December 15, 2014
You leave the office and head for the parking lot. You start the car. Since it’s your regular quitting time, your home comfort system takes that as an indication you’re on your way, and turns on the air conditioning that’s been idle all day to save money. Traffic is clogged on the highway, so turn-by-turn instructions for the most efficient route home are sent to your car’s heads-up display. Since you’re going to be a few minutes late, the oven delays starting its pre-heat routine, making sure it’s just the right temperature when you walk in the door and pop in the lasagna.
That’s the sexy, consumer face of the promise of
machine-to-machine (M2M) connectivity – the Internet of Things (IOT), as it has become known. But much of the
impact of M2M is going to be felt in the enterprise – on shop floors, heavy manufacturing equipment, in harsh resource industry environments – and in public sector applications. It’s an opportunity that network company Cisco Systems Inc. has famously pegged at $19 trillion and 50 billion connected devices by 2020.
Research firm Gartner estimates that market is about $300
million. But regardless of where the number falls, where are those opportunities?
“The $19 trillion is what we call the ‘value at stake,’” says Victor Woo, general manager of Cisco Canada’s IoT practice. “It really is realizing the potential of M2M or IoT applications across both the public and private sector. And really what it looks at is use cases such as asset utilization, worker collaboration, innovation in terms of driving the top line, improving profits, or lowering costs in terms of driving efficiencies.”
Cisco polled 7,000 customers about the impact connecting unconnected devices, people and processes, Woo says.
“You look at industries that have these dark assets that can be connected, such as heavy industry, oil and gas, retail,” Woo says. “Those are some of the areas that are ripe for opportunity in terms of driving efficiency and reducing costs.”
U.K.-based Ovum research defines M2M as rule-based (for example, time interval or environmental trigger), automated communication between a remote device and a centralized backend infrastructure, according to principal analyst Pauline Trotter.
That communication can also be indirectly or unknowingly triggered by a human. M2M connectivity isn’t billed to an individual, but rather a business-to-business or business-to-business-to-consumer service provider. Ovum is forecasting 162 per cent growth in M2M connections by 2019.
“M2M ‘subscriptions’ are really ‘connections’– discretely paid-for connected devices that feature an embedded modem,” Trotter wrote in an e-mail interview. discre. “They may be end-point devices that establish a point-to-point connection, or hub/gateway/router devices that aggregate and backhaul data from multiple local area network (LAN) devices.” That connection can take place over cellular, satellite, fixed-line or new public mobile networks including Neul (Gaelic for “cloud,” it uses very small slices of spectrum to deliver low-power, low-cost wireless networks for devices) and Sigfox (which complements cellular networks by providing only small message exchanges).
These devices can be implanted virtually anywhere – in cars, in pavement, in thermostats, in heavy machinery. That gives them wide application across verticals.
“There is not a vertical that’s not being touched (by IoT),” says Geoff Bellew, a consultant who leads M2M work at Communitech, a hub for the commercialization of technologies from Waterloo, Ont.-based companies. Founded in 1997, Communitech now represents more than 1,000 companies with $30 billion in annual revenue.
Consider just a few of the M2M companies under the Communitech umbrella and the verticals they cover:
GSTS. A port authority and logistics management startup that recently received federal funding, GST S’s solution tracks signals from shipping containers aboard maritime traffic that indicate position, content, condition and quality position of freight.
Miovision. Monitors traffic to make more efficient decisions regarding traffic routing, traffic light patterns and road construction in connected cities.
Blue Rover. Among its many applications in industry and transportation, the company recently turned every fire hydrant in the city of Guelph, Ont., into a self-monitoring smart hydrant to detect expensive water leakage.
IMS. Best known for technology that monitors driver performance and behavior, allowing insurance companies to apply discounts or penalties and parents to monitor their teens’ driving behavior.
Clearpath Robotics. Creates autonomous devices to do dangerous jobs in the oil and gas industry, like measuring methane or the composition of tailing ponds – jobs too hazardous for humans.
Resource companies can particularly drive efficiencies from M2M connectivity, given often harsh conditions, geographically large operations and the amount of heavy equipment onsite. Dundee Precious Metals is a Toronto-based international gold mining company with operations in Central Europe and Africa. Given a mission of continuous improvement, creating efficiencies and optimizing operations, corporate director of IT Mark Gelsomini has implemented a variety of technologies – radio frequency identification (RFID), Wi-Fi, vehicle tracking, monitoring of machinery, real-time data capture – “a whole slew of technology you wouldn’t normally find in a mine,” he says.
