The first experience many communications service providers have with the Internet of Things (IoT) is in home monitoring and automation services, but it’s the business market, not the residential market, that represents some of the biggest opportunities.
The Internet of Things is big enough to encompass things like fitness monitors and flying drone cameras you control with your smartphone, but that’s far from the only thing that people were thinking about when they decided to rename the machine-to-machine (M2M) business.
They were thinking about vast numbers of items – everything from simple sensors to complex machines – in regular contact via the Internet, all subject to command and control. Many of those applications, and therefore many of the biggest opportunities in the IoT market, will be outside the consumer sphere.
Rio de Janeiro had Cisco, IBM, and Samsung equip its streets with sensors and monitors, which it uses for traffic monitoring and control. The city reports that it has sped its emergency response by 20 percent.
Russian petroleum company Lukoil wanted to increase the production of oil and exports from its oil terminal in the Timan-Pechora basin in the Arctic. The company contracted with Emerson Process Management to install 700 instruments to detect, diagnose, and measure onshore, offshore, and underwater pipeline systems to help it monitor both environmental conditions and oil production systems to help it achieve its goals.
BC Hydro in Canada installed about 1.8 million smart meters. The company can monitor the meters and update their firmware remotely. The company claims to have reduced theft by 75 percent, and to have saved $330 million in meter reading and $224 million in self-service tools. The systems were set up by Cisco, Itron, Cap Gemini, and Accenture. (All three examples were discussed at Cisco’s Internet of Things World Forum in November.)
That it’s possible to create such disparate systems is encouraging, but the overall market is still in its infancy.
One of the biggest IoT initiatives is the U.S. Smart Grid program, now formally in its fifth year.
Homes across the country are studded with smart power meters – at least 46 million of them at the end of 2013, on the way to an estimated 65 million at the end of 2015. Utilities are saving some money and seeing some efficiencies associated directly with reading and monitoring those meters.
The full promise of installing all those meters is nowhere near being realized yet, however. The vision was to have smart appliances too – washers and dryers and dishwashers that the people could load and set to turn on at those points in the day (or, more likely, in the middle of the night) when electrical power rates were lower. Smart versions of those and other appliances are lacking.
The system also requires utilities to offer dynamic pricing, and many consumers and public utility commissions are just not ready for that, The New York Times recently reported (subscription required).
Also, while some utilities and other companies that would need to provide dynamic pricing for IoT deployments have the back-office systems that can support millions of connected devices and flexible billing solutions at the same time (e.g., Oklahoma Gas & Electric), many, many more still do not.
Some vendors have developed systems that can support IoT deployments, but these are not yet widely deployed (see Cycle30 INTERVIEW).
The power industry is considering several flexible billing options, including time-of-use (TOU) rates, critical peak pricing (CPP), critical peak rebates (CPR), and variable peak pricing (VPP). Broadband service providers will be familiar with several different pricing models, some that include flexible pricing based on any number of variables. Other industries will have yet other pricing approaches appropriate for their specific needs.
Around the world, federal, state and local governments are clamoring for high-speed Internet connectivity. They want high-speed broadband for its own sake, as broadband infrastructure is a fundamental requirement for growing businesses, but they also want it to support IoT applications. An increasing number of businesses will come to rely on IoT applications, but so do government agencies.
The city of Chattanooga, Tennessee, has its own gigabit network up and running, while the Kentucky just announced a public-private project to build a high-speed backbone that will reach all corners of the state.
Arqiva and SigFox in December began building in the United Kingdom the first installations of what they intend to expand into a global IoT network using the former’s broadcast, mobile, and satellite services, and the latter’s cellular network dedicated specifically to IoT applications.
The two plan to establish connectivity in ten of the UK’s largest cities within 12 months; as of December 2014 sites in each of the ten target cities have gone live, connecting them to the SigFox network. The ten cities are Birmingham, Bristol, Edinburgh, Glasgow, Leeds, Leicester, Liverpool, London, Manchester, Sheffield.
Arqiva’s managing director of smart metering and machine-to-machine solutions Wendy McMillan said the initial concept is to weave together street-level Wi-Fi with smart city and intelligent building applications. Possibilities include smart parking and waste level monitoring, and connected smoke alarms.
One of the first sites live in London is in the Royal Borough of Greenwich. Greenwich announced recently it will host the U.K. pilot introduction of driverless cars.
Greenwich Councillor Denise Hyland, Leader of the Royal Borough of Greenwich, said, “Greenwich recognises that all the UK’s leading cities are engaged in a global competition and that cities with a clear vision for the digital economy will be in a stronger position. This kind of technology will bring benefits to all our resident’s right across the whole of our borough and in time will really help enhance how we deliver services. This technology will help cities tackle economic and social challenges and will help solves issues like traffic congestion as well as enhancing security, and making heating and lighting more efficient.”