Where is the Internet of things going?

The term IoT (Internet of things) itself appeared a long time ago, in the late 90s of the last century. It was invented by marketers to promote the RFID technology, revolutionary at that time, and the “things” at that time were basically different goods in warehouses and shops, glued with RFID tags. But the term took root, and soon it was “pulled” by almost all M2M (machine-to-machine) communications, including sensors and sensors in traditional SCADA systems.

For the next 10 years, from 2000 to 2010, IoT was half asleep, it occupied its small niche, but no one especially produced it. From 2000 to 2010, the mobile boom was actively rolling, everyone got smartphones, and traffic grew at a pace that both operators and manufacturers were busy developing this new market. But then the crisis of 2008 happened, money became less, it became more difficult to refinance, and the old growth model began to fail. Farsighted industry visionaries began to wonder: what will happen after the era of smartphones? Who will lead the industry, where the main money will be in mobile communications for the year, so to speak, in 2020?

“My dear, here we must run as fast as we can, just to stay in place.
And if you wish to go anywhere you must run twice as fast as that ”.
Lewis carroll

So in 2009, Ericsson published a report in which, among other things, among the remaining 100 pages of useful analytics, he mentioned that, in fact, by 2020 there will be 50 billion connections of smart devices (read, things) to the Internet in the world. Everyone converted it into money, licked it, and somehow immediately liked the idea. They woke up the Internet of things, dusted it off and pulled it back onto the platform with the words: “Meet our future! Soon there will be major cash flows in mobile communications. ”

Indeed, if we soberly assess the prospects of the industry, then there are two facts:

1. telecom operators are increasingly turning into an effective “pipe” for transmitting data that does not belong to them;
2. the main vector of development of the industry lies in the field of intelligent services, and the main money is spinning there today, and not in the "pipes".

And the operators would love to touch this money, especially since the voice services, their main "money generator", are beginning to quickly "eat up" various nimble guys from Facebook (with their WhatsApp), Google, etc. The Internet of things in this sense It looks promising. On its basis, you can create a huge number of different services. Here you have smart buildings and offices, which themselves order their favorite coffee and adjust the climate at the workplace the way you like, and smart construction management, when concrete arrives at the right facility on time, and traffic management, smart farming, and smart safe cities, and housing and communal services, and healthcare, and ... In general, almost any area of ​​human life can potentially be made smart and make money from it. And everyone in the industry likes it.


Figure 1. Estimates of the contribution of IoT to the industry

Figure 1 shows rough estimates of how much money Internetization can bring to the industry. Given that the entire IT market today weighs approximately $ 3.5 trillion, and the communications market approximately $ 1.5 trillion, even by this conservative estimate, the Internet of Things is expected to at least double this money.

But this is lyrics, let's now go down closer to the ground and try to understand why, for the 5 years that IoT has been actively producing, it still has not grown by leaps and bounds and has not taken any significant part of the money indicated in Figure 1 from the market. In our opinion, there are two types of problems that do not yet allow the Internet of things to develop very quickly - technical and ideological. We’ll talk about technical problems a bit later, and now a few words about more fundamental difficulties - ideological.

The fact is that, despite the large flow of information through all marketing channels about the Internet of things, the main business model that this market should work on is still not entirely clear. All the conversations that are heard about the monetization of IoT come down to either the idea of ​​taking money for traffic at special rates, or taking money for the fact that the sensor is connected to the infrastructure, or taking money for a service that is built on the basis of IoT. Because telecom operators are still the main engine of IoT today, it seems that the easiest option for them is to work “the old way”, i.e. take money for traffic or for connecting IoT sensors to the network. But in this case the question arises: how much does it cost to install, to authenticate and conduct this sensor on all operator systems? Will there be a SIM card in it? Or will there be pre-provision in the factory? How much will it cost just to fasten to the system and check the sensor for operability? How much will the billing of such a sensor cost? Ultimately, if you calculate the business case, it turns out that with the current business model, the IoT story begins to “pop up”, according to various estimates, somewhere at $ 30-40 per year ARPU (where the U-user is the same sensor, which is connected to the system).


But at such prices, no one will buy and install sensors in bulk! This is the fundamental ideological problem of the Internet of things today. And until the new business model of the IoT service is rolled in, mass deployment will be hindered.

