Will the WoT be the end of solitude and the next step toward a totalitarian society? What governance issues need to be sorted out with respect to the Web of Things? Technical managers will have new talking points on their agendas as technology continues to advance and devices continue to be added to the WoT list. Oh, the places you might go! The future of WoT Will Web-enabled robots have your spritzer and fruit-and-cheese tray ready at your beck and call from a “White Glove” or “At Your Service” API app triggered from your smartphone? Where the app allows you to schedule the perfect time for the smart object to pour the glass and pull the food out, allowing them to arrive at the correct serving temperatures based on your expected arrive time established by the link to the GPS? This is not to be confused with applications and companies by the same names, but by the restaurant style of service that could be catered in your own home by your very own Food and Beverage Butler—let’s call it the “FAButler.” Think of the possibilities with your own automatic aide-de-camp or electronic personal con- cierge, programmed to learn your favorite beverages and respond to your previous meal habits, and knowing your preferred brand of cocktail sauce. Of course, the FAButler is also programmed to connect to the refrigerator, wine cellar, and pantry to know what is in stock, and to update the purchase list as the inventory is utilized. And all this functionality is controlled and governed by the FAButler System, which is a cloud implementation. Now, what happens if the FAButler pours too much alcohol? Is it you or your organization that will be held liable for any damages that could result from a user or guest having too high a blood alcohol content level? The FAButler is not that farfetched, although it has similarities and parallels to the fictional character “Rosie,” the household robot that does all the housework and some of the parenting in the 1962 cartoon The Jet- sons. The premise of the cartoon places the family residing in Orbit City one hundred years into the future, in the year 2062. Now that we are just over halfway to the future date, a mere 50 years from 2062, how much more realistic does Rosie the robot appear today? A simplified visual representation of the interconnected dependences of the FAButler Systems is shown in Figure D.
- 46. 46 The Executive’s Guide to the Internet of Things FIGURE D
- 47. 47 The Executive’s Guide to the Internet of Things The system starts with the mobile phone application, the FAButler App, which is the consumer interface with the entire system. It allows the smartphone user to make requests or speak with the FAButler while it is also making selections and choosing from a list of suggested items based on the current inventory or making sug- gestions for items that could be added to the inventory to create fabulous culinary delights. The app connects to the cloud-implemented FAButler System, which connects to the FAButler device itself and a host of vendors that are also linked into the system. The FAButler System allows you to communicate with your FAButler to order the creation of meals and such on the fly wherever you may be, on a plane, on the road, or in your office. The FAButler then communicates with the refrigerator, wine cellar, and pantry to pull the items and prepare the requested meal just at the scheduled time and place. How many more permu- tations of Web connectedness can you find with this simple example? The advancing changes where objects go from analog or unconnected devices to digitized and connected “smart” devices include several additional opportunities for Web application development, device controls, access permissions, security, governance, and vulnerability assessment, in addition to other functions and tasks. The tendency to migrate more objects, things if you will, into the Web, brings Web developers and information technology managers to a new territory for development, risk, and opportunity.
- 48. 48 The Executive’s Guide to the Internet of Things Case study: From the house to the island: How M2M can cut electricity use By Jack Clark When IBM Master Inventor Andy Stanford-Clark decided to hack his house so he could get a clearer picture of his electricity usage, he had little idea that he was sowing the seeds for a plan to populate an entire English island with sensors. Stanford-Clark had the idea for his “Tweeting house” (as it came to be known) in 2004 when he began installing sensors to closely monitor how much electricity his house was consuming. The project took several years, but eventually he could control the items around his home remotely and monitor exactly what was using electricity. He even set up a Twitter account, where his house would automatically publish information from its sensors. Others on the Isle of Wight, where Stanford-Clark lives, heard about what he was doing. Over several years, what began as a skilled scientist’s hobby blossomed into a scheme to promote more efficient energy use in social housing and, eventually, into a plan to use machine-to-machine (M2M) technologies and a smart grid to make the island a reference for renewably minded regions across the world. Ubiquitous M2M technology has been “imminent” for about 30 years—along with fusion power, quantum computing, and strong artificial intelligence. But like all these technologies, M2M failed to become mainstream on the optimists’ schedule. This has begun to change over the past decade, however, and M2M was the key that allowed Clark to unlock the data in the devices in his home. From the house to the community The journey of Stanford-Clark’s project from his house to the local community and finally to the entire island shows the challenges and opportunities posed by this exciting field. Once Stanford-Clark had wired up his house, he could access near-real- time information about the electricity use of all his household items. The data led to interesting insights that reduced his power bill and helped spot problems in household equipment. “[Now] I have nearly eight years of data from my house to look back over and spot trends and interesting events,” Stanford-Clark says. “An example was when our fridge became faulty and started using a lot more electricity than it should. I spotted that on the graphics really quickly and was able to get the fridge repaired before it added very much to the electricity bill.” As of 2012, Stanford-Clark’s house is reporting about 20 data channels, most of which refresh every six seconds. “It’s quite a lot of data,” he says.
