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The realities of today's IoT market

Buzz is growing around the IoT -- but how much is real and how much is hype?

The Internet of Things (IoT) is being touted as the next frontier for manufacturers that want to connect not only...

with their physical resources but also with their customers. By tying into the IoT, companies can instantly access real-time information on assets halfway across the globe and make faster and better-informed decisions. But despite the potential benefits of the IoT, industry analysts suggest that the technology may not be a good fit -- or even fit at all -- for the average manufacturer.

"In the hype versus reality balance, I think we've shifted toward the hype side," said Bob Parker, group vice president at Framingham, Mass.-based IDC Manufacturing Insights. "There's good, long-term opportunity [for IoT], but the key question that buyers are asking is, 'What will this allow me to do that I can't do today?'"

Sifting through the IoT hype

Parker points to the growth -- or lack thereof -- of radio frequency identification (RFID) as a parallel to IoT's adoption challenges. Industry hype around RFID has lasted for years, but factors such as cost and project size have prevented adoption from climbing as fast as vendors suggested. As Parker put it, "Manufacturers are still asking, 'Why can't we just keep using barcodes?'" In light of this, the onus really falls on vendors to prove the value of IoT investment to their customers.

The connected enterprise is one in which factory automation is tied all the way to the business systems at the enterprise level.
John Nesivice president of market development, Rockwell Automation

"It's a classic market problem: Vendors who are interested in [IoT] have this notion that, 'why wouldn't you want to instrument everything you have?'" Parker said. The buyers, however, are still unsure why they should change how they detect and respond to problems. "They're wondering if they really need to be able to monitor things in real-time," he added.

And the technology is not without limits. Predictive analytics, for example, requires some historic data to be able to accurately predict certain outcomes -- say, when a machine is likely to break down.

"You can do that with aircraft engines, because they've already been doing it for 15 years. But until you get a historic pattern [around an item], you can't really do predictive analytics on it. I think that gets way oversold in the market," Parker said.

Joshua Greenbaum, principal of Berkley, Calif.-based Enterprise Applications Consulting, also believes the hype around IoT may have exaggerated how much it is being used.

"I think most companies who are consumer focused -- manufacturers, distributors, retailers -- certainly see it as an eventual opportunity," he said. "But, right now, a lot of [IoT] is very experimental." According to Greenbaum, IoT has the most potential in asset management and production monitoring.

The real potential of the IoT

Greenbaum points out that many everyday items, such as energy meters, automobiles and aircraft already have sensors installed, so moving these items onto the IoT would be a natural progression. Manufacturers in particular are well poised to join the IoT, because most modern industrial equipment comes with sensors that are already collecting production data and sharing it internally.

"An ideal Internet of Things would be able to adapt to current infrastructures," he said.

Some manufacturers are better suited than others to include IoT not just in their factories, but in their products as well, according to Sanjay Khatri, director of product marketing and M2M at Jasper Wireless Inc., which makes a platform for connected devices. "The automotive industry especially seems to have a lot of promise because of the number of cars that are sold and in terms of the value of having connectivity," he said. "Similarly, we're looking at consumer electronics as connectivity becomes an important attribute for any type of device, from medical monitoring to home appliances."

Jasper Wireless recently formed a partnership with cloud services provider Axeda to expand both companies' footprints into the IoT. According to Bill Zujewski, chief marketing officer and executive vice president of product strategy at Axeda, the omnipresent nature of the cloud can allow companies to connect with their devices around the world -- no travel budget required.

"What a lot of our customers realize is that once their machines are connected, there's a lot of interesting data they can analyze to improve their processes," he said. "For example, they could do predictive maintenance. Instead of sending someone out once a month to service a machine, they can monitor usage and see when the machine tends to [need service]. If I don't have to send a person out to repair something, I can save tremendous costs."

John Nesi, vice president of market development at integrated systems vendor Rockwell Automation Inc., believes that the "connected enterprise" is the future of manufacturing.

"The connected enterprise is one in which factory automation is tied all the way to the business systems at the enterprise level," he said. "Supply chain is linked more aggressively with demand and real-time information is presented seamlessly from the systems running automated equipment in the plant."

The IoT is a large part of Rockwell's technology planning for the next few years, according to Nesi. Currently, Rockwell is partnering with Cisco on deploying industrial-level Ethernet connectivity across the plant floor. The partnership also includes security tools provided by Cisco to combat potential network breaches, he added.

In a further effort to address IoT security, Rockwell, Cisco and Panduit have formed a vendor consortium called the Industrial IP Advantage (IIPA). Its purpose is to educate IoT users on industrial Internet Protocol and deploy IoT technology more securely, Nesi explained.

Looking to the IoT's future

Current hype aside, IDC sees IoT becoming a substantial market in the next five years, according to Parker. "Beyond the hype, there is a lot of tangible interest," he said. "And telecommunications providers -- AT&T, Verizon, Sprint, etc. -- will become major players in this area." While vendors like Cisco and Rockwell provide the gear, he said, the telecommunications companies will build the networks needed to support a growing, connected Web of machines and devices.

Parker stresses that he does believe IoT will be widely deployed in coming years, but he doesn't see massive IoT deployments being funded by the average manufacturer. Proof-of-concept projects, small test implementations and incremental expansions into the IoT are the more likely path for such companies, he said.

When it comes to determining if the IoT is a good fit, Greenbaum suggests that manufacturers look no further than their own shop floors. "Most manufacturers already have these intelligent devices in their factories and logistics networks," he said. "But before you jump into [IoT], figure out the top two use cases that would drive the investment and ensure that future investments keep it going. This will optimize your asset management."

Follow SearchManufacturingERP on Twitter @ManufacturingTT.

Next Steps

Find an introduction to IoT technology

Learn about cloud's role in IoT

Read Cisco's predictions for IoT adoption

Read how IoT connectivity was a B2B effort for pool pump app

Dig Deeper on Internet of Things (IoT) in Manufacturing

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Cole is spot on in arguing that IoT has generated much hype but less use in prime time. At the MIT CIO Symposium, experts said much the same: https://bit.ly/1ou8j5m
The fitbit is a real, valuable, iOT device. So is the iPhone and other smart devices. Beyond the running/exercise/sport angle, the iOT is full of potential - but so far it seems to be mostly potential. My guess is real capabilities will take 10 years to read mainstream - and even then, I'm not sure what it will be. Maybe my doorbell will text me when someone rings it. We'll see.
Here's a simple iOT device: The smart thermostat. That is actually a thing. How many more devices are potentially out there that are real game-changes of that magnitude? I really don't know.

If iOT gets much cheaper tho, we could have a gas can that knows how often I mow and texts me when it was running low. But shouldn't I have know that the last time I filled up the lawn mower? 

If the problem is "i am lazy", texting iOT devices telling me to do work won't help.
One of the biggest obstacles that IoT needs to overcome before it reaches mainstream will be to establish a single security standard. The ideas are there, and the tech is there to implement them in most cases, but competing standards are really slowing adoption because people don’t want to get stuck with a Betamax equivalent  instead of VHS.