“What needs to be done to make the cow eat less and give more milk?” Feed less and milk more. ”
Folk wisdom

What are the options for overcoming this situation now? According to the classics, cut costs and look for additional income. In order to minimize costs, it is necessary to simplify sensors as much as possible, to throw out all unnecessary from them and to simplify the processes of their processing in operator systems as much as possible. For example, to take money upfront for connecting to the IoT service, without reference to the period, for the entire life of the sensor (s). Another part of the story - revenue growth - is traditionally more complex for telecom operators. It is complicated because it entails the execution by operators of the Application Provider function that is not characteristic of them, where, for example, in their public cloud an intelligent application will be launched to manage specific areas of the national economy (city parking lots, housing and communal services, smart buildings, etc.) and leased on certain conditions.

But there is no silver lining. Just here and now there is a place for flexible and nimble people who are ready to quickly spin on small profits and do innovative projects not so much for money, but for interest and perspective.

Now about the technical problems that also prevent the Internet of things from developing rapidly. With technical problems, in a sense, it's easier, because it is approximately understandable how they should be solved, and one can more or less accurately predict what the final results can be. We briefly list the main difficulties that the implementation of IoT projects faces:

Problems with sensors

• Existing things, as a rule, do not have sensors
• Different communication interfaces (ZigBee, 6LoWPAN, PLC, RS-485, Modbus, BACnet, HART, etc.)
• Weak compatibility between different solutions

Communication problems

• A huge number of connections from sensors
• Many different scenarios ( Video Surveillance, Industrial Control, Autopilot, Smart Metering, etc.) for applications with different environmental requirements with different environmental requirements

Problems with extracting value from data and monetization

• Deep understanding of the subject area
• Saving and processing data
• Security

All the above difficulties prevent you from starting IoT, without sensors in existing things and compatibility between different protocols, the IoT concept will not work. But there is a problem without which it is fundamentally impossible to move on. This problem is SAFETY. So far, a single, unified approach to ensuring security in the world of the Internet of things has not been developed. All approaches to security offered by different companies are based on old principles and do not solve all the problems of the Internet of things. And if they decide, then it becomes so hard and expensive that in the end no one needs it. Why is this a key issue? Because the scope of the Internet of things is extremely sensitive to any type of security breach (integrity, confidentiality or accessibility breach). Imagine, for example, that the hacker gained access to a system that collects data and controls pacemakers? Or, for example, he broke into the kettle and then turned it on empty ... You can come up with a lot of apocalyptic pictures of how the Internet of things destroys someone’s separate life or the whole world. We advise you to look at this topic "Black Mirror", the 6th episode of the third season. There, in paints, it is shown how a story with a violation of confidentiality and accessibility of a system with a mass connection of electronic devices can turn out. So when it comes to managing life support systems, the word “SAFETY” should come first. how the Internet of things destroys someone’s separate life or the whole world. We advise you to look at this topic "Black Mirror", the 6th episode of the third season. There, in colors, it is shown how a story with a violation of confidentiality and accessibility of a system with a mass connection of electronic devices can turn out. So when it comes to managing life support systems, the word “SAFETY” should come first. how the Internet of things destroys someone’s separate life or the whole world. We advise you to look at this topic "Black Mirror", the 6th episode of the third season. There, in paints, it is shown how a story with a violation of confidentiality and accessibility of a system with a mass connection of electronic devices can turn out. So when it comes to managing life support systems, the word “SAFETY” should come first.

Another important problem at the intersection of IoT technology and ideology is the problem of extracting useful information from the data that the sensors will transmit. The problem, rather, is not in the technique of the issue, effective algorithms and methods of data mining have existed for a long time. The question is, WHAT data should be collected and HOW to monetize it then? Actually, this is again a question of the business model, but at a different level - at the application level.

So what does the Internet of Things end up with today? What parts does it consist of and who does what in this area? Globally, the Internet of things consists of three parts: smart sensors, network infrastructure, and a platform where information from sensors is processed.


Figure 2. The Internet of Things - From What

The most expensive part of smart sensors is the chip. And for the Internet of Things to become widespread, the chip needs to be as cheap as politeness. According to analysts, the IoT sensor should not cost more than a few dollars, despite the fact that the bulk of the cost of the sensor is the cost of the chip.

