iot | Paul Wallbank - Communications Professional

How to make the IoT pay

Keeping things simple for the home and selling efficiencies to big business are the way to make money from the IoT

How do companies sell the internet of things to consumers? This was the question at the opening panel of the Internet of Things World conference in San Francisco this morning.

Belkin’s Chief Technology Officer Brian van Harlingen took the lead in the panel stating that the opportunity lies in making sense out of the IoT’s complexity. “With data comes complexity, we have to make it simple for the end user,” said Van Harlingen

Van Harlingen’s view was backed up by Verizon’s Chief Data Scientist, Ashok Srivastava, who understandably sees the challenge of managing the information generated by masses of devices as being an opportunity for his company and data scientists in general.

That masses of data is being generated isn’t surprising seeing the other member of the morning’s panel was Jason Johnson, Co-founder and CEO of smart lock maker August. That the ordinary door lock may be generating masses of data indicates just how much information might be churning around the average smart home in the near future.

Cut out the complexity

It may well be that all of this data and complexity isn’t necessary as Joe Dada, the CEO and founder of smarthome company Insteon, point out. “Leave the network as quiet as you can,” is his advice. “People over-estimate the amount of data that needs to be pushed across the network.”

Dada, a twenty-five year veteran of the smarthome industry, sees the over-complication of the IoT as being a weakness in many of the products and business models being touted today with his company selling their products on being convenient, safe and fun.

While Dada has a successful business model, many of the other business don’t and exactly how to make money from the IoT wasn’t really answered by the panel.

Capturing efficiencies

It may well be that for many the answer lies in making existing products better, in talking to Cisco’s Brad Bechtold who runs the networking giant’s Oil and Gas Industry Transformation division estimates that there could be operational savings of up to 11% for the sector through implementing IoT technologies.

With estimates of the oil and gas industry’s size being around four trillion dollars a year, that represents an opportunity of over a hundred billion dollars a year in the one sector alone.

Selling the IoT

So it may be that the way to sell the Internet of Things into the industrial sector is to point out the operational savings available. Should the promise of substantial cost reductions be realised then it may even trigger a new wave of capital investment as businesses decide it’s easier to upgrade equipment than retrofit it.

The analytics and management aspect will turn out to be lucrative for many businesses as well, however the key to success is going to be demonstrating how these services add value for customers.

For the consumer market however the key probably lies in Joe Dada’s advice – keep it easy, convenient, safe and fun.

The tough world of IoT hardware startups

Starting a business making IoT hardware is a tough challenge

Yesterday Internet of Things startup Ninja Blocks announced it was shuttering its doors after three years of operations, two successful Kickstarter campaigns and three successful fundraising campaigns that netted $2.4 million.

Ninja blocks aimed to become the centre of the smarthome with its simple controllable device but, as many other startups have found out, the costs and complexities of designing, manufacturing and shipping hardware are not trivial.

Last year I spoke to Ninja Blocks and a similar IoT startup which also failed, Moore’s Cloud, about their opportunities and challenges. In the light of both companies failing they are worth watching again.

Daniel Friedman, CEO of Ninja Blocks outlined the company’s plans along with the limits of crowdfunding.

The CEO of Moore’s Cloud, Mark Pesce, had much stronger views on crowdfunding and its limits.

From the Moore’s Cloud and Ninja Blocks story it would be tempting to conclude that pure IoT hardware startup plays are doomed to failure, however the lessons of companies like Fitbit and the Pebble watch show otherwise.

A very good example of success is Spanish IoT company Libelium whose founder and CEO Alicia Asin told Decoding The New Economy two years ago how the company had started under the shadow of the 2009 economic crisis and thrived since.

The failure of Ninja Blocks and Moore’s Cloud really tell us we’re in the early days of the IoT and the business models and technologies are not certain. It’s also a commentary on the risks involved in startup businesses, as investor Dave McClure says, “not every one will be a unicorn.”

As the markets grow and the technologies evolve we’ll be seeing many more IoT startups, few will become billion dollar unicorns and many will fail. That’s the nature of new industries.

A series of weak links

Security continues to be a challenge for Internet of Things vendors

One of the ongoing discussions in the world of the Internet of Things are the security weaknesses in many devices that leave networks vulnerable to rogue devices or malicious hackers.

A good example of this is Craig Hockenberry’s post on his Furbo.org site on how bugs in Apple’s Bonjour software messes with networks.

