Monetization of data collected from networked IoT devices, convergence of multiple disruptive technologies and standards, and network edge processing are among the key trends for 2018 according to the Ernst & Young (EY) IoT Competence Center.
Regardless of the considerable growth of the Internet of Things (IoT) industry, it remains an area that varies greatly in technologies, systems and disparate standards of operation. We take a closer look at EY’s predictions on the proliferation of IoT in 2018.
1. IoT monetization: a transition from ‘value islands’ to ‘value ecosystems’
Business and operational models based on IoT capabilities are still very traditional and the anticipated benefits have primarily focused around how to achieve incremental value (which created value islands) through increased productivity, process automation, and maintenance cost reduction for example.
However, more and more decision-makers are realizing the disruptive potential of IoT and are likely to increase its current value stream (toward value ecosystems) and more effectively use and monetize the data collected.
Aleksander Poniewierski, Global IoT Leader, EY says:
“As executives realize the value creation potential of IoT systems, they are likely to seek new areas of application within their organizations. Our analysis projects that we will see multiple proofs-of-concept of such solutions in 2018, as well as acquisitions of start-ups that have IoT solutions in their portfolio.
“However, this shall bring its own challenges, as it could demand a redesign of business and operating models that require interoperability of current solutions throughout the entire IoT technology stack and the need to embed new IoT sensors in existing products.”
2. A new dawn of network edge processing
The journey from IoT data processing to the network edge was expected to happen in the early years of IoT development. However, this trend slowed due to decreasing connectivity costs and rising communication networks throughput, which resulted in a shift toward centralized processing.
Falling prices and the increasing processing power of edge devices have revived this trend back towards network edge.
Poniewierski says “The changing requirements of connected devices such as throughput and power consumption, have resulted in the need to redesign communication networks from a ’one-size-fits-all‘ concept into networks with flexible characteristics.
“New privacy concerns, especially in Europe, where recent regulations [are being implements]relating to personal data protection rights, may result in companies avoiding the transfer of raw data into the public cloud.
“We therefore expect organizations to increasingly adopt edge of network processing systems.”
3. Disruptive technologies are converging
Technologies like IoT, blockchain, artificial intelligence (AI) and robotic process automation (RPA) are increasingly converging under a single digital disruption umbrella.
In the first half of 2018, EY expects that suppliers will begin to move toward full integration of IT systems supporting business processes and automation solutions in order to build fully integrated ‘Intelligent Automation’ solutions.
Poniewierski states “From a business perspective, digital disruption technologies are complementary and perform unique functions within various parts of the organization.
“We expect that, after a period of initial fascination with pilot implementations of individual disruptive technologies, industry leaders will expect a much more integrated approach to the adoption of digital technologies, and with measurable return on investment.”
4. A battle for standards – IoT connectivity wars
So far IoT interconnectivity has been difficult as players adopt their unique approaches and solutions for different applications. Each promotes their own proprietary standards and protocols, which has led to a multiplicity of closed systems that do not communicate with other devices.
By mid-2018, EY expects the pre-standard 5G mobile network to be launched in the US. This is projected to support virtual private networks with different operational characteristics, and work across multiple frequencies.
While global distribution of 5G networks are not expected until 2020, formalized standards are expected to be in place in 2018 and have the potential to reshape almost all current wireless communication methods used for IoT-based applications.
Poniewierski adds: “IoT cannot thrive without effective and affordable wireless connectivity, interoperability and common standards. We believe 5G has the potential to make a ground-breaking impact on the way in which future IoT ecosystems are designed, especially in the areas of scalability, latency, reliability, security and the level of individual control on connectivity parameters.”
5. From cybersecurity to resilience by design
EY’s analysis reveals that security and privacy concerns are the top factors preventing decision-makers from committing to IoT development and implementation. Increasingly, companies are recognizing that the solutions required to secure centralized IT systems are not sufficient to secure distributed IoT systems, especially in applications requiring high levels of reliability.
Poniewierski concludes: “IoT solutions require simultaneous fulfillment of security, privacy, safety, reliability and resilience that cannot be achieved through securing individual elements of a multipurpose environment.
“Therefore, current approaches must consider changing direction from simply seeking to achieve security, toward a resilience-by-design approach that incorporates redundancy into architectural and organizational design and separates data processing.”