IoT has the potential to bring about the next industrial revolution and to transform society, establishing a new ecosystem to serve humanity. In an IoT enabled world, people will receive uniquely personalised services, on demand, while societies will benefit from optimised resource use with minimal impact on the environment.
By the ComConnect Consulting research team
The interaction between humans and machines is on the verge of a radical shift with the potential to unlock immense possibilities, facilitated by the Internet of Things or IoT. With simultaneous advances in technologies such as artificial intelligence (AI) and machine learning (ML), these interactions between humans and machines can enable devices to anticipate, react to, respond and enhance events in the physical world. IoT is well poised to usher in the next ‘technological revolution’, since the dawn of the Internet era. The Internet of Things gains more relevance as the world turns more digital. There is no doubt about the value it has unlocked so far and its potential to change lives.
As the world gets increasingly connected, global IoT spending is set to increase significantly over the coming years. Though there are nagging security concerns that are yet to be addressed, a study by Cradlepoint (an industry leader in cloud-delivered 4G LTE network solutions for business, service providers, and government organisations) reveals that close to 70 per cent of organisations have adopted, or plan to adopt, IoT solutions within the next year. Gartner forecasts 20.8 billion connected devices by 2020. Bain Analysis predicts the combined markets of the Internet of Things (IoT) will grow to about US$ 520 billion in 2021, more than double the US$ 235 billion spent in 2017 (Figure 1).
The Indian market scenario
Although the country began its IoT journey much later than the developed economies, the installed base of connected units is expected to grow at a much faster rate than them. According to a Deloitte report, IoT units in India are expected to see a rapid growth of ~32X to reach 1.9 billion units by 2020, from its current base of 60 million. As a result, India’s IoT market is expected to grow ~7X to move from US$ 1.3 billion in 2016 to US$ 9 billion by 2020 (Figure 2). The key technology factors enabling IoT adoption in India include sensors, networks, standards, augmented intelligence and augmented behaviour (Table 2).
The growing number of tech-savvy consumers along with increasing smartphone and Internet penetration are driving consumer IoT applications in the Indian market. However, consumer IoT adoption is expected to be slower than the IoT adoption for industrial applications due to the cost of IoT devices, and the security as well as privacy concerns for consumers.
The Indian IoT ecosystem consists of a diverse set of stakeholders including hardware vendors, software application vendors, network operators and systems integrators. Interestingly, 60-65 per cent of these stakeholders are startups. The IoT presents opportunities for all stakeholders across the value chain.
However, according to the Deloitte study, application vendors focusing on both vertical and horizontal business solutions (including consumer and Industrial IoT) are expected to garner 50 per cent of the India IoT market. Apart from the applications designed for a large segment of consumers, customised solutions for niche consumer groups are also gaining importance. Hardware vendors are focusing on research and development (R&D) to expand their product portfolio in IoT, and are enhancing their market share through mergers and acquisitions. Network operators are investing more in new networks such as SigFox to increase connectivity revenues. Systems integrators are focusing a lot on IoT consultancy and implementation services, while enhancing digital capabilities and building solutions for IoT through the acquisition of niche companies and platforms. Startups with innovative solutions portfolios are playing a significant role in driving the growth of IoT in India.
|Table 1: Key technologies enabling IoT|
|Sensors||A device that generates an electronic signal from a physical condition or event||Small, robust, and inexpensive sensors create information from conditions in the surroundings|
|Networks||A mechanism for communicating an electronic signal||Wireless networks with ubiquitous coverage such as cellular connectivity, Wi-Fi, or LPWA networks|
|Standards||Commonly accepted prohibitions or prescriptions for process frameworks||Technical standards enable processing of data and also interoperability among different devices|
|Augmented intelligence||Analytical tools that improve the ability to describe, predict and exploit relationships among phenomena||Databases with unstructured information are searched and analysed for corrective future actions|
|Augmented behaviour||Technologies and techniques that improve compliance with prescribed actions||Several machine-to-machine interfaces remove fallible human intervention|
|Sources: Deloitte Analysis, Industry Reports|
Applications in demand
IoT adoption in India is expected to grow across industries. However, some key sectors that will drive this growth include transportation and logistics, utilities, and manufacturing and automotive – all of which are expected to see the highest adoption levels in India due to their direct association with the smart city projects. Moreover, sectors such as healthcare, retail and agriculture are also expected to make significant progress in IoT adoption.
The IoT applications in India across industry sectors can be clubbed under three broad categories (Table 1)
- Public sector
Consumer applications of IoT: While organisations expect IoT to increase automation, and therefore improve productivity, consumers expect IoT to improve their overall quality of life. Research conducted by Tata Communications (presented in Figure 3) showcases consumer expectations from IoT.
|Policy boost for IoT adoption in India
The government of India has a clearly outlined IoT policy and a related regulatory framework in place. The published policy contains IoT-specific training provisions, as well as research and development initiatives to support new IoT-enabled products and services. The government’s planned investment worth US$ 1 billion for 100 smart cities will be a key enabler for IoT adoption.
