Internet of Things

The Internet of Things: Leveraging the New Industrial Revolution

The media tends to reiterate that the Internet of Things (IoT) is a game-changer for every industry, and the conversation on this topic is becoming livelier and livelier across various channels. Those striving to leverage IoT should be familiar with the topics and companies driving the IoT coverage. Analysing the top publications globally, we discovered that the main topics in the IoT coverage are cybersecurity and industrial applications, while Microsoft and Amazon are among the firms driving the conversation.

 

“It started with “every company is a technology company,” moved to “every business is a digital business” and now I think we’re at “every industry is an internet of things (IoT) industry,” observes technology entrepreneur Leon Hounshell in a Forbes article on the future of business. He goes on to explain that in every sector, from finance to healthcare, the technology which powers companies has become just as important to their prosperity as the products or services that they offer.

The Forbes piece is just one of the myriad articles highlighting the significance of IoT and suggesting that humanity stands on the brink of a Fourth Industrial Revolution. Such sentiments have been circulating around the business world over the last few years. In its 2014 report The Internet of Things: The Next Mega-Trend, Goldman Sachs asserted: “The global industrial sector is poised to undergo a fundamental structural change akin to the industrial revolution as we usher in the IoT. Equipment is becoming more digitized and more connected, establishing networks between machines, humans, and the Internet, leading to the creation of new ecosystems that enable higher productivity, better energy efficiency, and higher profitability.”

What Goldman Sachs called a mega-trend has now evolved into something bigger. The media tends to reiterate that IoT is a game-changer for every sector as well as a golden opportunity for long-term growth. It has been estimated that 127 new devices connect to the Internet every second somewhere around the world: by 2020, just two years from now, the number of devices will be nearly 30.73 billion, with IoT having an annual economic impact of $3.9 trillion to $11.1 trillion by 2025, according to a McKinsey Global Institute report.

The conversation about IoT’s potential is becoming livelier and livelier across various media channels. Technology outlets overflow with articles on smart cities, smart homes and wearable devices, business publications speak about upcoming market disruptions and investment opportunities, while the mass media foretells that automation will change our lives fundamentally.

In one of our latest blog posts, we focused on 5G and how it’s perceived as the technological development which will make IoT possible. With this in mind, we advised telecommunications companies aiming to leverage 5G to design a data-driven PR strategy in order to position themselves as the top players in the new field and to be seen as first-movers and innovators.

But companies striving to leverage IoT should go beyond the conversations around 5G: they would need to be familiar with the topics and companies driving the IoT coverage as a whole.

 

Focal points

 

Analysing the top publications globally, we discerned seven main topics in the IoT coverage:

Cybersecurity is the biggest concern around the adoption of IoT solutions, and it’s discussed on par with the applications and opportunities presented by the new technologies. Most journalists and commentators agree that more data and more connectivity mean more risks. In fact, many point to cybersecurity as the most significant obstacle hindering the implementation of IoT at a faster pace.

Indeed, a research by Bain found that 93% of the executives would pay an average of 22% more for devices with better security, while enterprise customers would be willing to buy more IoT devices if their concerns about cybersecurity risks were addressed. Bain estimates that improving security solutions for these devices could grow the IoT cybersecurity market by $9 billion to $11 billion in 2020.

There is a great number of articles discussing cybersecurity as the most important issue around IoT. There are titles such as The Internet of Things Era: 6 Ways to Stay Safe, To Grow The Internet Of Things, Improve Security and The Internet Of Things Is Becoming The Internet Of Threats. The growing concerns make content with similar focus very popular among readers and social media users. The top trending article on this topic is on technology website The Verge, which reported that California became the first state with an Internet of Things cybersecurity law.

The popularity of the topic is also exemplified by the fact that professional services firms such as EY issue special reports on the subject, while one of the most popular platforms for online education – Coursera – even offers a course called Cybersecurity and the Internet of Things.

Cybersecurity is also a central point of discussion at IoT conferences and symposiums. For instance, at this year’s World Internet of Things Exposition, which took place in China, the president of 360 Enterprise Security Group, Han Yonggang, said:  “IoT-based smart systems are not capable of providing strong security defense due to the lack of a unified standard and sufficient experience of security developers. Invasion of the systems can lead to leaks of users’ personal data or even threaten safety.”

The conversation about IoT applications divides into two parts – consumer and industrial. The number of articles on IoT’s industrial applications is similar to the number of those on cybersecurity, with many touching upon both subjects. The quantitative difference between the articles on industrial and consumer applications goes to show that most commentators see the main uses of IoT in the former domain. The most cited studies are also on industrial practices and look at areas such as transportation, logistics, environmental protection, healthcare, security and electricity.