- 49. 49 The Executive’s Guide to the Internet of Things The work that went into wiring up the house was significant: Stanford-Clark had to hack together much of the equipment himself and needed to painstakingly fit monitoring technology in the form of CT Clamps to the wires feeding into the house gear. He also had to combine some commercial IBM messaging technology with a smorgasbord of homebrewed and open source code to create a software package that could pass much of the information around. The core of the technology is the MQTT messaging technology. “When I started the project, it was pioneering work, so I had to build all the sensors and other devices myself and write a lot of the software from scratch,” Stanford-Clark says. “Now, there are many products available which make the job a lot easier, and prices are becoming commoditised, so someone re-creating what I have done would be able to do it by integrating off-the-shelf products and at much lower cost.” These days, things are easier for the consumer, with technologies like Google’s Android operating system, customisable Arduino boards, and a variety of wireless transmitters and receivers available to let them get started. There are even packaged solutions like AlertMe and Current Cost, although their capabilities tend to be restricted to specific areas of the home, such as heating. By smartening his house, Stanford-Clark was able to cut his electricity usage and spot problems with his white goods. This capability is useful to consumers because it lets them save money, useful to government seeking to meet its environmental goals, and useful to utility companies because it gives them more precise billing capabilities. The enabling smart grid and home automation technologies both rely on M2M communi- cation to get their data. Around the time Stanford-Clark was finishing off automating his own house in the late 2000s, a community of sustainability minded people was embarking on the Chale Community Project—a Department of Energy and Climate Change-backed scheme to retrofit some social houses in the village of Chale on the Isle of Wight with solar panels, heat pumps, and other environmentally friendly technology. “What they hadn’t got was any kind of monitoring to see what they were doing,” says Stanford-Clark, so he decided to do some pro-bono work on the project. It eventually turned into an IBM-sanctioned scheme, where Stanford-Clark and two other people equipped around 40 homes on the housing estate with energy- monitoring equipment. This sent usage data to a Web portal where people could log on and see their energy usage graphs. In one house, the system identified an area where the occupier could make an electricity saving of around £175 ($280) per year. The Smart Island One man who was working on the Chale project was David Green. He now runs the Ecoisland scheme, which aims to use a spread of modern M2M and sustainable energy technologies to make the Isle of Wight (population 150,000) a prototype for how other communities across the UK and the wider world can reduce their electricity bills and carbon footprint.