While Apple won’t say what causes this issue – an ominous point in itself – Hockenberry surmises it’s due to older software in some devices that no longer have updates available, which is another problem facing the IoT.

On top of Hockenberry’s story, a piece in Threat Post reports the Open Smart Grid Protocol has serious security issues.

The writers of the package that’s installed on more than four million smart meters and similar devices worldwide decided to write their own encryption algorithm that has proved easy to break.

So the smart home which might feature both a slew of Apple devices and one of these exposed smart meters has a range of security holes that the occupier has no idea about. This hardly breeds confidence.

As the Internet of Things is rolled out, security is going to have to be at the front of developers’ and vendors’ minds. The stakes are too high for shoddy and ill thought out compromises or for vendors like Apple who rate secrecy over their customers’ security.

Microsoft builds its future

Microsoft makes a statement on its future

A billion devices running Windows 10 was the promise made by Microsoft at the company’s Build Conference in San Francisco yesterday.

The ambition is based upon delivering the system on devices ranging from desktop computers down to the embedded systems on Internet of Things devices.

As part of the drive to get onto the IoT, Microsoft also announced Windows 10 initiatives for the makers’ community with various programs for Arduino, Raspberry Pi and Intel’s Minnowboard.

At the same time the company announced how some software will soon be able to run on iPhones and Android devices with an extended Software Developers Kit.

While this makes Windows more attractive for developers who no longer have to develop different versions for the Microsoft product, it’s also an admission the company’s phone strategy has failed.

For Microsoft yesterday’s Build Conference was the opportunity for the company to show their vision of the market’s future that involves computers, mobile devices, the cloud and the Internet of Things.

Whether Microsoft is part of that future is the main concern of CEO Satya Nadella.

Hacking medical devices

Security researchers show how easy it is to hack a medical robot

Security experts have hacked a teleoperated surgical robot Security experts hack medical robot.

In a recently published paper, a group of academics showed how they had been able to change the instruction sequences, override commands or even take full control of the Raven II medical robot.

That such a lack of security isn’t in the least bit surprising is a sad commentary on the world of connected devices and the Internet of Things.

At the root of this problem is the software running this equipment has security added, at best, as an afterthought given the designers work from the assumption operators are in the room with the equipment,

If we’re going to connect these devices to the public internet then security has to be built into them from the beginning.

Whether we’re discussing remote medical equipment, driverless cars or the smart home, hardening and securing IoT devices is going to be of today’s industrial challenges.

Dashing to the shops with the internet of things

The Amazon Dash Button gives us a hint of how the Internet of Things will change shopping.

Amazon this week showed off their Dash Button, a device that lets brands set up a one press ordering system for customers.

The idea is that a brand, say a laundry detergent, gives out buttons that when pressed will automatically deliver washing powder or whatever product is preprogrammed into the device.

While its safe to say Amazon’s Dash button is a gimmick, it’s not hard to see washing machines, coffee makers or industrial equipment that comes preprogrammed to automatically order supplies when it detects reserves are running low.

So the Dash Button could be showing us how the Internet of Things will help us shop with smart devices automatically organising deliveries for us.

On it’s own the Amazon Dash Button won’t be changing the way we shop but the future of retail is going to be very different as the IoT rolls out.

How Google could be about to disrupt the telco industry

Is Google about to disrupt the global telecommunications industry?

Google are in talks with Hutchison Whampoa for the Hong Kong based conglomerate to provide global roaming for Google’s proposed mobile phone network reports the London Telegraph.

Hutchison, who recently agreed to buy UK operator O2 for £10.2 billion from Spain’s Telefonica, are one of the quiet global telecommunications players with services in East Asia, Europe and Australia. An international roaming agreement with Hutchison would give Google a substantial global headstart.

While the mobile phone angle is the obvious service for a global cellular network, another attraction for both Google and Hutchison is the Internet of Things. Being able to offer a worldwide machine to machine (M2M) data service fits very well into Google’s aspirations with products like Nest.

For the mobile phone operators, the prospect of Google entering their market can’t be comforting with the search engine giant having three times the stock market capitalisation of the world’s biggest telco, China Mobile.

It may well be however communications companies have little choice as the software companies start to take the telcos’ profits just as they have done with many other industries.

