Internet of Things: A New Paradigm for a New World
by Dr. Gopala
Lead Enterprise Architect
Imagine a world where billions of IP-connected objects are sensing, communicating and sharing information. Imagine these objects regularly collecting data, analyzing it and initiating action — unleashing a new wealth of intelligence for planning, management and decision making. If you can envision this place, you’ve understood the concept called Internet of Things (IoT).
The term “IoT” was first coined in 1999, by a member of the Radio Frequency Identification (RFID) development community. Since then, the explosive growth of mobile devices and embedded communication have put IoT in the spotlight — not only in the RFID technology community, but in almost every circle of modern living.
IoT refers to everyday objects that are readable, recognizable, locatable, addressable, and/or controllable via the Internet — irrespective of the communication means — whether it’s RFID, wireless LAN or wide-area networks. With IoT, “things” can be:
- Location (of objects)
- Time Information (of objects)
- Condition (of objects)
IoT changes not only the definition of “things” but their function and application, because objects from the “real” world can now seamlessly integrate with the “virtual” world, enabling anytime, anywhere connectivity.
With more physical objects and smart devices connected in the IoT landscape, the impact and value of IoT on our daily lives is quickly becoming immeasurable. At the simplest level, people can make better decisions such as taking the best routes to work or choosing their favorite restaurants. New services are emerging for consumers such as pay-as-you-use services, and societal challenges can be easily met, for example, making remote health monitoring for elderly patients a reality.
For enterprises, IoT provides range of tangible business benefits — from improved management and tracking of assets and products, to new business models, operational efficiencies and cost savings achieved through optimized equipment and resource usage.
Across industry verticals, IoT presents an abundance of opportunities for innovation. With real-time data and potentially cross-domain data sharing, new business models can be created. And IoT can address both industrial and consumer needs. For example, the potential of IoT as a service enables new markets and value chains to build up a competitive edge. In the future, cognitive applications or systems in the context of IoT will play an even larger role.
Gartner forecasts that the number of connected “things” will reach 20.8 billion by 2020. That number is massive, but the potential impacts on the ways we live and do business are even more mind-boggling. IoT will change every aspect of our world.
IoT as Consumer Advocate
In the “age of the empowered customer,” IoT can provide customers with a seamless interaction and experience. The benefits are enormous:
- Control and personalized experiences based on individual preferences and lifestyle
- Increased convenience
- Significant cost benefits — for example, energy savings
- Better quality of life and safety
IoT as Industry Player
IoT’s diversified applications make it a game-changer for every industry:
- Retail: IoT provides personalized customer experiences that increase online traffic and customer engagement. It can deliver data-driven insights for more control over a retail operation and integrate every aspect, making the entire system work seamlessly
- Transportation and Logistics: IoT creates intelligent transportation systems that manage traffic flow and reduce congestion. It makes fleet management of vehicles possible, with operational data including vehicle diagnostics, maintenance and fuel economy. Finally, IoT can transform individual vehicles into smart “things” that react in real-time, creating safer traffic systems
- Manufacturing: IoT automates factories and processes, allowing predictive maintenance and higher product yields
- Government: IoT enables convergence of data sources on shared networks, establishing connected governments and better coordination between agencies. It can also facilitate quicker response to emergencies and disasters
- Agriculture: IoT understands and predicts long-term weather patterns, enabling farmers to plant better, stronger crops.
- Healthcare: IoT shifts healthcare from “services on the premises” to remote self-monitoring, giving patients greater freedom and independence while freeing up hospital equipment for emergencies
- Power: IoT enables smart grid systems that monitor and manage the entire life cycle of power generation, transmission, distribution and consumption. It empowers people to manage and track their own consumption, creating huge savings for both consumers and power companies as providers can better provision power at peak periods
- Supply chain: IoT increases automation, creating a dynamic production and transportation network that better manages assets, improving overall efficiency of the chain
- Banking: IoT tracks and analyzes consumer behaviors, helping banks to engage and deliver personalized experiences, context-aware offers and rewards. IoT also enables banks to better manage risks, reduce costs and tailor products and services to achieve operational efficiency. It will also change the retail banking experience with “next generation” branches that sense, identify and recognize customers
- Insurance: IoT provides insurers with better data so they can adjust price coverage with precision, and manage risks. It will provide consumers with usage based insurance to address individual needs
- Investment and Wealth: IoT will help investment companies tailor solutions based on data. Investment and asset allocation decisions will be based on personal behaviors, preferences and location considerations
One caveat to IoT is that all industries will need to address issues like security, privacy, hardware and software compatibility, synchronization, wired and wireless infrastructures, data mining, data analysis, and more. These steps are crucial to helping IoT’s meet its full potential.