- 50. 50 The Executive’s Guide to the Internet of Things The island is seen as a good testbed for renewable technologies, smart grids, and electric vehicles because of its small size—it has a land area of just 148 square miles. This makes schemes like electric vehicles man- ageable because, as Stanford-Clark points out in an IBM blog post, “the shape and size of the island lends itself very well to this form of smarter transportation, as drivers can never be more than 24 miles (39km) from their home.” As plans for Ecoisland gestated, Green spoke with Stanford-Clark about the feasibility of the project. This led to IBM’s involvement, along with other major companies like Toshiba, SSE, Silver Spring Networks, and Clean Point. The heart of the project is the rollout of an island-wide smart grid that will use automation and monitoring technology to collect and analyse data from sensors and energy meters across the island. The smart grid is expected to be built out within the next two to three years, according to David Green. This will give the island a mesh network of power distribution rather than the typical tree-and-branch model used by traditional utili- ties, which means that energy can be distributed more efficiently according to load and demand. “All these things require a lot of communication back and forth between various nodes in the network without even involving the central control system or utility,” says Alaa Owaineh, senior analyst for energy and sustainability at Ovum. Smart grids are particularly useful for areas where there is a significant contribution from renewable energy, Green says, because the vagaries of the English weather will determine when and how much power is generated by the island’s solar panels. “When the sun is shining, we have about 40 megawatts of solar energy on the island,” Green says. “The other problem it’s causing is that level of peaky renewables leads to a certain level of voltage stabilisation.” The smart grid’s ability to rapidly distribute power loads through a mesh of power lines, rather than through certain predefined distribution points, should allow the island to cope better with its unpredictable solar as- sets. Smart metering Alongside the smart grid build-out, the island’s houses will be fitted with smart meters. “The real motivation for smart metering is to give you an accurate regular bill,” Stanford-Clark says. “The long-term goal of smart metering is the smart grid. It’s not just sending data back to the big hub in the sky— it’s the fact you can send control signals the other way.” To send signals the other way, Ecoisland hopes to outfit around 10,000 homes with Home Energy Manage- ment systems based on Stanford-Clark’s original design (with some refinements). Eventually, this could
- 51. 51 The Executive’s Guide to the Internet of Things expand to cover as many as 35,000 homes. These energy management systems will also unlock the potential of the smart grid by letting homeowners enter into a deal with their power company where, in exchange for the utility having the ability to remotely turn off their household items to regulate demand, they get a substantial rebate. Such agreements will make it easier for utilities to deal with power spikes from renewable energy production, but may be greeted cautiously by some customers. “There’s a tremendous tendency to think of a smart grid like this as a big brother, as a Skynet thing,” David Green says. “My point is very simple: All this, really, is a clever remote control for your house.” The key technologies for the home automation systems that will talk to the smart meter, and then to the utility companies, will be based around Clark’s original home design and will use the MQTT protocol. Homeowners “can either buy an existing system... or can get [Ecoisland’s] system and we would be the managers,” Green said. Once they gain access to home energy monitoring, householders tend to reduce their power consumption by around 25 percent, Green said, so along with creating a more flexible power grid capable of supporting renewable energy, the scheme should also result in lower power bills for consumers. Those involved in the Ecoisland project hope that it will be used as a cookie-cutter prototype for other schemes across the world. And at the heart of this scheme will sit the M2M home energy management systems based on Andy Stan- ford-Clark’s original bout of tinkering. Not bad for a weekend project.
- 52. 52 The Executive’s Guide to the Internet of Things Case study: How M2M makes sense for DBS Bank By Kevin Kwang SINGAPORE—For DBS Bank, machine-to-machine (M2M) communications has been a mainstay in its IT systems. A signal from the automated teller machine (ATM) to the bank’s core system seeking permission to dispense cash to a customer from the person’s account is one basic example of how M2M is core to the local bank’s daily operations. These days, though, the bank is moving beyond merely communicating transactional data and expanding into col- lecting unstructured data from customers’ mobile devices and social media accounts. This move will help the bank better understand and meet its customers’ needs, said David Gledhill, managing director and head of group technology & operations at DBS Bank. DBS Bank case study During an interview with ZDNet Asia, Gledhill said the number of mobile devices used to interact with the bank has “explod- ed.” People used to come to the branch or visit an ATM for their banking needs, but with the Internet, they now use their mobile devices and social media accounts to engage with the bank too, he said. “The prize now is to understand what’s going on across all of these touchpoints and [using the collected data] improve our services, get to know the customer better, and sell our products in a timely way.” Building on existing systems The executive said DBS’ basic core transaction remains mostly the same, but the “bulk