’70-80 Per cent IoT Proofs of Concept Can’t Showcase What They Actually Intend To Do’

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India is betting big on the IoT as the next big business driver across all verticals and industries. To tap this market, solution providers are seeking insights that would help them understand the opportunities, challenges and necessities in the IoT landscape. Benoy CS, Director, Digital Transformation Practice, Frost & Sullivan, in conversation with Rahul Chopra of Electronicsforu.com Network, shares detailed insights on the current state of IoT adoption in the country and how Frost & Sullivan is helping IoT solution providers with their ecosystem analyses and consultation services.  

Q) We generally hear that IoT is just a hype/buzzword with nothing new in it. What is your take on this notion?

The potential of IoT is undeniably very high. The value which IoT can bring to businesses is also very high. I agree that it is being hyped to an extent that the revenue which IoT companies or business is generating seems relatively low because IoT solutions has not reached its full potential. There are a lot of challenges associated with IoT.  Most of the IoT projects globally, particularly in India, are in the Proof of Concept (PoC) stage where we are trying to make things work and show value to clients. Because of its existing challenges and low revenue generation, the notion of IoT still being a buzzword comes in.

However, I do not see it as a hype. I rather see it as an emerging technology which will bring about a lot of value addition to businesses. The use cases of IoT are also very profound and sound. The key challenge lies in the implementation stage in terms of how you can utilise it since it is a technology with which multiple ecosystem and industries are converging. In fact, there are many sub-technologies also, which when combined with IoT can do wonders. Hence, it is taking some time to evolve, and this is where the industry is also currently struggling to catch up with.

Q) Is it the overall ecosystem, or the technology, or is it the customers that need to mature before we see things happening and start realising the benefits of IoT?

It’s a combination of all the three. Technology is not a limiting factor though. It is the other supporting systems that need attention, including the customers, who should be made aware about the benefits of IoT. There are multiple components in IoT.

IoT is typically a five-pillar structure. It will have an object, which in itself is a huge industry. Objects can be broken down into chipsets, devices (any devices like wearable, connected cars, etc.), sensors, modules and more. There are companies that are specialised in connecting these, which in turn again, forms a huge industry where telecom companies play a big role. Then there is a platform followed by application. Hence, many stakeholders need to come together in order to make IoT happen and this is where the challenge is.

IoT is not a typical company story. It is convergence of multiple industries where standardisation becomes a big challenge, since everybody uses different standards. Coming to a common platform where everybody can talk to each other is something that is slowly evolving. Hence, the biggest challenge lies more with application and deriving use cases out of it.

Q) So, does that mean in this typical structure, firms which would position themselves as master partnering companies, will be the best bet to handle these challenges?

Whether partnering companies are the type of organisations which are going to help solve this challenge is a big question. IoT and the partner ecosystem goes hand-in-hand. Hence, having a good partner ecosystem will be a differentiating factor that will make one successful. Companies like these are also struggling to make money since for the customisation, the attention that is required cannot be done from a large organisation perspective. This is because it won’t be economical for them to go to these small-scale deployments that come their way. Everyone has to move towards a platform-based approach for the industry to mature. Customers and organisations can use the building blocks and stitch together their problems which will help enhance the ecosystem further.

“In the next 3-4 years, India is going to witness a new wave of innovations and IoT is going to be one of the key industries which is going to be touched upon by this wave of innovations.”

Q) Anything to learn from the past about how this will evolve and what kind of organisations will be involved?

Startups are coming up with new solutions and set of customers. Once they have solved the problem, it will take a lot of time to replicate similar set of customers. And that is where the development is happening. It is not that development is always happening at top level companies. Small organisations are also coming up with solutions to cater to some small existing problem and they are gradually making it successful. I believe IoT business is a good base for startup companies to flourish since they can be more flexible and adaptable. Once they have created a successful solution, they can replicate it with some similar challenges.

Apart from this, the platform vendors, application vendors, telcos, etc., are also striving to enable IoT and get some share out of it. The problem with IoT is more at the ground level than at the top level. 70 – 80 per cent proofs of concept (PoCs) can’t showcase what they actually intend to do due to various practical problems that come up while implementing IoT solutions (for example device, connectivity, standardisation, etc.)

Q) With startups catering to clients of different types, would the traditional IT and technology companies start feeling the heat at some stage?

I don’t think so. The small startup companies are trying to solve some problems. The company which actually develops a solution will not make money by just deploying it in one or two cases. This is why many of the large companies are not actually making money out of it. Once they deploy it, the words spread across the industry and they deploy it for comparatively large number of companies. So, keeping this in mind, the small companies can never be a threat to the large ERP firms.