Should the story be true about Hutchison and Google being in talks it will probably be the start of a massive shift in the global communications industry and one that will see many national champions threatened.

Google’s global network ambitions could change the future of the Internet of Things industry.

Smart poles and smart cities

Smart street poles may well be the cornerstone of connected cities believes the Urban Software Institute’s Lutz Heuser

Are street poles the key to rolling out a smart city? Lutz Heuser, CTO of Urban Software Institute believes these are the easiest way to connect a community and roll out mobile and Internet of Things technologies across a town.

“For us it’s the perfect example of how infrastructure can change things very quickly,” Heuser told Decoding The New Economy at the AIIA Internet of Things summit in Canberra last week.

Heuser sees the street poles as an easy success for cities looking to connect services and assets with most towns and utility companies replacing poles on a regular basis which provides an opportunity to roll out smart technologies.

“If you put in some extras like communications, sensors and environmental monitors and all of a sudden you create a whole new ecosystem that helps the citizens and the environment.”

Heuser sees funding as another advantage in using street poles to rollout smarcity technologies as the energy savings in modern LED lights as providing enough incentives for municipalities to replace older infrastructure.

The key though is leadership, both in business and politics, this is essential in Heuser’s view in getting the best return for smartcity and IoT investments.

As technologies like smart parking meters and connected rubbish bins roll out and municipal staff like garbage collectors and enforcement offices need real time connectivity, cities increasingly are going to rely upon wireless services. The humble street pole may well turn out to be the answer to what is otherwise an expensive problem.

Rolling out the smartcity – the role of government and business

Both Government and businesses have a role in building smartcities

“It’s amazing what can be achieved when government is committed and prepared to partner with industry,” was the AIIA Internet of Things summit MC’s reaction to a presentation from Steve Leonard on Singapore’s quest to become a connected city today.

Leonard, the head of Singapore’s IDA, had laid how the nation had embarked on a smartcity project due to the pressures of increased population and an ageing society. The government sees technology as a way to deliver health services more effectively and use scarce resources more efficiently.

One of the areas Leonard cited was in traffic management where the city’s bureaucrats asked “how can we double the traffic on our roads without building anything new?”

The answer lies in smartcars and autonomous vehicles, Singapore has partnered with MIT to run a driverless car pilot on some of the city’s roads. Leonard points out that cars can travel closer together when run by computers rather than being driven by humans.

For governments traffic management is one of the easiest ways to introduce the internet of things into smart cities says Lutz Heuser, Chief Technology Officer of Germany’s Urban Software Institute.

Heuser worries that many cities are “sitting on the fence” when it comes to rolling out IoT and smartcity initiatives and sees “the humble lightpost” as being one of the ways technology can be rolled out into urban environment.

This echoes the Geek’s tour of Barcelona where street light poles are a key part of the city’s digital infrastructure, providing a base for sensors and the Wi-Fi connectivity needed for devices like intelligent rubbish bins and digital services.

One of the advantages of using intelligent, or at least half smart, lightpoles is that local governments are replacing them on a regular basis – around three quarters of Europe’s poles are more than twenty-five years old – which means they can be rolled out as part of a planned maintenance programs.

Having rolled out connected city initiatives like Barcelona’s smartbins or Singapore’s ‘fibre hydrants’ – fibre nodes around the city that government and emergency services can tap into when needed – local businesses can then leverage off that infrastructure to further improve the well being of citizens.

For governments, the rolling out of smartcity technologies is to deliver better services more efficiently. As Singapore and Barcelona have showing, by working with local businesses it becomes far easy for agencies to deliver real improvements in their communities.

How the Internet of Things could overtake the law

The internet of things is going to present challenges for governments and regulators.

Last March the Australian internet industry celebrated twenty years of commercial operations with the Rewind/Fast Forward conference that looked at the evolution of the online economy down under and its future.

Naturally the Internet of Things was an important part of the discussion looking at the internet’s future and one of the panels examined the effects of the IoT on industry and society.

During the session chairman of the Communications Alliance industry association, John Stanton, raised an important point about how the IoT creates problems for existing laws and the regulators as a wave of connected devices are released onto the market place.

The risks are varied, and Stanton’s list isn’t exhaustive with a few other aspects such as liability not explored while some of the issues he raises are a problem for other internet based services like cloud computing and social media.

Roaming rules

Having fought many regulatory battles over roaming charges and access between networks, it’s not surprising Stanton and the Communications Alliance would raise this as an issue.

