There is little question that there are more machines connected to each other today than there are people on the planet. IoT will grow exponentially over the next decade, driving a massive rethinking of how we do business, buy services, and deliver services. It used to be that companies wanted to sell a product and never hear from the customer again. Now, the paradigm is completely changed. The way to thrive in an IoT-driven world is to use IoT devices to build a strong, mutually beneficial interactive customer experience. Take the healthcare example in the story below - the company uses IoT data to monitor performance and proactively alert customer service to possible problems.
The Internet of Things (IoT) is beginning to have a profound effect on businesses and business models. From government, to utilities, to transport and logistics, IoT is changing industries. Here are organizations from five verticals undergoing transformation because of IoT technologies.
The IoT is transforming municipal life through a number of smart city initiatives.
"Cities and city leaders are thinking more holistically about different uses of technology that are integrated and bringing different aspects of the city together into a unified whole," says Tim Herbert, senior vice president, research and market intelligence, at nonprofit trade association CompTIA.
"Improved decision-making made possible through new or better streams of data ranks as the highest perceived benefit," Herbert adds.
A few key examples of smart cities initiatives include the following:
- Water management. The city of Houston was recently losing about 15 billion gallons of water per year (about 15 percent of its water) from leaky pipes. It embedded sensors and intelligent pump control systems, allowing it to better regulate the flow of water and identify issues. Similar smart cities solutions could include: water quality, irrigation, storm water runoff, flooding and household water management.
- Energy conservation. The New York State Energy Research and Development Authority (NYSERDA) has announced its new Real Time Energy Management (RTEM) program, which uses sensors, smart meters and big data analytics to optimize the energy usage of commercial buildings. New York State and utilities in the region are also working to upgrade the power grid.
- Transportation. Columbus, Ohio, recent winner of the U.S. Department of Transportation's Smart City Challenge, is using part of its $40 million prize to deploy electric self-driving shuttles operating in conjunction with a new rapid transit center. CompTIA says the system will enable better vehicle-to-vehicle data exchange and communication with traffic signals and other transportation infrastructure.
- Public safety. Copenhagen, Denmark, has replaced more than half its street lights with energy-efficient smart LED lights. Sensors and connectivity to the city's network enable auto-dimming based on time of day or the presence of a full moon, and the ability to increase brightness when they sense walkers or bikers. Related public safety smart cities projects could include video surveillance systems with advanced analytics, forest fire fighting drones and incident reporting and monitoring systems for citizens.
- Environment. CITISENSE, a consortium of 14 European nations, is deploying a network of “citizen observatories” to monitor air quality through wearable sensors. CompTIA notes similar crowdsourcing approaches are underway in Beijing and several other cities.
For decades, energy utilities in the U.S. have followed a common model: big, centralized power plants and high-voltage transmission lines that send power to substations which then distribute that power to homes and businesses. But the IoT may change the energy utility playbook.
Those big power plants and high-voltage transmission lines are still part of the equation, but so are community solar power, wind farms, microgrids, battery storage and more. Connecting these technologies to the existing grid — handling settlements in an enclosed market, linking up transactions between energy producers and buyers (perhaps via blockchain technology) — requires a serious IT overhaul.
Energy analytics. The New York State Power Authority (NYPA) is the largest state public power organization in the U.S. It operates 16 generating facilities (including two plants powered by Niagara Falls) and more than 1,400 circuit-miles of transmission lines. NYPA is responsible for 15 to 20 percent of New York State's daily electricity output. The organization has connected its energy-producing machines to analytics software via sensors. The software, running in NYPA's central Smart Operations Center in White Plains, N.Y., provides operations leaders with predictive alerts that accurately forecast possible failures up to weeks before they occur.
NYPA has also opened the Albany, N.Y. -based New York Energy Manager (NYEM) network operations center, which will eventually be bi-directionally connected to 20,000 public buildings throughout the state. That will allow it to send controls to building management systems to actively drive energy savings by lowering heating or cooling requirements during periods of low use (like weekends, evenings, breaks in school schedules, etc.). In the future, it could be tied to building occupancy to match the requirements to the heat load associated with the number of people in a building.
Once the buildings are fully online, NYPA estimates NYEM will save taxpayers more than $100 million annually. Eventually, NYPA hopes to offer the services to its business and industrial customers.
"It will take time for the majority of buildings to be connected bi-directionally," says Ken Lee, senior vice president and CIO of NYPA. "We will start with a significant number, but it will take time to connect a large percentage since many of the buildings have legacy systems which don't have building management systems to connect to. This is a capability which we're actively working to mature."
Performance monitoring. The IoT is also transforming electricity generation outside the U.S. RasGas, a liquefied natural gas (LNG) provider in Qatar, now operates seven LNG trains (an LNG plant's liquefaction and purification facility). With help from GE, RasGas has equipped those trains with sensors that power analytics.
"The trains were identical but weren't performing identically. By monitoring performance with sensors all along the train, we were able to diagnose that the difference came down to some valve settings," says Derek Porter, general manager of Product Management at GE Digital. "That saved them the equivalent of three days of energy production — around $8 million."
