Innovation. Industrial Market Trend: Investing in the Internet of Things (IoT) RTLS beacon technology connects assets & people
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1 Innovation. RTLS beacon technology connects assets & people Industrial Market Trend: Investing in the Internet of Things (IoT) 2016 THINaër THE INTERNET OF YOUR THINGS
2 Connecting the dots in the real and virtual worlds successfully has always been a challenge. Today, a convergence of technological capabilities is bringing that reality for our homes and our businesses closer than ever. What is IoT? The Internet of Things, or the IoT, is best described as a physical network of connected things. So, what exactly is this connection of things? According to Gartner, the IoT is the network of inanimate objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment. Companies of all sizes are getting in and staking their claims. In fact, the IoT industry could see as many as 200 billion smart devices by Connected and smart enterprises are already uncovering a myriad of new efficiencies and business models never before implemented. This is a huge paradigm shift companies can now know where their assets are at all times, the historical proximity of the assets, how employees interact with the assets, and how often assets are used or needed. For example, early statistics show that hospitals are maintaining up to 40 percent more equipment than is actually needed to provide care. And, field service companies are maintaining 50 percent more inventory than their routes and customers require. IoT results in cost savings and efficiency improvements. This new IoT technology in the marketplace is disruptive and evolutionary IoT is already transforming businesses and industries. And it continues to evolve and mature as new players enter the market and companies explore new ways to use it to solve problems. The Value of Disruptive Technology A disruptive technology displaces an established technology and shakes up an industry or introduces a ground-breaking product that creates a new industry. For example, the PC was portable and could be easily transported which meant business didn t have to stay in one place. , likewise, was opened up new possibilities in business circles, with instant, global, mass communications. Other newer disrupters are tablets and smartphones. These devices, coupled with social media, have forever changed the way we interact with the physical and virtual worlds in both our business and personal lives. Cloud computing has opened new doors by enabling new apps to be developed and launched quickly and affordably, forever changing the software world. IBM Watson technology is bringing deep analytics capabilities to the masses, opening new realms of possibility that was once the sole domain of data scientists (see below). Watson, the first commercially available cognitive computing capability, analyzes high volumes of data and processes information more like a human than a computer by understanding natural language, generating hypotheses based on evidence, and learning as it goes. IBM and Microsoft have taken a leading role in almost all IoT segments, especially the ones ascending in importance analytics, software, systems integration, and IoT platform stability. This is due, IDC says, to their success in blending a cloud strategy with analytics and software capabilities. To IDC s question about the most important digital transformation projects, survey respondents cited cloud transformation, IoT, and big data/cognitive solutions. 1 - THINaër Whitepaper 2016
3 IDC states that these transformational initiatives are interlinked: The cloud gives IoT a platform on which to scale. In addition, the IoT lays the foundation for investments in big data and cognitive solutions, to make sense of all the data that the IoT generates and that resides in the cloud. "The IoT has the potential to impact everything from new product opportunities, to shop floor optimization, to factory worker efficiency gains that will power topline and bottom line gain." Goldman Sachs Even our homes and cities are becoming intelligent. Personal and public transportation is transforming through connected vehicles, and public buildings and infrastructures are getting connected, thus, improving security, energy usage, accessibility, and utilization. The workplace is changing everywhere with the mobilization and superior connection of processes and tools. As the IoT creates opportunity, it also increases complexity, producing vast amounts of data, and creating a maze of details to manage. Realizing the true value of IoT requires: Bridging IT and OT, and supporting the entire organization with a scalable network infrastructure Ensuring protection of the data and analytics collected Securing an organization s technology ecosystem from cloud and fog networks, to the data being shared between servers and devices The Evolution of Cognitive IoT The timeline below depicts the evolution of cognitive IoT and how radio frequency and hardware have evolved to build a foundation for today s Cognitive IoT that is possible because of the convergence of Bluetooth Low Energy, cloud, machine learning, and predictive analytics. IoT first began with passive RFID, which is the use of radio waves to read and capture information stored on a tag attached to an object. Passive RFID just tells us that something passed the reader which is useful for counting or checking in an item. Active RFID has many uses, but the battery life is very short. On top of that, RFID is noisy, expensive and time consuming to deploy and maintain. Other technologies such as EPC and NFC have been tried but with limited success. In 2010, Bluetooth Smart 4.0 or Bluetooth Low Energy (BLE) was introduced. It s signal strength and range makes it excellent for indoor use and its low power consumption means a battery life of at least two to three times that of active RFID tags. As organizations work to make more data-driven decisions from hundreds or thousands of IoT devices 2.5 billion gigabytes of data being created every single day, they need powerful, scalable systems that are 2 - THINaër Whitepaper 2016
