The IoT - chasing a public sector happy hunting-ground?

Profile picture for user catheverett By Cath Everett February 5, 2017
Summary:
Despite all the buzz around the Internet of Things and some interesting public sector use cases, it is still a very immature market. So just where is the IoT at in terms of development and where does its greatest potential lie?

IoT concept with cup of coffee © Melpomene - Fotolia.com

Given the seemingly endless hype around the Internet of Things (IoT), which makes it seem like the technology has been around for ever in one shape or form, you could be forgiven for thinking that the market was, at the very least, starting to mature.

But the opposite appears to be true. In fact, it seems to be very much in its infancy. That doesn’t stop its proponents making big claims, however. The most commonly cited one is that the IOT will consist of almost 50 billion connected devices by 2020.

Such forecasts have since been almost universally revised down though and vary widely depending on which market researcher you listen to. Gartner, for instance, estimated that, in 2016, the world was playing host to about 6.4 billion devices, not including smartphones, tablets or computers. IDC, on the other hand, believed the figure to be about nine million, while IHS Markit thought it was more like 17.6 billion, if all of the previously mentioned devices were included anyway.

But as Professor William Webb, chief executive of Weightless SIG, a standards organisation for IOT connectivity technology and director of wireless communications consultancy Webb Search, succinctly put it at the Westminster eForum seminar on the Internet of Things in London last week:

The IOT is a long way from widespread adoption.

Tom Rebbeck, research director for the digital economy at Analysys Mason, agreed. He indicated that the UK’s IoT market in particular had grown by a very respectable average of 13% over the last four years compared with overall economic growth rates of between 2-3%. As a result, the number of connected devices in the country had risen to 2.6 billion, making it a £60 billion or so business.

But he pointed out that so far the use cases for the technology have been neither “radical nor transformational”. While smart street lighting may have enabled one UK local council to halve its energy bill to £3 million, and manufacturers can now predict when component parts of their diggers are likely to go wrong, it is far from revolutionary stuff. Rebbeck explained his viewpoint:

You can do things more efficiently and effectively with the IoT, but the outcome’s not changed…..It’s not radical or transformational. We’ve over-sold the idea of transformation…So now it’s got to the point where we need to start thinking more about the outcomes we need to achieve rather than the technology itself. In terms of smart cities and diggers, it’s easy to see, but what we’re struggling to predict is new use cases – and some verticals will definitely be transformed by this technology.

As for Simon Ford, senior director of the mbed OS for IoT at chip designer ARM, he believes that, although much of the focus and noise has so far been on the consumer space around concepts such as the ‘connected home, it is actually the business market where these more radical use cases will first appear. He predicted:

It will start initially with industry using technology to transform businesses rather than it being about domestic usage. The direct return on investment to be gained from enhanced productivity and cost reduction means that people will apply their minds.….And when everything’s in place, it will be very disruptive as new entrants open up the market.

The biggest potential market, meanwhile, is likely to be the public sector, with the government being the largest single procurer in areas ranging from transport to health, according to Caroline Gorski, head of IoT at Digital Catapult, a body tasked with growing the UK’s digital economy.

The need for standards

But for this situation to come about, a number of considerations will need to be met, not least the creation of global, open standards, particularly in the areas of interoperability and security. As David Cuckow, head of global engagement at the Hypercat Alliance for the British Standards Institution (BSI), expounded:

Interoperability is fundamental to the economic impact of the IoT, and if we don’t have it, it won’t reach it’s full potential. In fact, about 40% of the benefits of smart cities are based on interoperability and sharing data……We currently live in a world of siloed data. But the real value of the IoT is when we get access to that data so we can look for a needle in a haystack and see how to use it.

To make this scenario possible, IoT information will need to be processed using big data analytics tools and techniques in order to see patterns and links between different data sets, often but not necessarily in real-time depending on requirements. Being able to see these patterns and links should, in theory, enable not only predictive analytics to do things like detect faults in machines before they happen. It should also make the creation of new products and services possible by spotting potential customer needs or gaps in the market.

Pilgrim Beart, founder and chief executive of automated connected device platform provider, DevicePilot, explained:

There’s the potential to use the data to sell new products to someone. So for example, if from your thermostat readings it’s possible to see that your house has cooled down or is cooler than it should be, a supplier could get in touch and offer to sell you insulation. It puts the need together with the sales opportunity.

At the moment though, while deployment of IoT devices may be “getting there” in his opinion, a big problem is that all too often these devices “just do one thing”. For instance, while smart street lights may be able to dim or brighten themselves automatically in response to external conditions, they currently do not act as controllers for smart bins, smart parking and the like. As a result, he too believes that the future lies in interoperability. Beart said:

It’s when you try to mash the data up with other things, that’s the really interesting thing – and it’s where the greatest potential lies.

Simon Navin, smart cities project lead at the Ordnance Survey, a UK government agency for mapping the country, agreed. In his opinion:

If you can pump out billions of pieces of information and transfer it into a geo-spatial environment, you can make lots of correlations so, for example, what is the greenest route to work without your health suffering due to air pollution….And you can also start thinking about different business models - so could you trade data held in a data exchange, for instance? The idea is that if you have better infrastructure in place, you can make better decisions.

My take

The Internet of Things may have promise, but it seems to have been a long time coming. It’s been on Gartner’s hype cycle for at least a couple of years and was first coined as a phrase by co-founder of the US’ first cellular network provider Cellular One, Peter Lewis as far back as 1985.

In a follow-up article this week, I’ll explore just what key challenges have been holding the sector back and also look at what some of the potential solutions may be.