The agriculture industry is also introducing innovative projects centered on the IoT aimed at improving crop yields, among other goals. Boston, Mass.-based Freight Farms, for example, makes fully instrumented "farms in a box" built inside 40'x8'x9.5' shipping containers.
"They take shipping containers and they build agricultural units growing leafy greens," says Ryan Lester, director of IoT at LogMeIn's Xively IoT division, provider of the Xively Connected Product Management (CPM) platform used by Freight Farms. "They're operationalizing farming so they can control lighting, watering, pH, so on schedule you can grow herbs and leafy greens and know exactly what the yield will be every week. It's moving farming from 'we hope it rains today' or 'we hope it's sunny' to a fully automated environment that can optimize output."
Freight Farms is also helping users crowdsource recipes based on the data output of the units. For instance, Lester says, the data might show that turning up the humidity setting to a certain point and increasing pH by a certain amount increases the yield of a crop by 10 percent. That data can then help other users increase their yields.
The IoT is transforming business models in healthcare as well. Aerocrine is a Swedish medical device company that makes devices that help doctors diagnose and treat asthma. Aerocrine's NIOX MINO and NIOX VERO are essentially like the breathalyzers police use to measure blood alcohol content, but these devices measure fractional exhaled nitric oxide (FeNO), an important biomarker for airway inflammation. Not only can precise measurement of FeNO in a patient's bloodstream help clinicians determine whether asthma is the cause of a patient's symptoms, the measurement can also be used to determine the likelihood of steroid responsiveness.
Aerocrine is now using Microsoft Azure Cloud Services to gather telemetry data from computers connected to NIOX MINO devices and then transmit the data for analysis. It developed an application that transmits complex data like sensor and environmental data from each instrument's sensor, the serial number of devices and sensors, and the number of airflow measurements remaining on each instrument. Azure Event Hubs ingest the data from the devices, while Azure Stream Analytics processes the data, which is presented to Aerocrine's sales and customer service representatives via Microsoft Power BI for Office 365 dashboards.
Aerocrine is also cross-referencing the data with its Microsoft Dynamics NAV ERP system to give its sales team a clearer view of the devices.
"We needed to analyze that data to manage the supply chain better," says Anders Murman, CTO at Aerocrine. "For example, each device contains a sensor, which eventually reaches zero measurements as hospitals and clinics consume the tests. The facility then approaches us for a new device. But we wanted to be more proactive about this, so we would be able to know how and when to deploy resources in the field."
The data allows the company to determine whether devices are operating outside their normal parameters — in conditions with humidity levels that are too high or too low — and create alerts to send to the customer service team. The company is using insights from the data to better identify the trigger points that affect performance and use that information to deploy field resources for customer service and sales support.
Consumer packaged goods
The consumer packaged goods (CPG) sector has also experienced success implementing solutions based on the IoT. British beverage company Diageo, the company behind Johnnie Walker scotch whisky, has begun using "smart bottles" for its flagship Johnnie Walker Blue Label whisky.
The smart bottle features a printed sensor tag made with OpenSense technology from Thinfilm Electronics. It can detect the sealed and opened state of each bottle. OpenSense uses smartphones' Near Field Communication (NFC) capabilities, allowing Diageo to send personalized communications to consumers who read the tags with their smartphones.
Venky Balakrishnan Iyer, global vice president of digital innovation at Diageo, says that while Diageo owns very traditional brands (many of them are 300 or 400 years old), there's a large amount of digital interaction happening with those brands.
"These are people standing in stores or bars and wondering whether they buy the single malt or the blend, highland, or lowland," Balakrishnan says.
Diageo sees millions of searches about its brands occurring, and more than 50 percent happen via mobile within a few feet of the bottle on the shelf. The smart bottle is an attempt to facilitate and shape that interaction.
That interaction doesn’t end once the bottle has been opened.
"We know the bottle opening event has occurred," Balakrishnan says. "Our communication can change from guiding the consumer on which bottle to buy to how to best enjoy this product."
The sensor tag also has an application in the supply chain. The tags allow tracking of products across the supply chain, in-store and to the point of consumption. The sensor tags remain readable even when the factory seal has been broken. This provides an additional layer of security to protect the authenticity of the product.
It's clear that companies are paying attention to IoT. A survey from McKinsey Global Institute found that although enterprise IoT is a relatively new development, 98 percent of respondents reported that most companies within their industry include enterprise IoT initiatives in their strategic roadmaps. What's less clear is how well corporate infrastructures will hold up to the onslaught of IoT data. Companies need to plan for a massive scalability challenge, as the explosion of connected devices funnels enormous amounts of data across global networks. Just for starters. IoT is among the fastest-growing application types, and they drive significantly different traffic patterns that traditional architectures are not equipped to handle. It requires a data-driven approach to optimize for IoT--you can find out more here. ~Carol Hildebrand, Senior Strategic Marketing Writer, NETSCOUT