4 able to crunch massive amounts of structured and unstructured data and deliver actionable insights within seconds. Deloitte estimates the cognitive computing market will expand in five years to $50 billion in the U.S. alone. Within two years, the IoT will be the single greatest source of data on the planet, generated by billions of interconnected sensors and devices embedded into the world s physical systems. Several established organizations have already jumped on the IoT bandwagon. We will examine these three: IBM Watson, GE, and Cisco. The Role of IBM Watson IoT IBM s Watson technologies use machine learning and natural language processing to reveal insights from this data, helping to transform businesses, lives, and societies. IBM is an established leader in the IoT with more than 6,000 client engagements in 170 countries (up from 4,000 just eight months ago), a growing ecosystem of 1,400+ partners, and more than 750 IoT patents. As part of a global investment of $3 billion designed to bring Watson cognitive computing to IoT, IBM has allocated more than $200 million to its global Watson IoT headquarters in Munich. The investment responds to escalating demand from customers looking to transform their operations using a combination of IoT and artificial intelligence technologies. The Watson IoT headquarters will be home to the first ever cognitive IoT Collaboratories, a hands-on industry lab where clients and partners will work together with IBM s experts to drive collaborative innovation in the automotive, electronics, manufacturing, healthcare and insurance industries. They will apply new concepts and technologies to build IoT solutions; develop and test new business models, solutions, and services; and push the boundaries of what is possible with IoT. IBM is making tremendous strides to ensure that businesses around the world are able to take advantage of this incredible period of technological transformation and develop new products and services that really change people s lives, said Harriet Green, Global Head of IBM s Watson IoT business. Germany is at the forefront, and by inviting clients and partners to join IBM Watson, is opening up its talent and technologies to deliver on the promise of IoT and establish a global hotbed for collaborative innovation. "The massive amount of machine data available today originating from IT machines, sensors, meters, and more requires complex analysis and correlation across different types of data sets." IBM GE s Position in the IoT Game In the industrial market, the IoT is changing everything, or it soon will from industrial equipment, to processes and the way people work, to business models and even core requirements. Everything is shifting. Few companies exemplify this trend more than industrial titan GE, which is helping to drive the IoT revolution. GE Chairman and CEO Jeffrey Immelt emphasized the concentration of elite research universities in GE s new home of Boston the Massachusetts Institute of Technology (MIT) and the University of Massachusetts Lowell (UMass Lowell) and tech firms that place GE at the top of the industrial IoT challenge. GE, with 300,000+ employees and more than $117 billion in annual revenue, is undergoing a revolution driven by digital transformation and what GE calls the Industrial Internet of Things (IIoT). In September 2015, GE announced the development of GE Digital, a new unit intended to make digital the core foundation of GE's operations. 3 - THINaër Whitepaper 2016
5 "As GE transforms to become the world's premier digital industrial company, this will provide GE's customers the best industrial solutions and the software needed to solve real-world problems," Immelt said. It will make GE a digital show site and grow our software and analytics enterprise from $6B in 2015 to a top 10 software company by 2020." Cisco s IoT System The Cisco IoT system, in addition to the other solutions mentioned previously, provides a comprehensive set of products and technologies for creating IoT solutions from cloud to fog. Because it is based on a systems approach, the Cisco IoT enables stronger security, lowers integration costs, and accelerates innovation. Its products and technologies are engineered for the manufacturing, oil and gas, utilities, transportation, mining, and public sector industries. With the Cisco IoT System, businesses can more quickly integrate IT and operational technology (OT) environments and gain new business insights with analytics built into their networks. And, these businesses can deploy physical and cybersecurity consistently, creating innovative infrastructures to compete in the new era of IoT. The Cisco system brings integration, analytics, and security to an organization s IoT efforts. In addition, Cisco IoT security secures cyber assets and physical assets, prevents day-to-day production or business disruptions, and analyzes the organization s risk profile by implementing cybersecurity and physical security mechanisms. Adoption Trends and Strategies Almost every type of company seems to have an IoT strategy in Mattel announced a connected Barbie doll and even a drone. Atari announced that it will make smart home products. Firefox-maker Mozilla is entering the IoT market, as is Visa. Almost daily there is news of a company either entering