Peter Farquhar, Business Insider’s news editor, commented: “Broadly speaking, the ways IoT is changing the world are barely noticed by regular folk like you and me. Urban infrastructure maintenance, pollution levels, water quality, species monitoring, real-time health diagnoses, surveillance, agriculture… there are very few industries that will not in some way be improved by one or many types of 24/7 connections.”

The bulk of IoT investments discussed in the media are into industrial projects: for example, Scotland’s IoT framework which will provide a £6m boost to help businesses develop new applications with a wireless sensor network for apps and services to collect data from devices and send it without 3G/4G or Wi-Fi. The aim is to enable firms to monitor the efficiency and productivity of assets and equipment, and to improve their production.

Since most investments and applications are in the industrial sphere, journalists don’t pay as much attention to the consumer market. “IoT at consumer level – the smartwatches, home sensors, endless array of personal something-ometers – is mostly just tricks with numbers to impress you into buying something you probably don’t need,” Farquhar remarked.

In the consumer sphere, smart homes are the most popular IoT use case. The coverage mentions lighting, heating and air conditioning, media and security systems. Some articles talk about a convergence of consumer IoT and industrial IoT, predominantly in healthcare, where IoT is able to link personal healthcare and healthcare providers.

The Financial Express observed that there is a rush to launch new internet-connected products in the market to claim maximum share, but warned that such devices are usually offered by companies with expertise in design and manufacturing, not security, and they don’t, but they don’t advertise the fact that they use open-source technology which might contain inherent software vulnerabilities.

Examples of industrial IoT launches include AstraZeneca’s smart track code platform for patients, which it introduced in cooperation with Ali Health to provide users with a health management service to manage prescriptions, track and verify test results, and learn about various health conditions.

The reports on IoT deals include Nokia’s acquisition of California-based IoT start-up SpaceTime Insight, which offers machine learning-powered analytics and IoT applications for transportation, energy and utility companies. Meanwhile, Microsoft partnered with Dell to develop IoT solutions for vertical customers.

Regulation in the IoT sphere is largely viewed as something which will benefit the end-users and the wider security ecosystem. Journalists note that governments need to implement regulatory frameworks instead of simply putting pressure on businesses to make their products more secure. One of the few articles on specific IoT directives is in The Bangkok Post, which reported that Thailand’s National Broadcasting and Telecommunications Commission (NBTC) plans to introduce a series of regulations governing the IoT next year, ahead of the commercial arrival of 5G.

 

Internet of Everything

 

For a better understanding of the ongoing conversation, the IoT coverage could also be broken down by industry:

Manufacturing tops all industries by number of IoT projects and investments, according to an often cited study by the International Data Corporation. Most articles focus on IoT developments in the manufacturing world for political reasons as well – it’s a subject addressed by many politicians and social commentators because it’s as an area undergoing rapid automation and many workers are afraid that they’ll lose their jobs.

Many reports point out that IoT has already started to make a clear impact on the energy sector by cutting costs and increasing production. Meanwhile, telecommunication companies are increasingly leveraging the cloud to bring down the recurring operational costs: for example, India’s top service provider Bharti Airtel implemented a revenue management platform. In transportation, the most discussed innovations are connected cars, automated control of traffic light networks based on real-time traffic information.

In the meantime, IoT in the healthcare market is set to become more and more popular, with Electronic Health Records being the most widely discussed solutions. According to a market report published by Transparency Market Research, the global IoT in the healthcare market is expected to reach US$ 322.77 billion by 2025, expanding at a CAGR of 20.6% from 2017 to 2025.

Business technology news website ZDNet, one of the specialised outlets publishing a plethora of IoT-related content, thinks that IoT will create a healthcare revolution in the UK’s National Health Service: “For the NHS, the IoT could present big benefits for patient care by enabling hospitals to track and monitor patients from the moment they arrived at hospital – or even in the home before that – with real-time data from sensors being automatically added to patient records without the need for nurses to take readings or update charts. At a more prosaic level, the IoT could allow the NHS to track expensive or vital (or both) equipment more effectively.”

Blockchain is discussed as a key component in the communication between smart devices. As tech investor Francesco Corea notes in an article for Forbes, blockchain is increasingly being looked upon in an IoT context because the decentralised and autonomous features of the system make it useful for tasks like record keeping. (For more blockchain insights, read our blog post: Surviving in the Wild of Crypto Regulations: A Guide for Investor Relations.)

