Despite the hype and potential of IoT to automate processes and make life smarter, several issues can hinder its adoption in India By Pankaj Maru
With cloud and mobility gaining some maturity the world over, tech giants like Cisco, IBM, Google, GE, Qualcomm, SAP, Intel, Bosch, ARM and others are all geared up to give a big push to the new concept of Internet of Things (IoT).
Although IoT as a technology is futuristic in nature, these vendors are betting big on it and pitching it differently in the market—each eyeing for itself a bigger chunk of the potential revenue from IoT devices and solutions.
Cisco, one of the early IoT proponents, defines it as Internet of Everything (IoE), German engineering firm Bosch calls it Internet of Things and Services (IoTS), and GE states IoT as Industrial Internet. Likewise, Intel and IBM term it as Intelligent Systems and Smart Planet respectively.
Every vendor is trying to present IoT under different nomenclature and marketing it based on how its own interests are fulfilled best.
For instance, Cisco differentiates IoT and IoE by pointing out that the former as a concept has been in existence for quite some time but the latter encompasses more value creation. According to Nal Gollagunata, Director – Business Development, Cisco India & SAARC, IoE is actually the one that brings in a lot of value, while IoT is just about connecting devices on any network like M2M (machine-to-machine communication)—but it doesn’t include people and processes.
“IoE actually has four elements to it—devices, data, processes and people; when these four pieces are put together, it will help to drive business impact. When devices are connected, data gets generated, which is then processed using data analytics and then people can actually use that processed data for making business decisions,” says Gollagunata.
In spite of the fact that these vendors have drawn some lines around IoT offerings, they have attempted to come together to work in the area of standardisation of technology and devices, through a group. In March this year, AT&T, GE, Cisco, IBM and Intel formed the Industrial Internet Consortium (IIC) to drive IoT globally.
Market opportunities
According to the Cisco IoE Value Index study released in 2013, globally, $14.4 trillion of value will be at stake over the next decade (2013-2022). The company defines value at stake as the potential bottom line value that can be created or will migrate among private sector companies and sectors based on their ability to harness IoT.
The study further estimates that for all the participating vendors in this sphere, the total addressable market will touch $4.1 trillion in annual revenue by 2016.
According to Shalil Gupta, Insights and Consulting Director, IDC India, vendors will have big opportunities around IoT in solutions, services, analytics, integration and platforms.
“IoT will offer a good edge to C-level professionals like COOs, CMOs and CFOs and they will get more value out of IT. Use cases like M2M communications would be the technical driver, while IoT would be the business driver,” says Gupta.
IDC has its own estimates of the potential revenue from IOT. “Globally, there will be around 30 billion end points, which will generate revenue of $8.9 trillion by 2020, as per IDC estimates. This offers opportunity for user organisations as well as vendors,” says Gupta. He adds that cloud and mobility actually enable IoT in six key areas: connectivity, platform, service, software, analytics and devices.
Ganesh Ramamoorthy, Vice President – Research, Gartner, says that primarily, for the top 10 tech suppliers, the IoT market is across the globe, and they are trying to offer industry-specific solutions.
“From the customers’ point of view, these suppliers are mostly looking at major clients like the Fortune 500 for IoT and also the demand at large is coming from end user organisations in the US and Europe regions,” says Ramamoorthy.
In terms of solutions usage, Gupta of IDC suggests that the large enterprises would adopt those IoT solutions to improve their service levels and processes proactively by using sensor-based analysis and customised technology and solutions. “This would help companies to become more reliable, deliver services faster and differentiate in the market,” says Gupta.
The India market
There is a lot of talk about IoT in India, but there’s no specific data to indicate the market potential in the country. However, factors like lack of adequate infrastructure and connectivity, network and power outages and others might act as obstacles in IoT adoption.
“There is no data available in the Indian market at this point of time. And it’s difficult to predict whether India will have a proper infrastructure in place even by 2020 to drive IoT here. But by 2020, we could see some investments happening from large user organisations,” says Ramamoorthy of Gartner.