Dealing with roaming devices will probably be a big challenge for mobile Machine to Machine (M2M) technologies, particularly in the logistics, airline and travel industries. We can expect some bitter billing battles between clients and their providers before regulators start to step in.

Number schemes

Again this is more an issue for mobile M2M consumers. Currently every SIM card has its own phone number once the service is activated. It may be that regulators have to revise their numbering schemes or allow providers to use alternative addressing methods to contact devices.

Data sovereignty

Where data lives is going to continue to be a vexed issue for cloud computing consumers, particularly given the varied laws between nations.

Short of an international treaty, it’s difficult to see how this problem is going to be resolved beyond companies learning to manage the risks.

Identity management

Data integrity is essential for the IoT and accurately determining the identity of individuals and devices is going to be a challenge for those designing systems.

Over time we can expect to see some elegant and clever solutions to identity management in the IoT however masquerading as a legitimate device will always be a way malicious actors will try to hack systems.

Privacy

For domestic users, the privacy of what remains in data stores is going to be a major concern as domestic devices and wearables gather greater amounts of personal information. We can expect laws to be tightened on the duties and obligations of those collecting the data.

Access Security

Who can do what with a networked device is another problem, should a malicious player or a defective component get onto the system, the damage they can do needs to be minimised. What constitutes unlawful access to a computer network and the penalties needs to be carefully thought out.

Spectrum allocation and cost

Governments around the world have been reaping the rewards of selling licenses to network operators. As the need for reliable but low data usage IoT networks grows, the economics of many of the existing licenses changes which could present challenges for both the operators and governments.

Access to low cost and low data access networks

Following on from the economics of M2M networks, the question of mandating slicing of scarce spectrum for IoT applications or reserving some frequencies becomes a question. How such licenses are granted will cause much friction and many headaches between regulators and operators.

Commercial value of information

How much data is worth will always be a problem in an economy where information is power and money. This though may turn out to be more subtle as information is only valuable in the eyes of the beholder.

Where information becomes particularly valuable is in financial markets and highly competitive sectors so we can see the IoT becoming part of insider trading and unfair competition actions. These will, by definition, be complex.

Like any new set of technologies the internet of things raises a whole new range of legal issues as society adapts to new ways of doing business and communicating. What we’re going to see is a period of experimentation with laws as we try to figure out how the IoT fits into society.

The high cost of distrust

A lack of trust in data is going to cost the world’s economy over a trillion dollars forecast a Cisco panel

A lack of trust in technology’s security could be costing the global economy over a trillion dollars a panel at the Australian Cisco Live in Melbourne heard yesterday.

The panel “how do we create trust?” featured some of Cisco’s executives including John Stewart, the company’s Security and Trust lead, along with Mike Burgess, Telstra’s Chief Information Security Officer and Gary Blair, the CEO of the Australian Cyber Security Research Institute.

Blair sees trust in technology being split into two aspects; “do I as an individual trust an organisation to keep my data secure; safe from harm, safe from breaches and so forth?” He asks, “the second is will they be transparent in using my data and will I have control of my data.”

In turn Stewart sees security as being a big data problem rather than rules, patches and security software; “data driven security is the way forward.” He states, “we are constantly studying data to find out what our current risk profile is, what situations are we facing and what hacks we are facing.”

This was the thrust of last year’s Splunk conference where the CISO of NASDAQ, Mark Graff, described how data analytics were now the front line of information security as threats are so diverse and systems so complex that it’s necessary to watch for abnormal activity rather than try to build fortresses.

The stakes are high for both individual businesses and the economy as technology is now embedded in almost every activity.

“If you suddenly lack confidence in going to online sites, what would happen?” Asks Stewart. “You start using the phone, you go into the bank branch to check your account.”

“We have to get many of these things correct, because going backwards takes us to a place where we don’t know how to get back to.”

Gary Blair described how the Boston Consulting Group forecast digital economy would be worth between 1.5 and 2.5 trillion dollars across the G20 economies by 2016.

“The difference between the two numbers was trust. That’s how large a problem is in economic terms.”

As we move into the internet of things, that trust is going to extend to the integrity of the sensors telling us the state of our crops, transport and energy systems.

The stakes are only going to get higher and the issues more complex which in turn is going to demand well designed robust systems to retain the trust of businesses and users.