the IoT market or expanding their business in the sector. With the rush to bring more IoT-enabled products to market, many are teaming with other companies to quickly bridge gaps to address the perceived opportunity, explains Don DeLoach, President and CEO at Infobright. Old-guard tech companies such as IBM and Intel are making big investments in the IoT to compensate for declines in more traditional business segments. Intel, still the world s top chip company, announced a reorganization earlier this year with plans to cut 12,000 workers and funnel the savings to its growing IoT and data center businesses. IBM is following a similar path, making cuts in legacy segments while betting that its Watson technology will find growing use in IoT. For large organizations that have already invested in IoT, the focus has been on internal operational improvements. The primary business case for IoT includes: Improved efficiencies Improved data management Cost savings Enhanced asset utilization The IoT market is maturing, says IDC, going beyond its initial focus on connecting more and more things. Data management is fast becoming the overarching theme, with analytics and the IoT platform emerging as the primary requirements of the 31.4 percent of organizations surveyed that have already launched IoT solutions, and the additional 43 percent looking to jump on board in the next year. 4 - THINaër Whitepaper 2016
6 Early Adopters Today s early adopters, the leaders in IoT, are primarily industrial markets such as healthcare, logistics/supply chain, utilities, process and discrete manufacturing, and others. Leading industries that are investing in IoT are using IoT to enhance operational efficiencies, reduce operational costs, increase profit margins, and improve customer satisfaction. They are applying analytics to the data from their connected assets, equipment and workers to gain insights, improve processes, and make better decisions to transform their businesses. IoT Benefits and Challenges The benefits and challenges of IoT reflect the many aspects of business. Many benefits result from the ability to successfully implement the IoT: Improved business efficiencies/higher productivity Faster innovation cycles Product/service differentiation Cost reductions And, some challenges are evident: Technology complexity Lack of experience in new technology/business model Displacement of existing technological roadmap Security As Industry Week magazine put it, if the Internet of Things were a person, it would be an adolescent: brimming with self-confidence and potential but also wet behind the ears. Companies launching IoT projects must thus take on a parenting role. But dealing with immaturity has never been easy and many organizations are struggling to lead nascent IoT projects with big promises and lots of moving parts. 5 - THINaër Whitepaper 2016
7 If the Internet of Things were a person, it would be an adolescent: brimming with self-confidence and potential but also wet behind the ears. Companies launching IoT projects must thus take on a parenting role Industry Week, October 7, 2016 For IoT to be attainable, affordable and successful for the midmarket. a number of challenges must be addressed. Today s IoT challenges include the following: 1. Insufficient Investment in Project Management One of the most common reasons that IoT projects fail is that companies fail to focus on the soft side of the projects, says Tripp Braden, executive recruiter at Strategic Performance Partners. Many companies put a lot of money into the technology and the people directly working on it, but skimp when it comes to project management... The people who are in charge of IoT projects tend to have solid technical backgrounds, but minimal experience in project management. They often aren't used to working with multiple stakeholders, which IoT projects demand... It is therefore crucial to have a leader who can understand how to manage and lead change across the organization Failure to Get Buy-In Across the Organization It is rare for an IoT project to inspire enthusiasm throughout an entire organization. But that is what is needed for success, said David Graham, deputy chief operating officer of San Diego, recently at Smart Cities Week in Washington D.C. Whether they are cities or industrial facilities, organizations managing IoT projects must know how to wield influence. Internal team members and external partners should be aligned around a shared objective. "This is critical in the industrial space,... it is critical to get the grassroots people involved. They are the ones who can facilitate change." 3. Not Being Able to Update or Replace IoT Components The IoT is an exceptionally dynamic market. Everything is in flux: standards, the vendor landscape, the current offering of IoT platforms, the technology used to connect devices. IoT developers should ensure that every part of the IoT technology can be changed... software, firmware, and hardware. The shifting standards landscape is another important area of focus. While the technology industry has developed software-based solutions to this problem such as componentization and modularization, the same practices must apply to hardware for IoT applications as well, said Nick Jones, vice president and distinguished analyst at Gartner. 4. Underestimating Vendor Risk There has been an explosion of IoT-focused companies in recent years. There is bound to be a Darwinian thinning of the herd. "It's a sad fact that in a lot of software markets, most vendors end up failing in the long term," says Nick Jones of Gartner. If the IoT market follows a similar trajectory, there will be vicious consolidation. "Many of the vendors won't be around in five to ten years' time - the lifespan of the things that you are building," Jones predicts. Count on substantial changes in the form of acquisitions, pivots, and so forth. Build in flexibility and make sure your vendor offers an open system that can interact with your existing systems and various hardware. 6 - THINaër Whitepaper 2016
