“Our role is to be a market maker of IoT,” Cisco CTO Pasmadree Warrior proclaimed at the second annual Internet of Things World Forum held in Chicago last week. Since embarking on this project eight years ago, Cisco has ignited considerable interest in the connection of sensors, networks and analytics, a confluence of technologies that has become known as IoT. In response to the question “Have we crossed the credibility gap?” Cisco head of IoT marketing Inbar Lasser-Raab noted the following in her introductory remarks at the forum event: IoT now tops the Gartner hype cycle, ranks third in a McKinsey and Goldman Sachs study of disruptive technologies, and was the subject of an Economist survey that found 95% of respondents plan to deploy IoT in the next three years. Cisco’s own research is consistent with these independent perspectives: a Cisco study concluded that 83% of those surveyed will increase IoT investment over three years, with oil and gas, manufacturing and transport leading the investment curve.
To reinforce the message that “the Internet of Things is ‘here’ and ‘now’,” chief globalization officer and primary architect of Cisco’s IoT strategy Wim Elfrink added that the number of IoT standards bodies has increased from two to seven, media coverage has exploded, Google search trends are “doubling every year,” while the number of enterprises participating in IoT consortia has increased from 7 in 2012 to 260 today — “business sentiment numbers,” he claimed, “that are almost that of a mature industry.” Convinced yet? To offer the engineer’s perspective, Elfrink also presented the Cisco Consulting Services’ “IoT Acceleration Dashboard,” which has monitored IoT progress in industrial environments through four key metrics: the shipment of sensors, which have doubled since 2012 to reach 23.54 billion in 2014; the total number of “connections” which has grown from 8.7 to 14.4 billion; machine to machine (M2M) connections, which have increased from 2.8 to 4.1 billion; and total IP traffic in exabytes/month, which has increased from 43.57 to 62.47 in 2014. In terms of overall investment, he noted, 300,000 people now have jobs developing IoT products, startups have increased from 51 in 2013 to 189 today, VCs will invest $1.6 billion this year (10% of all VC investment), and acquisitions in the IoT space which represented $300 million in 2012 have risen to a value of $2.9 billion in 2014. In addition, Cisco’s calculation of the IoT opportunity has grown from $1.16 trillion in 2012 to 2.3 trillion in revenue now — “three to four times the growth rate of traditional IT.”
Elfrink’s focus on industry stems from his belief that manufacturing and the public sector represent two of the biggest “priorities” — or IoT opportunities — going forward. By 2016-2017, he expects that IoT applications in industrial settings will “eclipse” the consumer market for IoT connectivity to shift market potential to industry. This is a lesson that host of this year’s IoT event, the city of Chicago, appears to have absorbed: as Deputy Mayor Steve Koch, put it, “Chicago is a test bed where we will show what can happen and how the IoT can change people’s lives. There are two big areas where we can make difference: how effectively and efficiently we provide services, and the other big opportunity is transformational change in manufacturing, where we meld the digital world with the manufacturing world. We want to be the centre of this industry, where people get jobs… We want to grow with the IoT, our work force is very tech savvy, Chicago is the place to test and commercialize technology — this important for Chicago.”
As a showcase for IoT, Chicago had much to offer, including new citizen services such as snow plow and rat tracking apps, sensored traffic lighting systems to improve traffic flow and pedestrian safety, and predictive policing that takes advantage of location-based analytics and the integration of different data sets to identify and intervene with potential offenders. (For more on Chicago IoT innovation, see video at the end of this article)
But like Chicago, Cisco is impatient to drive IoT past the Gartner “peak of inflated expectations” (where it’s now perched on the hype cycle) to the “plateau of productivity” where revenue expectations are realized. But how to shorten time in the Gartner purgatory? According to Cisco, the answer lies in “normalizing” IoT, moving the market mainstream beyond the realm of the early adopters to broad deployment through five key tactics on display at the event.
Showcase business value
While IoT is essentially a technology play, event organizers opted for a case study approach that would focus on the benefits of change management and the digital transformation of business processes in various partner and customer settings. Drawn largely from industrial segments (where the new IoT money is), these cases included Rockwell Automation, a 111 year old industrial automation specialist that works with clients in mining, oil and gas, the automotive and food industries to name a few. Rockwell’s aim in the IoT space is to speed the convergence of manufacturing operational technology (OT) and digital technologies to enable Industrial IoT.
According to CEO Keith Nosbusch, Rockwell’s main offering, “Connected Enterprise” (integrated IT/OT systems) delivers traditional customer value drivers such as faster time to market, lower TCO, improved asset management, and better enterprise risk management more efficiently, but is not without challenges. Particular focus points are the need to connect IT and OT, which historically are “two different worlds” (both culturally and from a platform standpoint), OT requirements for real time data acted upon in milliseconds and the prioritization of safety and security, the transactional nature of IT which entails greater tolerance of software patches and upgrades, and difficulties in achieving the performance offered by IP based, robust networking with proprietary, industrial operational technologies. Nosbuch remains optimistic, however, about the potential for scalable computing and analytics and for SIP-enabled industrial systems to use real time data on the shop floor, and looks forward to industry transformation that will be faster in the next 10 years than in the past 50 — as well as to Rockwell business opportunity indicated by this sound bite: so far, according to Rockwell, only 14% of US enterprises have connected their machines to their enterprise network.