In Ramamoorthy’s view, the motivation for adopting IoT changes from one industry to the other. Three verticals—energy and utility, automotive and healthcare—he says, are seeing good adoption.
“In the energy and utility sector, enterprises are adopting smart grids to manage and monitor large infrastructure and effectively use power. In the automotive sector, new vehicles are fixed with electronic systems like advanced driver assistant systems which can integrate with the vehicles’ main systems for better control and monitoring of vehicles,” says Ramamoorthy.
According to Ramamoorthy, the healthcare sector will be the biggest adopter of IoT, and today there are a range of wearable devices available in the market that help one to monitor several body functions. IoT enables such devices to automatically transmit data over a wireless network to doctors, health advisors and hospitals.
Other opportunities for IoT in India exist in large projects such as smart buildings and cities, smart traffic management, water management, etc.
In India, companies like Cisco, Bosch, WebNMS and many others are banking on large private as well as government enterprises to offer their solutions and products.
“In the last 12-18 months, we have seen a rise in awareness levels in the market, specifically on the M2M side of IoT, which was not there three years ago. Today, ATM operators, retailers, telcos and automotive companies are showing lots of interest in M2M,” says Prabhu Ramachandra, Director – WebNMS, a part of Zoho Corporation. He adds that adoption of the technology, even though it is low, is on the B2B side rather than consumer side.
Talking about its India customers, Gollagunata of Cisco says that one of its clients is a Pune based automotive vendor that is among the top three in India. “The solution is helping the customer generate real time reports tracking movement in the plant, monitoring assets as well as finding out supply shortages,” he says.
Stressing on the real-time nature of reports and data, Gollagunata says that earlier, it used to take a whole month for the company to get those utilisation and assembly line reports, but now data is available in real time. This helps the management to take prompt action in case of any issues at the plant.
For WebNMS, firms such as mobile tower operators and power grids are using its M2M solutions for monitoring and management on a trial basis. “Basically they (customers) are trying to understand how much these solutions can help them in reducing overall costs and managing infrastructure remotely,” says Ramachandra.
Then there are IoT solutions developed by the India research units of global firms. Developed primarily for advanced markets, these might find their place in India over time. For instance, Bangalore based Robert Bosch Engineering and Business Solutions Limited (RBEI), a 100% subsidiary of Bosch, has developed many solutions around IoT in the past few years. These include software applications like smart street lighting to help improve the safety in public spaces and optimise power consumption and intelligent Transport Management System (iTrams) for fleet operators and original equipment manufacturers (OEMs) to manage their vehicles efficiently.
Since the IoT concept is new and typically requires huge investments, most customers are first looking at pilots or trial-based implementations.
“From CIOs’ and enterprises’ perspective in India, there’s a need to have a business case around IoT. They are aware of IoT, but are still figuring out what value and benefits it can bring to businesses. So at this point of time, they are thinking whether it makes sense to invest in IoT or not,” says Ramamoorthy of Gartner.
What Indian CIOs think
In general, Indian CIOs are aware about IoT to an extent, but call it as a futuristic technology. As per a recent IDC survey of 50 Indian organisations, 30% of them had some idea or vision in mind around M2M, with regard to IoT, but they are not fully aware of the benefits it can bring.
According to KNC Nair, Group CIO, Muthoot Group, IoT is definitely futuristic in nature. But he feels that in the technology world, the future comes faster. “As we have seen in the case of mobile phones in India, who would have thought that mobile phones would reach so fast across India in such huge numbers,” he says.
“From an Indian enterprise perspective, IoT is still at a very preliminary stage and its usage and application would be more or less by large enterprises and organisations,” says Nair.
Likewise, Jitendra Singh, Group CIO, Nagarjuna Fertilizers & Chemicals, also considers IoT to be at a very nascent stage and immature for enterprises to adopt. “In terms of IoT usage and adoption, broadly it has two areas – IT and the manufacturing sector. On the IT side, it will be largely adopted by internal IT of organisations and enterprises,” he says.
According to Singh, the manufacturing sector will take much longer to adopt IoT, maybe more than 5-7 years.
