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2016: A pivotal year for the Industrial IoT

10 key indicators to watch

Ubiquitous connectivity is set to bring about another industrial revolution. Connected sensors and controls will enable us to monitor and adjust almost every activity in real-time, empowering businesses, cities and individuals to become far more efficient and innovative.

Although we can see this revolution coming, we don’t know exactly when it will begin and how dramatic an impact it will have. How fast will connected sensors be deployed and how disruptive will the Industrial Internet of Things (IoT) be?

By the end of 2016, we should be able to answer these questions far better than we can today. For any organization figuring out when to embrace connectivity and join the so-called Industry 4.0 movement, here are 10 key indicators to watch this year:

The length of trials:  Around the world, carriers, equipment vendors and enterprises are embarking on trials and pilots of sensors connected using a new breed of LPWA (low power, wide area) technologies. Vodafone and Aguas de Valencia, for example, are testing Narrowband IoT technology for smart metering in Spain. If most of these small-scale projects evolve into broader commercial deployments before the end of this year, the wireless industry will rapidly ramp up investments, economies of scale will kick in and the revolution will be under way.

Mergers and acquisitions: An Industrial IoT arms race is well underway between Cisco, Ericsson, Huawei, IBM, Intel, Nokia and other major vendors. Earlier this month, Ericsson, for example, acquired infrastructure management specialist NodePrime for an undisclosed sum to beef up its data center and Industrial IoT technology portfolio.  The level of M&A activity in 2016 will be a key indicator of how confident these players are about aggressive enterprise adoption of Industrial IoT solutions.

Power consumption:  The viability of many Industrial IoT applications, such as smart metering, asset tracking and smart agriculture, depends on LPWA technologies living up to vendors’ promises that connected devices will achieve battery lives of around 10 years. The aforementioned pilots and trials should reveal whether LPWA connections are truly “deploy and forget” or whether limited battery life will be a showstopper for many potential buyers.

Progress on standardization: Although LPWA technologies are already being deployed, some players are waiting for standards body 3GPP to complete the standardization of these technologies – widely accepted and widely used standards would help the Industrial IoT to benefit from interoperability and economies of scale. The process is due for completion in the summer of 2016, but that date might slip given the many different players involved and the potential for last minute disagreements over details.

Adoption in Asia (beyond South Korea): Individuals and organizations in South Korea tend to embrace new technologies with gusto, effectively testing new concepts for their counterparts elsewhere. Other Asian manufacturing centers will be watching South Korea closely and the speed with which major manufacturers with relatively low labor costs, such as those in China, Vietnam and India, use connected sensors will be a barometer of the potential efficiency benefits.

Substance or spin from Brussels: With the European Union under stress and scrutiny, EU policymakers are looking to deliver very visible and tangible benefits to the European economy. To that end, the European Commission has become increasingly vocal about the need for Europe to lead the development of 5G and the IoT. As well as monitoring whether the European Commission’s frequent communiqués on this topic contain substance (and promise public funds), Industrial IoT stakeholders should pay close attention to how much flexibility new EU regulations give carriers in terms of data protection and net neutrality.

Liability and data protection uncertainty: One of the biggest hurdles standing in the way of the Industrial IoT is fear. More precisely, fear and uncertainty around who would be liable in the event of a serious security breach or systems failure, particularly in the healthcare and automotive sectors where the consequences could be severe. Enterprises and organizations will be looking for policymakers to tackle these thorny issues head-on rather than kick the can down the road.

Public sector deployments in the developing world: For cash-strapped governments and NGOs in developing countries, every cent counts. Does it make financial sense to deploy connected sensors to monitor the water table or is it cheaper to pay someone to dig a hole? If organizations in sub-Saharan Africa and developing Asia begin to really harness wireless connectivity to improve agriculture education, healthcare and transport infrastructure, that will be a clear vote of confidence that the Industrial IoT is much more than a rich-world play thing.

Keyword searches: The numbers of searches for the terms “Industrial IoT” and “Industry 4.0” on the Google search engine have increased approximately tenfold and fivefold respectively in the past two years, highlighting how the concepts are fast gaining traction. In 2016, that trend should continue, as the wireless industry’s marketing departments engage in thought-leadership campaigns. Conversely, a slowdown in growth of this metric could flag an increase in skepticism and delays in adoption.

The use of multiple data sources: Realizing the full potential of the Internet of Things depends on real-time analytics of multiple datasets from a diverse set of sources. For example, a municipal travel authority would ideally monitor traffic volumes, traffic speeds, rainfall patterns, employment patterns, and train and bus passenger numbers, to get a complete picture of what is going on and how resources should be allocated.  But combining and analyzing multiple datasets is hard. It requires smart systems integration and smart algorithms. Still in 2016 some municipalities should begin to grasp this nettle as they seek to position their cities among the smartest on the planet.

In 2016, RCR Wireless News will be following these indicators closely, reporting on, and analyzing, key developments and gauging how disruptive the Industrial IoT will be in different sectors of the global economy. Watch this space.

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