Internet of Things (IoT) may be at the top of the hype cycle but it's hard to imagine that the growth in connected 'Things' won't create significant new value. Twenty-five billion objects will be linked together via the Internet of Things (IoT) by 2020 says Gartner Group1. IDC predicts the global IoT market will grow to $1.7 trillion by 20202. McKinsey Global Institute puts the economic value of IoT in business-to-business settings like smart factories at $3.9 trillion by 20253.
While these projections vary in precision and assumption, we can be confident that the growth of connected things within the next five to ten years will be very significant. That's because the fundamental building blocks are in place and reaching the right cost points: powerful low-cost electronics, ubiquitous (well not really but better) mobile network connectivity, readily available cloud computing.
IoT Value Chain – Data Everywhere
There are more and more stories of how connected devices create new value and the examples and explanations are biased by our starting point and capabilities. For example, if you come from a cloud background you tend to imagine a world of Things all connected to the Cloud and finding new opportunity in that Big Data set. If you come from a world of machine makers, then you tend to imagine a world where you can see all your machines and proactively maintain them and create new maintenance opportunities.
I find the old management adage "You can't improve what you can't measure" a good lens to look at IoT. Those familiar with that phrase are probably thinking incremental improvement and Lean processes etc., but that's not the lens. The things in IoT are all about sensing and measuring something – that's what most of the Things do. Sometimes that measurement is simple presence or absence, or the perturbations on a pressure signal, or the flow of people around a mall.
One way or another we start with some kind of measurement and that measurement could come from a single sensor (e.g. the temperature of a bearing) or the fusion of data from multiple sensors (e.g. processing the output of cameras, door sensors, cell phone locations etc. to get of measure of people moving around a mall). It all starts with measuring something, and as all engineers know: once you start measuring you soon come up with more things to measure. The first step in creating value from IoT is converting data into meaningful measurements – turning
Data Everywhere Into Measurement of Everything
Measurement of everything sounds rather Orwellian and grand, but the 'Everything' is limited by context. For that machine maker it's still about the machine, but maybe taking measurement one step further and using data from multiple sensors (and machines) to infer measurements that might otherwise be too costly or difficult. In other words part of the value creation opportunity of IoT is being able to measure through the combination of data from many Things, and having the imagination to see how we can extract new measurements from a collection of Things.
Then comes the improvement part of the old adage. Improvement is about making something better and making something better often creates value. I hesitate a bit because as all engineers experience, making a product better doesn't always lead to more success. The improvement has to be valued by the purchaser. But having measured something we can probably figure out how to make changes that will create value by improving some measurement.
The new and interesting thing about IoT is the way we can use the Things data to make improvements and create value at many different levels. We, and many others, have seen this in our factories.
As we collect a richer measurement set from a machine we start to see ways of improving its performance, creating value at a machine level. But we also get a richer data set to look at a collection of machines and schedule their use and maintenance in a more predictable way with less disruption to production. More interestingly we get to see patterns in their use that allow us to change the way we plan production and be more flexible than we had previously imagined.
So we create value at an Enterprise level. IoT in healthcare has similar multiple levels of value creation. We can improve the health of an individual with more measurement and advice, but we can also look to see trends in a population that make the delivery of healthcare more efficient. The exciting part about Data Everywhere is the multitude of ways we can use that data to create value for individuals, clusters of people, cities etc. That's what makes IoT so interesting.
One big learning for us is that if you put the Things in place, or make more use of the Things already there, and make measurements you will find something that creates value. We've had many conversations internally where we believed we already had all the data and were getting all the value and there would be no value gained from adding new Things – "we're already doing that". So far, we've found that we weren't "already doing that". This is the challenge of IoT: it's sometimes hard to see the value until you do it, but we've learned that when you do it, the value is there.
What's Important In The 'Things'
You can't create the value without the Things and in many cases that will need new Things to be installed. Power, Sensors and Connectivity are key challenges for these new Things and it's an exciting time to be the manufacturer of the things in the Things in addition to creating value from Things.
Power Before anything can be connected, yes, it needs to be powered. There's interesting new developments in energy harvesting as well as the wireless delivery of power. Power is fundamental. The base criterion is to enable persistent power delivery that fits the form, function, and environment of the application that means robust and reliable connections whether to a coin cell or the grid.
As with so many components the underlying technology is often more complex than it first appears. An alternative to connectors, contactless power, is liberating design engineers to realize new possibilities for mechanical motion and place sensors where they need to be with reliable power delivery.
Sensors are at the heart of IoT and the idea of measuring more is embodied in the new generations of combo sensors – one sensor product that captures multiple parameters. If you are going to measure one thing you might as well measure a few other related parameters and increase the depth of your data – putting there in the first place is a lot better than adding later after you have realized it would be beneficial to have those other measurements. Part of the challenge of IoT is that data we often think contains no value does have value when merged with other data – in other words collect as much as you can.
Connectivity This is of course a given for IoT, and the cost of connectivity at the network and component level is continuing to get more affordable. The connectivity has to be efficient, especially when power is limited and we've seen a number of examples where the connecting part of connectivity – the antenna - has been left as an afterthought in the design and greatly compromised the performance, and promise, of the Thing.
Packaging Most of the Things are out in the world (including on us) and that makes packaging more of a challenge. There are design challenges aplenty in protecting the sensors, electronics and antenna from the outside world while at the same time not compromising the performance of the connection or the performance of the sensor. Plus of course it probably needs to be small and if it's visible have some good looks.
When these things are done well the resulting Thing will be:
Reliable – Things Cannot Fail
While there is some place for a proliferation of Things so that one failure can be ignored and replaced in due course, there are many applications where failure of the Thing is not an option. In personal safety and transportation applications the stakes could not higher. Modeling and simulation of the environment is a critical capability for good Thing design. (Interestingly the technical forces that make a world of Things affordable are also making high performance computing affordable to do the simulations).
Small, Multifunction, And Efficient
The more successful we are at creating small, multifunction, efficient Things then the more application there will be of Things. It's a positive feedback.
The last remaining need is the value of IoT comes from collecting multiple data points so you have a need for interoperability. Network connections need some degree of standardization to get the data from the Things and manage them, but protocol conversion, data conversion, discovery are all topics that contribute to the success of creating IoT value and with the declining cost of computing power are becoming more affordable rather than easier.
A New Way Of Working
There's an interesting parallel between IoT value creation and engineering. Creating products is always a team sport. Companies have to work within a broader ecosystem of partners. Multiple disciplines are required from mechanical, electrical, and materials engineering. Co-creating and collaborating with experts outside your organization is key to accelerated innovation in the same that accelerated value is created from IoT by analyzing the data from many things. Every time we design a Thing we often benefit from the collaborations of many engineers on open source projects. Collaboration accelerates value creation in Innovation and IoT. Collaborating devices is a parallel to collaborating people.
About the Author
Rob Shaddock is Executive Vice President & Chief Technology Officer at TE Connectivity. Mr. Shaddock helps set the global engineering vision for the Company and works closely with business unit and technology leaders to drive all aspects of innovation, development and delivery of advanced connectivity solutions for TE customers worldwide. Mr. Shaddock also leads the TE Connectivity Engineering Council, which guides the company's overall technology strategy, product development processes and development of the technology community. He has a Bachelor's degree in Engineering Science from the University of Oxford, UK.