If Rockwell Automation shared some of the systematic challenges and opportunities in the evolution of Industrial IoT, Rio Tinto head of innovation John McGagh met the audience head-on with a solution his Mine of the Future group has developed in collaboration with University of Sydney researchers to address the fact that “mining is physical; it’s connected to places.” According to McGagh, the traditional fixed approach to collecting sensor data is difficult in mining as machines move, and the land and geology constantly undergo change as operations progress. Rio Tinto’s solution was Autonomous Haulage Systems (AHS), a connected platform that relies on GPS and use of remote controlled autonomous trucks, drilling/digging equipment as sensors that collect data and information on mining operation. Since Rio Tinto mines “are about the size of a city,” McGagh noted that it was necessary to set up significant networking infrastructure to support the [data] compilation system, the planning system and the control system, but this has enabled new levels of expert collaboration on the “sense, think and act in real time” imperatives, as well as improved safety on the ground through radar-based collision avoidance in connected vehicles. Interestingly, McGagh observed that “we didn’t know it was called the IoT when we started this thing.”
Strengthen the IoT ecosystem
As CEO John Chambers noted in his closing keynote, “Nobody can do this all on their own,” and while partnering on IoT may sometimes involve taking the “less selfish” route, companies that cooperate in the creation of a viable ecosystem will ultimately benefit from the “double double bottom line.” In other words, the total revenue pie only gets bigger if providers can work together in the creation of end to end solutions. While this cooperation is encouraged through networking at events like the IoT World Forum, Cisco highlighted several additional initiatives, including creation of a number of community-led IoT Steering Committees organized by vertical industry (education, health, manufacturing, energy, retail, transportation and smart city) and into horizontal working groups (security/privacy; standards and interoperability; architecture, management, analyst; innovations, startups, IoT trends; sensors and embedded OS; GTM and new business models, and marketing). In addition, Cisco has established five IoT Innovation Centres, partnered with other vendors (Rockwell, Schneider, Itron, AGT, Emerson, Honeywell and Black & Veatch), participates in a variety of standards bodies (IEEE, IETF, etc.) and was a founding member, along with AT&T, GE, IBM and Intel, of the Industrial Internet Consortium (which now boasts 75 companies) and is a member Open Interconnect.
At the Chicago event, Cisco announced its latest effort to build cooperation: an IoT Reference Model that Kip Compton, GM of Cisco’s IoT systems and software group, positioned as an effort to develop the “taxonomies” needed by companies in the industry to talk in a consistent way about building IoT solutions. Not surprisingly, in a presentation designed to showcase application of the Model delivered by leader of Cisco’s IoT reference model initiative, Jim Green, the new framework offered pride of place for Cisco’s new fog platform — the IOx, designed to accommodate processing at the edge, which is expected to be a large feature of distributed IoT computing going forward. Stay tuned for more to come from InsightaaS on the new Reference Model.
Build knowledge and skills
According to Cisco Services GM Jeanne Beliveau-Dunn, the number one challenge for IoT going forward is talent management. Skill sets that will be needed for “the jobs of the future,” and that companies will need to source as they build out digital infrastructure include programmable networking (we will need to reskill 2.2 million networking specialists and to retrain 4,000 specialists to ensure industrial networks can talk to the Internet. In addition, Beliveau-Dunn forecasts we will need to quadruple the number of data scientists we have (to between 300 and 400 thousand), to increase the number of cyber security experts we need by a million, and to also dramatically increase the number of business transformation practitioners. In short — though the numbers are long — “this will be a fundamental shift as it will change every job in IT, in marketing, etc.,” she claimed. To help, Cisco announced at the Forum the creation of the Industry Talent Consortium, whose founding members include Stanford University, MIT Sloan Executive Education, the NY Academy of Science, Pearson, Xerox, Career Builder, Knod, GE, Udacity, Rockwell Automation, Davra Networks and Cisco. The goal is to increase this membership to thousands in order to support the development of educational programs and certification for new job roles and reskilling in key IoT fields.
Investment in innovation
Beyond investment in internal R&D and the IoT Innovation Centres, Cisco is also working to engage the creative energies of the startup community. Through a Grand IoT Innovation Challenges, a Grand Innovation Challenge in China and a Hackathon, Cisco has added game to innovation. This year’s winners include relayr, waygum, toymail, Mash5, Zillionsource, Fleetmatics, and Geoanimaniacs. At next year’s Forum in Dubai, Pasmadree Warrior is looking forward to awarding first in the Young Women’s Innovation Grand Challenge, a completion launched in Chicago to encourage broader participation of women in the IT industry.