of its investment” has been to create a separate repository for unstructured data collected as well as how to store it and analyze the information. Gledhill said the bank was heavily invested in another data warehousing project using Teradata when he joined the bank in 2008, which was why it did not create something new to expand its M2M capabilities but chose to build on top of the existing infrastructure. DBS Bank case study What: Expanding machine-to-machine capabilities from transactional data to col- lecting and mining unstructured data from customers’ mobile devices and social media accounts How: Building a separate data repository for unstructured data and implementing analyt- ics software from various vendors, including Teradata and Progress Software Cost: “In terms of a percentage of our investment dollars, it’s starting to become a significant amount,” Gledhill said. Results: Reduced costs, optimized its net- work, and improved customer experience
- 53. 53 The Executive’s Guide to the Internet of Things Currently, Teradata is the core engine for its analytics library, but the bank is also actively looking at other offerings from vendors such as IBM’s Netezza and EMC’s Greenplum appliances to improve its capabilities, he said. Progress Software provides the real-time, event-driven engine that plugs into DBS’ existing TIBCO middleware layer, he added. “We’ve got a lot of the building blocks in place today, and we’re [now] trialing out a number of different things.” Asked how much the bank has spent to set these systems in place, Gledhill declined to give specific num- bers since those are proprietary. “What I will say is in terms of a percentage of our investment dollars, it’s starting to become a significant amount. It’s real, it’s meaningful, and we believe there’s value to be had.” Making sense of the data The tricky part is figuring out what the bank should react to and how, as it runs the risk of overreacting and scaring the customers with how much it knows about them. “We’re stepping somewhat cautiously into [analyzing customer behavior]. We don’t want any of the Big Brother-type things happening when the customer says, ’Wow, how did they know that?’” Gledhill said. He acknowledged that any customer transaction information is very sensitive, and the bank does restrict access to such data to only a certain group of people. To work around this, it looks at customer trends and other indicative sources of information, such as location data. “If a customer uses an ATM in a shopping center, and we know who they are—their sentiments and prefer- ence—it’s very easy to send them an offer to a merchant in that place and do so in real time,” he said. However, the bank does wrestle with questions such as how often should it send such offers to custom- ers, what kind of offers should it send, and how it should track customer response. “A lot of those are still unanswered questions and we’ll learn as we go about how much is too much in terms of intrusiveness,” Gledhill said. One positive example of how the bank has been using M2M communications to improve its service quality is by “listening” to what its ATMs are saying, in order to reduce maintenance costs and ensure customers will always have access to their funds with minimum inconvenience. Gledhill said it has a schedule of planned downtimes for its ATMs to refill them with cash and provide main- tenance, but such downtimes are expensive for the bank and inconvenient for the customer if the ATM runs out of cash. Now, every transaction from every ATM gets sent to the bank’s Teradata warehouse and it runs advanced forecasting to predict and analyze when a machine will run out seven days in advance. The bank also has a
- 54. 54 The Executive’s Guide to the Internet of Things histogram of when to replace these ATMs, he added. “The project cost the bank a couple of million dollars to build, and payback was 18 months. We’ve reduced cashouts—that is the number of times the machine is out of money—by 80 percent. We’ve reduced cus- tomer complaints dramatically. The whole experience for the customer is much better. “So it has saved me cost. It has optimized our network. It has improved customer experience. It was an experiment when we started, but it has really, really proven to be very effective,” Gledhill said.
- 55. 55 The Executive’s Guide to the Internet of Things Case study: Rural India can give M2M a critical push By Swati Prasad NEW DELHI—The Indian government and local telcos should work together to drive large-scale deployments of machine-to-machine (M2M), which can enhance the life of residents living in villages while bringing more revenues for telcos. M2M holds tremendous potential for rural India, noted David Ranjit William, assistant vice president of engineering, carrier services and solutions, Aricent group. “In rural India, M2M will ensure optimal utilization of limited resources like water and energy, and provide better healthcare and education services to rural masses through remotely managed applications,” William said. Moreover, with the voice market getting saturated and ARPU (average revenue per user) squeezed, telcos are looking for new income opportunities. The introduction of M2M has opened a new business line for these market players, noted Swati Kapoor, research manager at 6Wresearch. There are several rudimentary forms of M2M in rural India, including services such as SMS to provide weather updates and wholesale crop prices to farmers. “With the accelerated adoption of M2M, rural masses could tap solutions that will provide them with more personalized real-time information,” William said. This will help them make more informed decisions. The launch of 3G in the country has also been a growth driver for M2M, which is expected to gain momen- tum in the next five years. “3G allows faster data communication, which was not possible with 2G and 2.5G networks,” Kapoor said.