Stakeholders include those people who drive the conception and development of IoT systems in an organization. It’s important to identify these stakeholders and engage them early in the process. Some of the various stakeholders of IoT are:
- Users, classified as Transporters, Distributors etc.
- Network Providers
- Service Providers
- Privacy Advocates
- Government Agencies
- Regulatory Agencies
- Standard Developing Organizations
- Academic Institutions
- Research Labs
- Testing Vendors
- Certification Vendors
IoT as Global Player
IoT’s benefits to industries and companies will change the ways things are done throughout the world. The global impacts of IoT are likely to be:
- Operational efficiency achieved through automation, increasing overall standards of quality and productivity
- Innovative products and services including personalized experiences, driven by improved customer data. Manufacturers and OEM’s will engage with customers in new ways and build better relationships.
- Predictive maintenance of assets and equipment that will help industries save maintenance and repair costs. This will also increase factory production as outages are avoided.
- New revenue opportunities for industries through digital and innovation
- New business models such as pay-per-use, enhanced value chains and dynamically competitive pricing options and models
- Increased safety, security and compliance for businesses, industries and employees
- Continuous optimization and improvement of processes, delivering increasingly superior customer experiences
- Optimal use of resources including employees, changing the way many jobs are performed
- Increased consumer engagement for cross-selling and up-selling of new products and services
An Ultimate “Future State” Architecture
For IoT to reach and deliver its full potential, integration is key, and this has been a challenge to most enterprises. The aim is to deliver contextual information to consumers and provide a superior, seamless customer experience across channels. To do this, the entire process and experience must be underpinned by adaptive architecture.
Most enterprises will need to re-think and build solutions that are simpler, adaptive, intelligent, secure and more appropriate. A true IoT solution must enable devices, things, services and sensors within the eco-system to be:
- Autonomous and able to operate and manage independently. Services within an eco-system must be “self-aware” and able to detect, predict and self-correct system or service failures. Things or devices should also be able to make decisions on their own, decentralizing decision making
- Open, interoperable and heterogeneous as well as secure and standard, to connect and integrate anywhere, inside and outside the organization
- Contextual and able to capture the context that delivers a personalized experience
- Secure at every level and layer of architecture right from the start, as connected devices and things will generate lots of data
An IoT Reference Architecture
Typically, architects spend a lot of time researching, investigating, defining, and re-arguing architectural decisions. It can be like reinventing the wheel as their colleagues or even peers in other organizations invest significant time and effort doing the same. This prevents organizations from learning from their own experiences and applying that knowledge for increased effectiveness.
As IoT demands new architecture, there’s a deep need for a Reference architecture that ensures best practices. An IoT Reference architecture can provide missing architectural information in advance, so that team members maintain consistent architectural best practices. And at an abstract level, an IoT Reference architecture can aid an organization by:
- Serving as a communication channel
- Helping business owners to accommodate their strategies, vision, objectives, and principles
- Reducing IT spending through increasing functionality, availability and scalability
- Providing a real-time integration model that reduces the latency of data updates
- Defining a single source of information
- Providing a clear view on how to manage information and security
- Defining the policy around data ownership, product boundaries, and other issues
At its best, a Reference architecture is a compass, helping organizations to build solutions that deliver them safely into the new world that IoT is creating.
Over the next series of blogs, we’ll delve into the details of an IoT Reference architecture covering foundational and industry-focused capabilities, architecture principles and standards, and reference models and best practices that ensure aligned investments are achieve the greatest likelihood of success in both the near and long term.