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Where is the Internet of Things heading in 2014?

More use cases for the Internet of Things in enterprises will emerge next year
More vehicles will be connected in 2014 and use technology such as Holden's MyLink in car entertainment system. Source: Holden

More vehicles will be connected in 2014 and use technology such as Holden's MyLink in car entertainment system. Source: Holden

Analysts have predicted that the Internet of Things will continue to grow in 2014, and more enterprises will start to realise the potential benefits.

Kristian Steenstrup, Gartner Fellow, says the cost of devices and connectivity will gradually decrease and more use cases for the Internet of Things in enterprises will emerge next year.

He says there will be more near-term investment in the Internet of Things for equipment in mining, engineering and utility industries, in particular.

“Companies like Rio Tinto and BHP are starting to automate their mining environments using driverless trains, autonomous trucks. We are also seeing power utilities deploying smart grid technology,” Steenstrup says.

He says the realisation of benefits will come more to light in these industries in 2014, which will spur on more take up of technology. Some of the benefits include the ability to reduce costs by monitoring usage of equipment more accurately, reduce risk by being able to prevent equipment failures, and collect and analyse richer data sets to “work your strategies much better than if you are flying blind”.

“In those kinds of businesses, you can’t go and invent a new version of iron ore, you can’t go and innovate a new electron – you are stuck with what you have got. So it’s how you do it that becomes more important to you. The take up in industry is very high because it leads to profitability.”

Transportation is another area where the Internet of Things is going to take off next year, Steenstrup adds.

“Being able to locate your assets, whether they be trains, cars, buses or planes and being able to determine their health and condition, the Internet of Things will allow a much more current view of what the equipment is up to,” he says. “If you look at what taxis are doing with their automated dispatch – those are examples the Internet of Things.”

Graham Barr, research director, telecommunications at IDC, says in-car technologies, such as fitted SIM cards that communicate back to insurance companies on how a car is being driven and where and when an accident has occurred, will continue to emerge next year.

Smart buildings is another example where the Internet of Things will continue to evolve next year. Steenstrup says there will be a growth in technologies used to help monitor a building’s power and water consumption, occupancy, temperature, etc.

Tim Sheedy, Forrester analyst, has a different view to Steenstrup and Barr. He says 2014 will be the year that “the Internet of Things is really going to get personal”, where there are more things a consumer connects to as oppose to things an enterprise connects to.

“You are seeing connectivity being put into TVs already, but it’s also going into fridges, microwaves, ovens, washing machines, light bulbs, smoke detectors, etc. There are a wealth of devices that are going into the home, giving us information and helping us control our environment and our lives more effectively.”

Rodney Gedda, Telsyte analyst, forecasts machine to machine mobile technology will grow from 1.3 million connections in 2013 to more than 3 million in 2017. He sees increased adoption of these technologies will mostly be in mining and engineering.

Nicole McCormick, Ovum analyst, expects Telstra to launch its LTE M2M service offer in 2014.

“However, I don’t see 2014 as being the ‘year of LTE M2M’, as while there is initial interest in high bandwidth M2M services over LTE, actual deployment of these services will be limited in 2014. LTE M2M will expand faster in 2015.”

The Internet of Things may bring about many opportunities in 2014 for enterprises, but it doesn’t come without its challenges. Steenstrup says there is a risk of companies losing control of their assets as more and more tiny things become connected online.

He says for industrial-type businesses, where the Internet of Things will be more visible, the CIO and head of the engineering or operational equipment team will need to work closely together to ensure assets are properly managed.

“Engineers are used to equipment and operations but they are not used to all the software, portfolio management and vice versa. As you move to hundreds of these technologies being deployed somewhere you need to think about how you are going to manage that portfolio, and not everybody has thought that through.

“The CIO is generally assumed to be the go to person for technology deployments. However, most of what we are talking about here is actually going to be initiated by engineers, operations people who traditionally are the ones who use the equipment.

"You are actually going to need the experience and knowledge of both because you are combining physical equipment with online technology and therefore it’s going to have to be a combination of IT and engineering.”

Another challenge that organisations will start to address next year is the consolidation of technologies and systems to create an Internet of Things “ecosystem”, says Barr. We could see a greater set of standards emerge next year as the “building blocks” to making that ecosystem work, he says.

The standards would allow software applications, data analytics and sensors to be pulled together so that they can communicate between them over a vast range of devices and equipment.

Defining clear revenue models is another issue companies will start to deal with next year, Barr says. “How does everyone make a dollar out of this? If you have billions of devices being put onto a network, all of which generate very tiny amounts of revenue, you need very efficient provisioning processes,” he says.

“One of the sidelines to this, which is outside the Internet of Things, is the whole development of software-defined networks where traditional hardware-based networking devices at the core of the network are replaced by devices running on more standardised, virtualized hardware that's controlled more by software, so that the provisioning process is done in software from a remote control network operations centre and can be done very efficiently with very low cost.

“If we don’t have those things in place then bringing on board billions of little sensors all over the place is going to be extremely expensive and not productive.”

Wissam Raffoul, IBRS advisor, says the Internet of Things is still only considered a hype among many businesses and momentum won’t be built before 2020.

“The Internet of Things won’t be a critical issue for CIOs during the next three years because it is unlikely to make IT services any better, quicker or cheaper. The exception to this trend would be any IT organisation that handles a large number of machines," Raffoul says.

Joe Sweeney, IBRS advisor, also agrees the Internet of Things is just a hype. However, the vast amounts of data it would generate could potentially be used to influence decision making at a societal level.

“For example, the GPS enabled phone in your pocket, generating vast amounts of data relating to the ebb and flow of society. While we can currently see the impact of this type data collection at the individual level, we are just starting to glimpse the promise at the societal level.

"Understanding the dynamics of flow of people and the resources they require within cities has the potential to impact civic policies and design."

Follow Rebecca Merrett on Twitter: @Rebecca_Merrett

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More about: BHP, Gartner, IBRS, IDC, Ovum, Rio, Smart, Telstra, Telsyte, Transportation
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