In 2017, the World Bank cited the government’s Digital India campaign as a key driver for making firms more competitive through the application of IoT technologies. An efficient IoT system in public administration translates into a better connected, more secure and environment-friendly society.
Among common people, knowledge about IoT is limited. A large number (~ 35 per cent) of people in the survey by Tata Communications related IoT only with smartphones, which is incorrect. Only ~14 per cent of all people surveyed (Figure 4) connected IoT to “all connected devices.”
Though most of the current developments in IoT have focused on industrial opportunities, there has been traction in the consumer space too. IoT applications for consumers are opening up new, intimate entertainment experiences. Shifting consumer preferences towards smart sensors, wearables like fitness trackers, and smart homes are triggering growth. There are already smartphone applications to lock doors, reset thermostats, etc. Firms are coming up with ways to cook, from the comfort of the living room sofa, using the smartphone. The increasing sophistication of the sensors used makes it possible for devices to understand consumers in ways unheard of before.
|Did you know?
According to an IDC report, more than 50 per cent of India’s corporate leaders believe IoT to be imperative to remaining ‘digitally fit’ and 60 per cent see it as being critical for a competitive advantage.
Industrial applications of IoT: Globally as well as in India, industrial adoption of IoT has far exceeded consumer applications. The term Industry 4.0 heralds a new industrial revolution through smart manufacturing. IoT is expected to drive operational efficiencies through automation, connectivity and analytics. Industrial applications broadly include improved automation, efficient tracking, and effective management through connected systems. In India, sectors such as manufacturing, automotive, transportation and logistics are experiencing the highest adoption of IoT. Typical industrial applications include:
- Manufacturing/supply chain – improved process automation, connected factories, robotics, tracking of goods, tools, etc
- Agriculture – handheld devices to figure out moisture/pH factor of soil, etc
- Transportation – improved vehicle tracking and traffic management
- Energy – efficient management of energy usage, potential faults, etc.
Applications of IoT in the public sector: IoT has significant application in the public sector as well. The chart in Figure 5 highlights the potential end use of IoT in this sector. In India, the government’s push for smart cities is expected to be a key enabler for IoT adoption across a large number of these areas.
Table 2: Potential consumer-focused applications of IoT
|Personalisation/ customisation||On demand access to tailored content|
|Authentication/ verification||IoT sensors for multi-level authentication, which remove the need for painful password based authentication|
|Wearables for better measurements||Wearables have the potential to unlock new data that can address the defciencies in the current measurement system. Through IoT, advertisers and media companies may be able to answer critical questions about consumer behaviour|
Challenges to be addressed
Though IoT is creating immense opportunities for both industry and consumers, like all aspects of technology, it is not without its share of risks.
As is common when anything new comes onto the stage, legislators across the world are looking for ways to incorporate new regulatory frameworks to plug the loopholes and ensure the smooth functioning of IoT. To realise its full potential, businesses and governments need to work together to overcome the impediments that lie in its path. Cyber security has already gained notoriety across the world due to increased incidents of cyber attacks, espionage and data breaches. With the number of connected devices increasing and with the virtual and physical worlds seamlessly getting integrated, the current security measures will no longer remain adequate. Organisations will require enhanced security frameworks—from device-level authentication and application security, to system-wide assurance and incidence response models.
Another critical hurdle is the lack of interoperability among existing systems, which will significantly increase the complexity and costs for IoT deployments. Present day technologies work largely in silos. However, in the future, a fully functional digital ecosystem will require seamless data sharing between machines and other physical systems from different manufacturers.
Though it is perceived that value added services such as applications and systems integration will be significant revenue drivers, the hardware side is also likely to generate sizeable revenue through the sheer volume of deployments. This will no doubt impact demand for electronic components. Individual IoT devices will inevitably require a microcontroller to add intelligence to the device, one or more sensors to allow for data collection, one or more chips for connectivity and data transmission, and a memory component. The connected devices that transmit information across networks rely on innovations from semiconductor players—highly integrated microchip designs, for instance, and very low-power functions in certain applications.
A new array of sensors based on micro electromechanical systems (MEMS) technology is rapidly being developed to enable IoT applications beyond motion and image sensing. These would include applications that measure humidity, altitude, food calorie composition, and various human health indicators.
With connectivity being the key need in IoT applications, multiple communication standards and protocols are being supported by consumer electronics and industrial devices, like low power and personal area wireless mesh networks, which are primarily suited for sensors. IoT applications usually require a single chip in an acceptable form factor and low power consumption for battery-operated devices. This requirement is a factor for growth in SoCs with embedded cores, GPUs and integrated wireless connectivity in a single package. Progress in these technologies has allowed the development of IoT devices that have compute, storage and network capabilities built into extremely small form factors, yet with low energy requirements.
India should look to build capabilities across areas such as sensors (to adapt to the rugged climate/ terrain in India) along with network infrastructure, standards, etc. Accelerators and incubators in India are already enabling startups to build innovative IoT solutions. Addressing the current talent gaps in cross-functional as well as specialised skillsets is imperative for the growth of IoT in India.