For data to flow from sensors to the platform, network infrastructure is needed. And the requirements for it are also quite certain. Given the specifics of the sensors (on average, the need to transmit several hundred bits per minute and 95% of the time in standby mode), the network requires: 1) ultra-low bandwidth; 2) ultra-low overhead on different service protocols. At the moment, traditional mobile technologies are poorly designed for this, as they carry too much official overhead. This makes the end devices, firstly, relatively expensive, and secondly, consuming a lot of energy. Therefore, to implement the Internet of things, special technologies have been invented that have a low overhead and allow the creation of sensors that consume little energy. Conditionally by distance, where sensors from the gateway / base station can be located, technologies can be divided into “long” - with a distance to the sensor, measured in kilometers, and “short” - with a distance to the sensor hundreds of meters. Both those and other technologies solve problems with the energy consumption of sensors, but require fundamentally different approaches to building infrastructure for the Internet of things.

“All are equal, but some are more equal”
J. Orwell
Folk Wisdom

Typically, equipment manufacturers focus on different parts of the IoT infrastructure or on a specific technology, such as a specific transport for the Internet of things. In this regard, Huawei is different from other vendors and develops products for all three infrastructural levels of the implementation of the Internet of Things, and does this on the basis of several different technologies.

The company has developed its own chip, which consumes little energy, is cheap, and under which a specialized software platform (LiteOS) is implemented. Huawei has the entire infrastructure for collecting and transmitting data from sensors, starting with mobile networks in all its forms and ending with wired technologies such as Ethernet and GPON. In addition, Huawei has a platform for collecting, storing and processing big data - the very place where added value is born in the history of the Internet of things.


Fig. 3 Levels of Implementation of the Internet of Things

We will tell a little more about the second, network, level. As mentioned above, at the access infrastructure level, there are two actually competing approaches to network implementation - based on “long” or “short” technologies. Option No. 1 - use the transport of a mobile operator, which, as mentioned above, has implemented specialized technology (NB-IoT, for example). But with this option, there are still certain questions:

1. specialized IoT transport in mobile networks is just starting → until not everywhere and not everyone has it;
2. the user of the service is tied to the infrastructure of the operator, with a business model of sales of this service that is not yet clear → poorly predicted operating costs (see above), many are afraid of this.

Option number 2 is to build your transport infrastructure under IoT without a mobile operator, for example, based on "short" technologies like ZigBee and 6LoWPAN. Such access infrastructure, “sharpened” for the performance of one specific service, is much easier and simpler than the mobile operator’s network, designed for a wide range of services. To implement its transport infrastructure under IoT, there are basically two things needed:

1. specialized IoT-gateway, which will take on the connection from the sensors;
2. A controller that manages a network of gateways and aggregates information on itself.

This infrastructure works also quite simply: the gateway collects data from a specific set of sensors, usually collected in a Mesh network. Further, the data collected through the controller is transferred to an application that solves a specialized task, for example, the task of controlling light in a city. In the opposite direction, everything works in a similar way:

• the application, having processed the received data, generates a control signal and transmits it through an open interface to the network controller;
• the network controller through the appropriate gateway sends a signal to the sensor, which executes the transmitted command.

Fig. 4. Example: smart light control

Figure 4 shows an example of how a smart city lighting management system can be implemented without the participation of a mobile operator. Specialized sensors built into LED lighting lamps form local Mesh networks using a special protocol (ZigBee or 6LoWPAN). Each such local Mesh network is closed on the IoT gateway, which communicates through the controller with the application that controls the lighting in the city. In the appendix, the whole city is marked into groups of lamps, clearly presented on a map underneath them. System operators set policies for managing light in the city (at what lighting intensity to turn on the lamps, at what to turn off, which lamps are on all night, which turn off late at night, what intensity the lighting should be at different times of the day, etc.).

What are the advantages of such an implementation? The entire infrastructure does not depend on a specific mobile network operator. The service company itself owns the transport infrastructure, controls all operating expenses and can derive additional profit from this. What are the downsides? As usual, the flip side of the pros: you need to maintain the transport infrastructure yourself and do it professionally enough. Otherwise, instead of additional flexibility and profit, there will be additional losses.

In conclusion, I would like to emphasize two points:

• the cost of transport infrastructure is several percent of the total cost of implementing infrastructure projects with the Internet of things;
• for those who do not want to give IoT transport to the side of mobile operators and want to build and manage the entire infrastructure of the Internet of things themselves, today there is a unique “window of opportunity” that closes as soon as all operators launch IoT transport on their networks and finally decide with a business model of the services provided.