8 5. Scalability Companies with connected devices often struggle to collect and analyze their machine data in a scalable way, as well as making meaningful use of the data after it has been captured. To overcome this challenge, be sure the vendor offers an industrial grade platform with the ability to connect to other corporate data sources is imperative. Without this interoperability, machine data has no context and cannot be fully utilized. 6. Ability to Share the Data Data needs to be shared with partners and customers to allow them to feel engaged and empowered, instead of constantly reacting to changing situations. While still in its early stages, the IoT movement is quickly gaining momentum by showing that, given the right analytics, companies can be very successful. The vast amount of data from sensors and devices powered by IoT is virtually limitless and can be a massive undertaking which will require a great deal of effort from skilled data scientists and engineers working together to find solutions that are agile, scalable, and cost efficient. Summary Today s fast-paced world demands exceptional information connection and information crisscrossing. The IoT will have a high impact on the many industries because the benefits are clear and easy to measure. Just as in the case of new generations of ERP, organizations will struggle to change the processes required to make business transformation happen. Overall, however, 2016 will soon prove to be a big year for IoT adoption. The marketplace is seeing a wide range of IoT use cases across virtually all industries. Blue Hill Research believes that the recent Advantix launch of THINaër provides the IoT market important tools for managing the real-time optimization of assets, data, utilization rates, and contextual location necessary to maximize the value of the IoT. We are shaping a new way for companies to manage their business. Now we can bring a high degree of intelligence in locating assets and people that gives real-time data... Our adaptive intelligent IoT platform, plus predictive analytics will rapidly deliver new insights and a solid ROI. Bryan Merckling, Founder and CEO, THINaër The IoT impacts every business. Mobile and the IoT will change the types of devices that connect into a company s systems. These newly connected devices will produce new types of data. The IoT will help a business gain efficiency, harness intelligence from a wide range of equipment, improve operations and increase customer satisfaction. The IoT will also have a profound impact on people s lives. It will improve public safety, transportation and healthcare with better information and faster communications of this information. With the launch of THINaër, Advantix is the first communications lifecycle management provider to deliver a complete RTLS IoT solution to the industrial marketplace. A disruptive technology, THINaër, is the industry s first cognitive computing solution that creates a new class of predictive analytics for real-time asset tracking. THINaër makes an organization s existing assets immediately smart and connected with small, Bluetooth lowenergy beacons. The patent-pending THINaër SaaS platform is a revolutionary way to manage hundreds of locations and millions of assets and brings IoT capabilities to companies of all sizes and budgets. 7 - THINaër Whitepaper 2016
9 A tidal wave is coming. By 2025, IoT applications could have an $11 trillion impact. Organizations will be able to analyze all relevant data and deliver actionable information that will achieve an extra $430 billion in business benefits. Bryan Merckling, Founder and CEO, THINaër With only a minority of CIOs and other executives expressing much confidence in their company's ability to manage the scale and scope of data integration needs, most are looking to the industrial internet of things (IIoT) to help address the shortcomings, according to a recent survey from Bit Stew Systems. The resulting report, titled "CIOs Survey: IIoT Adoption - The Real Barriers and Opportunities Ahead, defines IIoT as technology that leverages IoT "to track and manage real-time aspects of businesses and assets, from processes and equipment to predicting when a critical component will fail." In other words, IIoT remains of interest to a broad range of organizations, representing multiple industries. Through IIoT initiatives, businesses are looking to improve operational efficiencies while reducing costs. They also hope to create new revenue streams through new products and services. Having the right data management strategy in place to support these efforts, however, remains key. Without such a strategy, companies may miss out on making key business decisions. About THINaër Launched in 2015, THINaër is an Advantix company that makes assets smart and connected. By hardening IoT technology for the enterprise, THINaër is shaping a new way for companies to gain new context for understanding their business and manage their devices, objects, and people in real time. THINaër delivers affordable RTLS beacon technology with a patent-pending SaaS platform and predictive analytics. Member of the IBM Watson Ecosystem. Copyright 2016 Advantix. All rights reserved. The Internet of Your Things and related logos are trademarks of THINaër. All other trademarks are property of their respective owners. 8 - THINaër Whitepaper 2016
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