Internet of Things: A quiet revolution gathers pace

by Wayne Scott, 05 Dec 2013Podcasts
Internet of Things: A quiet revolution gathers pace

ARM is a Cambridge based technology company with a long history in the UK and abroad. They design the technology that sits at the heart of many advanced digital products from wireless, networking and consumer entertainment solutions to imaging, automotive, security and storage devices. ARM has recently unveiled the findings of a new comprehensive report by The Economist Intelligence Unit entitled The Internet of Things Business Index: A quiet revolution gathers pace. The report, sponsored by ARM, found that 75 percent of C-suite business leaders are actively researching opportunities created by the Internet of Things. 

Ian Ferguson , VP of Segment Marketing at ARM is here to talk us through the findings.

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Ian, why is the Internet of Things so important for ARM to be considering?

Firstly because we don’t make chips and because we don’t make platforms the decision makers in these vertical markets are quite a lot of steps down the value chain for us and one of the opportunities we had with the economist was to actually to interview C level executives from a vast range of markets like energy space, health care infrastructure, financial services, manufacturing, construction, real estate and so on. A technology company like us we would not without the help of the economist been able to find reasons for natural conversations with some of those verticals.

The Economist also reached out to quite a few regions across the world. The split was about 30% from Europe, 30% from North America, 30% from Asia with the remaining 10% Latin America and Africa, so a pretty diverse set of people. Reaching out to real estate and construction for example would be harder for us to reach out to on our own so that was one of the reasons.

ARM is a billion dollar company but we are not well known outside our area of success so this was a great opportunity to communicate on a big scale. Especially given the fact that we are all about providing our technology to our partners who are the primary brands like Samsung to name one. We are sort of behind the scenes trying to put our goodness into chips but maybe if the survey had gone out to some of these other people I don’t think necessarily it would have as much of a response than if it came from someone like The Economist.

Why is it that some sectors and industries have been faster to take up the principle of the Internet of Things than others that might well be able to apply the technology just as effectively?

My surprise was that before the survey, I would have said that my own industry with IT techie people like myself would have been the first ones to embrace the Internet of Things.

I view it as connected things to the internet whether that is small sensors or gateways so at some point if we go back to the original definition by Mr Ashton when he was at Proctor & Gamble it should be that any of those sensors can talk to anything else so cars talking to street lights, heart rate monitors talking to schools for example.

Actually what this study showed was that the first places where these connected devices are being deployed in enterprises is in manufacturing and the second was actually in construction and real estate. My sense from talking to a few people in those industries is that there are very obvious benefits to deploying these sensors. We have actually seen in manufacturing the use of sensors to give better ground level control of where resources’ are and managing how to deploy and manage equipment more efficiently such as within food plants for instance.

What the study also showed was although there were about 75% of the C level executives having very detailed discussions about Internet of Things, they were still wrestling with what the ROI would be on that particular investment. But in manufacturing at least we are seeing a very clear benefit for deploying these sensors to actually improve the cost of manufacture. I think some of these other industries are looking at areas where there may not be quite such an obvious return on base costs initially and that is why those people might in a more research kind of mode towards the Internet of Things as opposed to actually starting to deploy systems.

One of the things that this survey showed was actually 1 in 4 of the manufacturers interviewed were already deploying a network of connected things.

Aside from the measurement of ROI, what are the other barriers that are preventing some industries getting to grips with the Internet of Things?

I think there are and the survey threw up a few and then one which we have been wrestling with at ARM also. 

Some enterprises are saying, yes this sounds very good but we just don’t have the right expertise inside the company or can’t find the right people. The other way of saying that is that, this technology for some people is just too challenging to connect up and that really for those wave of adopters to take it in addition to their need for ROI it actually needs to be easier to connect it all together.