 

Companies

 

As we mentioned in our 5G feature, firms should particularly step up their efforts in becoming thought leaders on IoT. As we observed in our analysis, not many articles on this subject talk about specific brands.

Our tools also discovered which companies are leading the IoT coverage:

Microsoft’s IoT business segment has been confidently building its media presence. Apart from the above-mentioned partnership with Dell, Microsoft joined forces with telecommunications equipment company Qualcomm to build AI-enabled smarter cameras, and with Chinese technology company DJI to build drones.

Amazon’s subsidiary Amazon Web Services launched four services facilitating the implementation of IoT solutions. “Customers tell us they want to spend less time on the undifferentiated heavy lifting of getting different devices and services to work together and more time innovating on full-featured IoT applications,” said Dirk Didascalou, IoT Vice President of Amazon Web Services. “We are giving customers tools that remove the cost and complexity of building applications at the edge with rich data sources to drive better business decision-making. This frees them up to spend time innovating in their core business, instead of writing code to connect devices and applications and to ingest actionable sensor data,” Didascalou added.

Many journalists see Microsoft and Amazon locked in an ongoing battle for supremacy in the IoT platforms market: they were among the first high-profile technology firms to enter the sphere when they introduced cloud-based IoT services in 2015.

Google features in many market reports mainly because of its subsidiary, the smart thermostat maker Nest, which had operated as an independent unit under Alphabet’s umbrella until this year. In addition to thermostats, Nest offers video doorbells and security cameras that automatically adjust settings based on user behaviour.

Huawei has been mentioned in the context of smart cities for its new digital platform which it aims to use across smart public safety, environmental protection, transportation, government, education, and agriculture.“A smart city development race driven by the growing global digital economy is taking place around the world,” Huawei said. “Smart city adoption has undergone the first stage of breaking down data silos; the second stage of the rise of mobile internet applications; and the third stage of IoT deployment for collection of mass volumes of city data. It is now at the fourth stage, where cities are improving their management capabilities through AI-enabled data mining, achieving the integration of digital technologies and city governance to promote sustainable city development.”

Apple features in reports on its acquisition of AI startup Silk Labs, a platform for IoT hardware. The acquisition details and Apple’s plans are unknown, and the firm didn’t do much to promote it: the news was reported by digital media company The Information, which said that Apple “has quietly acquired a startup”. There are some articles trying to dissect what might come out of the deal, pointing out that both firms want to design AI systems that operate locally instead of in the cloud, thereby bypassing controversial data collection policies used by companies like Amazon and Google.

Qualcomm’s bet on India’s IoT market is also well-documented. The US company is partnering with device makers and telcos to drive the IoT ecosystem in India, particularly the narrow-band IoT (NB-IoT) segment. It also anticipates more than $1 billion in sales this fiscal year from semiconductor chips from smart watches, connected speakers and other devices outside its core smartphones business.

The cloud computing unit of China’s e-commerce firm Alibaba signed a deal with Germany’s Infineon Technologies to promote IoT industrial uses, which is supposed to facilitate the digital upgrade of Chinese enterprises and cities. Samsung is also in the spotlight because of a partnership – it launched a narrowband IoT network together with Mukesh Ambani-led Jio, striving to serve both enterprise and retail customers in India.

Xiaomi’s CEO Lei Jun has promoted his firm’s IoT platform by emphasising that it has over 85 million units of IoT devices, 800 smart devices, and 400 partners -something which has made the company the “world’s largest” IoT platform. In the meantime, Intel has been investing heavily in its IoT group to serve the retail, automotive, industrial, and video surveillance markets. General Manager Tom Lantzsch spread the message during a presentation at the UBS Global Technology Conference.

As we mentioned in our 5G feature, the pace of technological development creates the need for a swift execution of PR campaigns focused on promoting brands as the leaders of the future.

In the case of IoT, firms need to position themselves in the front rows of the Fourth Industrial Revolution by being in the centre of the IoT conversation. This could be done by devising a data-driven communication strategy which would determine which topics and industries need particular attention. For instance, our sample analysis shows that thought leadership on cybersecurity will guarantee a positive brand image for companies offering IoT solutions, which will in turn increase profits since 93% of the executives would pay an average of 22% more for devices with better security.

Distinguishing the regularities in the IoT coverage and incorporating the data in the design of effective PR campaigns can be achieved by utilising sophisticated media analytics tools which go beyond the numbers and employ human-led qualitative inquiry.

 

 

 

Visual created by Vectorpouch – Freepik.com

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