- 56. 56 The Executive’s Guide to the Internet of Things Projects such as Aadhaar will give further impetus. Coupled with M2M, William said, the national identification number can be used to improve both transparency and utilization of financial benefits being provided to the rural masses. Vishal Tripathi, a principal research analyst for Gartner, said there is considerable scope for M2M deploy- ments in the BFSI (banking, financial services, and insurance) segment. According to a joint study conducted by GSMA and Machina Research, the number of total connected devices will grow from more than nine million today to 24 million in 2020. And according to 6Wresearch, India M2M modules market will reach US$98.38 million by 2016 at a CAGR (compound annual growth rate) of 33.81 percent. Cellular M2M modules are expected to grow at 35.32 percent over the same period, from 2011 to 2016. New applications for villages Several M2M applications have gained popularity in rural India, including Nano Ganesh, which allows farm- ers to use mobile phones to remotely monitor and switch on irrigation pumps in remote locations. The app, developed by Ossian Agro Automation (Pune), works in conjunction with Tata Teleservices phones. Another app that’s helping farmers is SmartMoo. Built by Stellapps Technologies, which was founded in 2011 by a team of IT and telecom professionals, SmartMoo is an automated cow-milking app designed to reduce wastage. A company called Sukrut Systems has developed an app called Silent Observer, which uses sonography ma- chines to monitor pregnancy. “Silent Observer has been deployed in states like Rajasthan and Uttarakhand, and we are in talks with other state governments too,” said Narendra K Saini, CEO of Sukrut Systems. The company also offers a tool that provides weather information to farmers and is now working on a water management application targeted at rural India. To drive the market, India needs to establish M2M standards such as those from Europe, China, and the United States. “India’s M2M market is still not properly commercialized, even in urban areas, so deployments in rural areas will take time,” said Kapoor. Healthcare and banking applications, though, are expected to gain momentum. For instance, to increase financial inclusion in rural India, the government is planning to install micro ATMs, which are handheld devices embedded with biometric functions. These devices are connected over cellular networks to facilitate banking transactions. Connectivity a big concern However, large-scale deployment of M2M applications in rural India is fraught with challenges, where the biggest is the absence of high-speed Internet connectivity, Tripathi noted. William concurred, pointing to
- 57. 57 The Executive’s Guide to the Internet of Things connectivity and coverage as the biggest barriers, as most private telecom operators have limited coverage in rural India. Lack of awareness is another major hurdle. Kapoor said that consumers still rely on traditional wire-based communication systems for transmission. William added that given the low ARPU, telcos remain apprehensive about the profitability of M2M services. There has yet to be a major pilot project that has demonstrated the business benefits of M2M, and this is creating much scepticism in the industry, he explained. The rural market is price-sensitive and has limited access to resources such as power. Access to low-cost devices is another concern. William urged industry players to develop devices suited for Indian conditions, so they should be low-cost while also consuming less power. Saini said, “The telecom operators need to take a more daring approach toward M2M, as it holds the potential to increase ARPUs and reduce the subscriber churn.” He said the government, telcos, and solution providers and consultants in the M2M space need to come together to give this market the critical push. William agreed: “If operators establish network-sharing partnerships, this would substantially lower the cost associated with providing M2M services in rural India.” Indian government must play catalyst The government, for its part, needs to identify opportunities and come up with policy initiatives that will encourage M2M deployments in specific areas, Saini said. Kapoor cited the energy sector as an example where M2M modules are used to capture readings from energy meters. The Indian government is mandating the deployment of digitized energy meters to minimize power loss and theft, and this is expected to create high demand for M2M modules in the country. “It is estimated, in the coming years, around 200 million smart meters will be deployed in the Indian market,” she said. There are growth opportunities in this market since only half of the power transmitted is billed for, according to the government. Rajasthan already has started using M2M modules to capture data from meters to achieve its long-term strategy of deploying smart grids. Tripathi underscored the need for the government to play a dual role, creating an environment that is con- ducive to the growth of M2M in India, as well as giving benefits to M2M service providers to develop an ecosystem. According to William, the Indian government is already addressing M2M communication issues, especially related to 3GPP standards, by establishing research institutes such as the Centre of Excellence in Wireless
- 58. 58 The Executive’s Guide to the Internet of Things Technology. This is a public-private initiative established by the government’s Department of Information Technology in partnership with the Indian telecom industry. “The biggest catalyst will be when the government launches a few M2M initiatives and demonstrates their success. This will automatically fuel private sector involvement,” he said. Swati Prasad is a freelance IT writer based in India.