Singh says that internal IT will largely adopt IoT for better control and monitoring, while industrial IT will use IoT for automation of processes, to reduce time and cost; and to improve overall efficiency—though industrial IT would be quite slow to adopt it.
Taking a different view that pertains to interoperability, V Srinivas, EVP – IT, Sanmar Group, says, “Basically, IoT in an Indian enterprise context has many areas that need to be dealt with. For instance, there is an issue around technology and device interoperability. Most vendors want to push their own proprietary software products and devices or operating systems, so there needs to be a commonality; otherwise, it poses a big challenge.”
Srinivas opines that even before Indian enterprises start to think of IoT, the fact remains that not many organisations have actually invested in office or plant/factory automation (M2M). In terms of technology challenges, Srinivas makes a very valid point about how Indian enterprises continue to use the old technology or infrastructure, causing a “technology conflict.”
“Compared to other countries, Indian enterprises don’t refresh hardware more frequently or in a time bound way, which could easily lead to the situation of “technology conflict.” So, whether the existing or old infrastructure and systems can continue to work or support the new version of software or technology remains a key problem,” he says.
Despite these challenges, Indian CIOs are quite positive about IoT. Interestingly, Nair has done some experimentation around IoT at his organisation, Muthoot Finance, which provides cash loans against deposit of gold items across India. The organisation is exploring ways to use IoT for enhancing the safety and security of gold packets and deposits.
“Internally, we are doing a pilot project that involves tagging gold packets with RFID tags and motion detection sensors, which helps in auditing of gold packets through devices. This allows easy detection and monitoring of entire packets in a short time,” says Nair.
Similarly, ATMs in India can be embedded with chips and systems that can identify or detect the actual customers using some IoT based devices and technologies. This could fortify security of ATMs as well as bring down the cost of physical security and dependency on human guards.
Concerns around IoT
“IoT also has its own set of challenges as well. Infrastructure is among the key challenges in India. How can we see interconnectivity with devices where there’s no power in the rural areas?” asks Nair.
“Another challenge is the lack of ecosystem around IoT. There’s a lack of technology standardisation for interconnectivity of devices from different vendors. Besides, there are prevailing concerns of data security and privacy,” cautions Nair.
Giving the example of the UID project in India, Nair says that many people are having concerns around the UID project and have apprehensions over the personal data and its security. “These apprehensions are natural,” says Nair.
Singh of Nagarjuna Fertilizers agrees that security is a key concern around IoT, but plays them down. “Those security concerns are not so threatening as to hamper adoption. Probably, most CIOs/CISOs will try to adopt IoT with a pinch of salt as it’s more to do with the mindset.”
Even vendors admit that security remains a key aspect in IoT. “Though I don’t call security a concern, but it’s a very important metric the way people look at it today,” says Gollagunata of Cisco.
Ramachandra of WebNMS says, “Given such concerns, we are offering our solutions that can easily run in a private cloud and also follow standard security mechanisms like encryption, SSL over HTTPS and others.”
Talking about the lack of adequate ecosystem around IoT, Ramachandra says that vendors, technology suppliers and system integrators will all need to work together to build the ecosystem—it’s more like the chicken-and-egg problem at the moment.
Another concern voiced by CIOs is that IoT will actually push the demand of storage and data access or the Internet, and could easily put an additional cost burden on enterprises.
“IoT will see a surge in demand for storage solutions and no enterprise can afford to invest in on-premise storage. The only option to save the cost on storage is to have cloud-based storage. Besides that, cost linked with accessing data is another factor that enterprises will need to look at,” says Srinivas.
He suggests that the service providers (Internet and telcos) need to consult with policy makers and government authorities like TRAI to ensure that the cost of data access and usage remains low. “This would ensure enterprises are able to use IoT-based solutions. This also links to the state of infrastructure in India, because IoT needs high speed Internet and connectivity,” he says.
Going by the prevailing views, though IoT brings ample benefits and opportunities for enterprises, India still has a long way to go before IoT becomes a big reality here.