The ERP firms will definitely exist and expand their product services and enable many of their processes through IoT technology and do their bit to strengthen the ecosystem. In the process, they will earn some revenue and grow in separate verticals and geographies. I believe a lot of new type of companies are going to come in gradually because the IoT landscape is vast. Once standardisation comes in, bigger organisations will have an added advantage since everything will be applied on a large scale.

Q) Would you advise a CEO of an ERP company to invest in developing modules for IoT integration?

Yes, they should invest in it. There are many IoT technologies which would help you solve many of your day-to-day problems. For example, there are lots of data which is getting fed into the entire ERP system and then manually taken out for different uses. IoT can automate the process right at the ground level. So definitely, IoT is going to excel. If an ERP system does not have an IoT plug-in, it will gradually become obsolete in many places. Hence, every ERP company needs to adopt IoT and the change has already started.

Q) With respect to India-specific use cases, any particular verticals or segments that is seeing a higher adoption?

One that is really seeing a difference is the logistics and supply chain side. That is where IoT is getting deployed for applications like asset tracking and vehicle tracking, which is getting a lot of momentum. The use cases are much higher in number, and that is why they are the early adopters of IoT. Other sectors like agriculture is using IoT in different forms and in different applications. Electronic meter reading/smart meter deployment is gradually transferring manual reading to sensor-based systems. So, this is another domain where IoT is getting implemented in a huge scale.

Q) According to you, what are the top 3 supporting technologies that are shaping the IoT?

Analytics and cloud are the greatest supporting elements of the IoT, since most of the value in IoT is derived from analytics. AI and machine learning are again, extensions of most of the analytics cases. It is a key technology which is enabling and supporting the value which an IoT can create for a customer.

Q) How do you think the edge vs cloud preference will progress, since a lot of people tend to do things on the edge at present?

If you look at the history of adoption of technologies, it has always been a pendulum between edge and the cloud. Both have their own advantages and disadvantages. Eventually a combination of the two (depending on the application) is likely to evolve.

Q) How strong is the state of security available for IoT solutions today?
Most of the security applications and solutions were originally focused on information technology (IT) and data security. Operational technology (OT) was always a closed ecosystem, and consequently, had limited security traceback. But now, IoT is considered to be a combination of IT and OT and suddenly OT is taking a higher stake. Recently, a lot of security attacks happened, and this has made companies aware that there is a big loophole that needs to be addressed.

The industry has finally reached a stage where the awareness level is pretty high on IoT security and its importance. This awareness will enable the technology to fall in line. Security solutions companies have started looking at the importance of security in IoT and that is indeed a very good sign. There are many advanced security technologies that are getting developed. Also, IoT security as a subject is gaining high importance with every passing day.

Q) What’s your thought on the other related buzzword ‘smart cities’?
There has been a lot of talk about the 100 smart cities project, but the ground reality is not very heartening. We have seen some development in areas like surveillance and healthcare, but the overall smart cities development is not very great and is in preliminary stages presently. Decision in terms of funds, clarity in policies, etc. needs to be looked upon. Also municipal bodies, governments and the industry need to work together to achieve the target.

Q) How do you see India’s technology industry developing its own branded products in the IoT space?

The startup ecosystem in the country is actually doing good. In the last 4-5 years, there has been a lot of focus on innovations in the country. Keeping this in mind, in the next 3-4 years India is going to witness a new wave of innovations and IoT is going to be one of the key industries which is going to be touched upon by this wave of innovations.

Q) How is the government setting up local infrastructure for the IoT to come into India? Are you satisfied with it?

The govt has released some papers to encourage work on IoT, and that is what we can expect from the government’s side. They are trying to come up with some incubation centres around IoT. We are quite satisfied with what the government is doing. There is no lack of support from the government in this aspect. However, the industry needs to mature further.

Q) What services does Frost & Sullivan provide to those businesses who want to get into IoT or are already into IoT?

We basically help companies in planning their business better with a clearer future prospect. So, for any company who wants to get into the IoT field, we help them create and utilise the opportunities they have in the market, by showing them what is the ecosystem like and how they can grow in the market. Similarly, we create a detailed business plan for them so that they can tap the market and gradually grow into the business. We provide services across the entire value chain of IoT on how they can increase their business and flourish gradually. We are offering research and advisory services to IoT players to help them grow in the IoT space.

 

Longjam Dineshwori

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