Visibility into the operations of an underground mine is inherently difficult. Performance against plan, mechanical problems, the number of loads moved – all these conditions would be reported in writing or verbally to the mine captain, who would reallocate
resources and revise the plan accordingly.
With M2M technology below the surface, Dundee has better visibility into mine operations.
“We’ve taken the lid off the mine,” Gelsomini say. “The variation of ‘did it happen or didn’t it happen’ is eliminated.”
Sensors in-mine and on machinery feed a control room dashboard displaying planned production versus actual production, vehicle location and maintenance state. If a vehicle goes into a maintenance state, the control room can reallocate workloads. Plans can be revised on the fly.
Above and below ground, seismic sensors measure the effects of blasting; gas sensors monitor air quality; water level and the draw from power stations are all fed into the dashboard. The goal is to take the operation to two million tons (OF WHAT AND OVER HOW LONG?).
“We have clear business objectives, clear business guidance,” about what performance metrics have to be improved, Gelsomini says.
The automotive sector may be most well-known for penetration of M2M technology, and on that front, Waterloo-based BlackBerry is in the driver’s seat. In 2010, BlackBerry – then known as Research in Motion – acquired QNX, a micro-kernel operating system with a long list of customers in the automotive space: Ford, BMW, Chrysler, Honda, Mercedes, Toyota and General Motors (QNX is the operating system GM’s OnStar feature runs on). According to IHS Automotive, QNX owns half of the in-car infotainment market.
But that’s only part of the in-car equation, Bellew says. There’s a migration toward diagnostics – sensors monitoring the condition of various components.
This could allow your dealer to push an offer if, say, your alignment is out of whack. Alternatively, it could allow a repair chain, or Canadian Tire, to do the same. “Everybody wants to play in that space,” Bellew says. “There’s a lot of money in that.”
Then there’s the technology to monitor the car’s interaction with its external environment– other cars, potholes, road conditions – and respond autonomously to those, whether it’s to automatically generate an e-mail to highway services or simply slow the vehicle accordingly. Ultimately, the entire transportation web can interact electronically to guide signal management, road management, traffic routing – virtually the entire transportation infrastructure. Cost savings and environmental impact could be huge, Bellew says.
Who will aggregate?
Simply connecting the unconnected is not a lucrative strategy in the long term, says Ovum’s Trotter.
“Telcos recognize that the main source of revenue in future is not going to be in connectivity, which can only commoditize,” he says. “They are excited by the big data opportunity and they see this as a way of growing their M2M revenues significantly. Operators are particularly attracted to the emerging B2B2C market, which they see as broader and less specialized than the B2B market and clustered around related applications and verticals, for example smart cities and smart cars.”
If aggregating M2M data and turning it into useful applications is where the real value is, who’ll do the aggregating? Technology companies like Apple and Google, who already have a strong footprint in mobile and vast big data resources and experience? The telcos themselves, with an infrastructure suited to the necessary ubiquitous coverage and unique business and billing models?
“It’s going to be all of the above, says Woo. “What we are seeing is a new generation of ecosystems being developed. As much as we are getting into the Internet of Everything or a ‘things economy,’ we’re entering an applications economy, where people can pull this data from different sources and essentially create new business models.”
Daniel Ko, research manager, information management for Info-Tech Research Group, sees a variety of aggregation models developing.
“M2M innovation requires three ingredients: endorsement, budget and innovative minds,” Ko wrote in an e-mail interview.” No single organization can put together all those ingredients. What we will see is an alliance among governments, Fortune 100 companies and the crowd sourcing community partnering together to innovate.”
Governments will provide top-down endorsement for M2M technologies, naming them as strategic priorities. But many are budget-challenged, and will be looking to partner with Fortune 100 companies, who can allocate funding for M2M research, and will have to work collaboratively with other companies to develop standards and protocols.
M2M technology development depends on expertise across a variety of technical backgrounds – artificial intelligence, big data, communications networking – as well as more sociologically oriented disciplines like behavioural economics and interface design, Ko says.
The wild card in M2M development may be the crowdsourcing community, Ko believes.
“The crowdsourcing community is very autonomous in nature and they don’t have traditional boundaries such as policies, politics and power struggle (like their) government and corporate counterparts to limit their innovations,” Ko says.” Without the boundaries, the sky’s the limit and innovations will go wild, sometimes.”C+
Dave Webb is a Toronto-based freelance writer. He can be reached at firstname.lastname@example.org.