We have seen this with some of our trials with the Cambridge Campus that you mentioned earlier at our headquarters. We have started to put in intelligent lighting systems into the car parks and sensors inside our conference rooms to manage temperature and the lighting system so that in periods of inactivity things power down and when people are there the lights are. We are working on the next phase now where you will have real time available to your conference room based on those sensors so even the room might have been booked but if that meeting has not taken place or they have left early there will be more real time use of those resources. It is not just something you plumb together easily right now so I think there is a hesitation about the technology level.

Another barrier that I was surprised to find didn’t really come out as much as I was thought was around security. There are some places where it is an enclosed system. So, if you’re a Formula 1 team for example, you might have a lot of money to invest in technology and you have a lot of people with very high security around that network. If you are in some of these other industries where your specialty is something other than connecting stuff up I think people are going to become more concerned about the security of that network. Obviously it will depend on the types of things on that network and how important that data is but I predict that is going to be looming as a fairly major issue in the future.

The third is really around connectivity. As I have said the Internet of Things is really about connecting to everything. There is a lack of common frameworks, the joke is that the great thing about standards is that there are so many of them and I think in the IoT area there is a lot of work that still needs to go between all of the industries to actually make it easier to plug and play pieces of technology together.  It is probably easy to connect stuff together if it is all from one manufacturer or all from one service. But really for IoT to really get to that massive deployment vision of ‘anything talking to anything’ there is going to need to be some work about reliance on frameworks and how devices communicate, authenticate and send and receive data.

The top five barriers for companies increasing the use of the Internet of Things:

1) Lack of employee skills/knowledge

2) Lack of senior management knowledge and commitment

3) Products or services don't have an obvious IoT element to them

4) Immaturity of industry standards around IoT

5) High costs of required investment in IoT infrastructure

We are currently seeing big debates between governments, energy companies and business on the costs of energy bills within industry. Some of the principles of the Internet of Things could contribute some technology solutions that could lead to some significant savings in the future?

The other thing that came out of the study was that in addition to cost savings a number of the people surveyed saw that there were opportunities to generate new revenue, or improve customer service. One element is within the very high costs in manufacturing like the provision of energy from oil and gas It is very easy to see deployment of technology having a very quick impact on being more efficient with what you have got and we are starting to see the early work where connected things could add new services.

In San Francisco where I sit right now a lot of the parking meters are being connected to a smart network so you can actually book the space if it is available over the phone. That is an efficiency plan so people are saying we can analyze those spaces available, if there are actually less spaces available in a particular area because of an event they might start to put the prices up for instance and there is much more useful analytics you can do on that car parking information to cite one example.

We are also seeing technology being deployed in the insurance industry and you may have heard of in the UK where you can have a device put into your car to improve insurance premiums based on your driving patterns. There is a little bit of that in the US coming on now as well, some of the biggest insurance companies over here are doing that and that then throws up the next wave of discussion around who owns that data.

I think in the case of where it is their own device but in your car, they are going to say that data is their data and it is probably hard to argue with that. I think that there are going to be other cases where the data that comes out of the connected things like a heart rate monitor for example, where I am probably going to think that it is my data and I would want to control that as opposed to it being aggregated and controlled by others in the cloud.

We talk about a lot here on about the use of Big Data and how organisations utilize it and this represents the interface between big data and the customer at the other end. With that link developing how do you see that changing the business landscape into the future?

Our phrase is big data starts with little data. From sensors in forests which send data saying we are on fire come and dowse our flames to data coming out of medical devices, parking meters and street lights. I think the Internet should be about making our lives better and making things more efficient. But it has to be done in a way where that data is being shared in a controlled way from out of those small micro controllers and sensors. At ARM we are wrestling with the technology challenges and we think it is still a massive puzzle and that we are a very small part of the larger overall Internet of Things as our technology and that of our partners integrates more onto platforms and software.

The main area of focus for us is security and building the right products. Also trying to align on frameworks on that communication path and if we can have control of the data from the user as opposed to that data being controlled by the cloud players I think that vision of us having more efficiency around ourselves and being more efficient in terms of saving planet resources through the better use of precious resources like electricity is what we are trying to achieve.

Download and read the full report from ARM and The Economist Intelligence Unit : HERE

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