The Internet of Things: Hype or Reality?

Maciej Kranz, VP- Corporate Technology Group, Cisco

Maciej Kranz, VP- Corporate Technology Group, Cisco

​For years, the Internet of Things (IoT) has been lauded as a way to improve productivity, optimize development and manufacturing processes, monitor an expanding global portfolio of physical assets, and manage increasingly complex supply chains. Yet for too long, the hype has exceeded the reality. The promise of IoT has been hindered by fragmented, proprietary technology, the physical isolation of industrial control systems, and a fundamental disconnect between the information technology (IT) and operational technology (OT) organizations in many companies.

Today, the long-anticipated promise of IoT is being realized. Almost daily, I work with customers and partners as they develop strategies to gain competitive differentiation through innovative technology—and increasingly, that innovation involves the Internet of Things. Several trends are accelerating this growth, including:

• The proliferation of access technologies designed to meet the various requirements of different IoT  deployments
• The growing ability of real-time analytics to turn data into actionable insights
• The convergence of IT and OT organizations and functions

More Connected “Things,” Connecting in Different Ways

Since the 1990s, the number of connected devices has skyrocketed from around 1 million personal computers to 15 billion networked devices today. As more and more devices enter the picture, we are developing the key building blocks for the next big wave of the Internet, called the Internet of Everything (IoE)—the networked connection of people, process, data, and things. IoT is a major enabler of IoE, connecting sensors, machines, and other devices.

By 2020, Cisco estimates there will be an estimated 50 billion connected devices—including cars, buses, trains, office buildings, factories, oil rigs, homes, and entire cities. Some are stationary, some mobile, some have IP addresses, some don’t, some are always on, some intermittent, some are clustered together, some geographically dispersed. This diversity is driving a proliferation of access technologies to connect them—each designed for specific situations.

Several criteria determine which technology is best for each situation:

1. How many and which types of devices are in your network?
2. Are these devices mobile or fixed, and how geographically dispersed are they?
3. How much data is being transmitted, and what is the bandwidth required?
4. How time-sensitive is it?
5. For battery-powered devices, what is the battery lifetime?
6. What are the cost constraints?

For example, a connected vending machine may send a short signal when an item needs to be restocked. This low-volume, non-time-sensitive communication can easily be handled by a traditional 3G or 4G network. On the other extreme, the sensors deployed around an oil rig may generate terabytes of data each day, and fiber cable would be required to send all of that data back to a central data repository.

It’s Not Just About Things, It’s About Data

The oil rig example illustrates how the sheer volume and variety of data traversing today’s networks are increasing exponentially. | | July 2015 18 CIOReview The promise of IoT has been hindered by fragmented, proprietary technology, the physical isolation of industrial control systems, and a fundamental disconnect between the IT and OT organizations in many companies This highly distributed data is generated by a wide range of cloud and enterprise applications, websites, social media, computers, smartphones, sensors, cameras and much more — all coming in different formats and protocols.

A recent Cisco study (Attaining IoT Value: How to Move from Connecting Things to Capturing Insights) asked respondents which aspect of the Internet of Everything their organizations needed to improve most to make effective use of IoT solutions. The number one answer was “data.”

There are many challenges involved in effectively managing this vast influx of data, including integrating data from multiple sources, automating the collection of data, and analyzing data to effectively identify actionable insights.

To illustrate, consider the oil rig example, where data may be generated by video cameras, pressure gauges, heat sensors, mobile devices, and a host of other sources. Data virtualization can integrate these heterogeneous data sets live, at the moment the data is requested, without the need for it to be physically stored in a central repository—a very good thing in the case of a deep-water oil rig, which would require 12 days to send just one day’s worth of data via satellite. Once the data is captured and integrated, it needs to be automatically assessed so it can be sent to the right place at the right time to be analyzed. In the case of the oil rig, the data is processed locally in real-time, and just the exceptions or alerts are sent back via satellite.

This involves analyzing data near its source at the “edge” of the network—a capability enabled by fog computing. Fog computing supports emerging IoT applications that demand realtime data analytics to produce actionable insights in the moment they are needed. So, if a pressure sensor on our illustrative oil rig transmits a dangerous reading, it can be automatically assessed and flagged as a critical issue and analyzed locally in real time, enabling immediate action to shut down the failing equipment.

It’s Also About Process: Bringing Together IT and OT

In the first wave of the Internet, data and technology systems fell solidly in the realm of IT. As industrial control systems developed, a parallel operational technology organization grew up to manage them.

As IoE multiplies networked connections, the worlds of IT and OT are starting to converge. And with this convergence comes a culture clash. In a recent Cisco study on IoE in the oil and gas industry, for example, 59 percent of respondents did not believe their firms’ IT and OT strategies were aligned.

Even with this culture clash, over the past decade or so, OT and other lineof-business functions have increasingly adopted IT technologies and moved to open standards such as Ethernet and IP, and even to cloud services. At the same time, IT has increasingly become a business partner to the line-of-business and OT groups, with a better understanding of business outcomes and operational requirements.

IoT Is Here and Now

Today, IoT deployments are accelerating globally. In fact, the number of deployments has grown more than threefold since 2012. Over 10,000 Cisco customers— including most Fortune 1000 manufacturing companies—have deployed Cisco’s IoT architectures and solutions.

Here are a few steps to help you get started in your own IoT deployment:

1. Connect all your devices
2. Implement open and interoperable standards throughout your organization
3. Converge IT and OT
4. Leverage cloud and fog
5. Embrace industry partnerships

Cisco estimates that the Internet of Everything will generate $19 trillion in Value at Stake between 2013 and 2022—with $8 trillion coming from IoT. As IoT comes into its own, much of this value will migrate to new industry winners—the companies that strategically embrace the technology, turn raw data into actionable insights, and take a unified approach based on open standards.

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