Organizations need to focus on security and standards to reap the rewards of IoT

modern city diorama and wireless sensor networkBy Phil Beecher, Wi-SUN Alliance

The Internet of Things (IoT) is helping to reshape the world in which we live. But while many think of it in the context of devices like smart watches and connected cars, the reality is that organisations are investing billions in IoT systems to improve business efficiencies and productivity. Gartner claims that over a third (37%) of the 8.4 billion connected “things” in use globally by the end of 2017 will be implemented inside companies.

The Wi-SUN Alliance recently undertook in-depth research among IT leaders in the UK, US, Sweden and Denmark to find out more. While Oil & Gas and Utilities firms are leading the way in terms of IoT projects, there are some roadblocks. To stay one step ahead of the competition, they must focus on technologies which offer maximum security and performance alongside support for open interoperable standards.
The research looked at IoT in relation to smart cities, utilities and industrial IoT (IIoT) initiatives. The IoT utilities sector could be worth as much as $15bn by 2024 while in smart cities, it is predicted to reach a staggering $147bn by 2020, and IIoT projects could hit $195bn by 2022. Over half of the IT leaders who are investing in IoT already have a fully implemented strategy, while a third are rolling one out.

State of IoT strategies

With a long track record of using SCADA and ICS platforms to drive business and operational efficiency, Oil & Gas firms are most eager to embrace IoT, with 88% considering enablement as a priority. Utilities are not far behind, while over three-quarters of firms investing in IoT say it’s a top priority this year. One reason for this growing interest in IoT is the fact that it plays into several other key areas such as IT automation, big data analytics and organisational connectivity.

Power providers see it as a great way not only to improve safety and quality of life for citizens but also to improve internal efficiencies and service reliability.

Take Oklahoma Gas & Electric, which has deployed a robust IoT network, helping to reduce operational costs, lower emissions, minimise the number of service vehicles on the roads and empower consumers to manage their own energy supply. The beauty of the firm’s expandable IoT network is that it had also been used to connect 250,000 LED street lights — improving service levels, reducing energy consumption and accelerating resolution of outages.

Florida Power and Light (FPL) has used advanced metering infrastructure (AMI) and automated feeder switches (AFS) to boost resilience in the face of frequent storm-related outages. The company says it avoided 118,000 outages and restored power within two days to 99% of others affected during Hurricane Matthew.

Such initiatives are not just confined to North America: smart lighting projects, for example, can be found all over the world, in cities as diverse as Glasgow, Paris, Copenhagen and London.

While the benefits are potentially huge, there are also some challenges potentially holding up deployments. Some 90% of IT leaders have had problems implementing their strategy, with over a third claiming to have encountered “extremely” or “very” difficult challenges.

importance-of-iot-technology-characteristics-1Security is perhaps unsurprisingly the biggest potential roadblock to IoT projects, with over half of respondents citing it. Cyber attacks are among the top threats for power and utility companies, and many lack the skills to address the risks. Add to this the eye-catching news headlines warning of nation state attempts to target the critical infrastructure sector. It is widely believed that Kremlin hackers were behind sophisticated attacks on Ukrainian power suppliers in December 2015 and 2016 which led to blackouts for hundreds of thousands of innocent customers.

Half of respondents in the study want proven security with multi-layer protection and continuous monitoring to protect smart city IoT, while 44% say the same about smart utilities.

The challenges don’t end there however. A third of IT executives say that funding is a major barrier to IoT projects, while the same number point to a lack of commitment from higher up the organisation. Slightly fewer (30%) claim the Board’s lack of understanding of the benefits of IoT is getting in the way of progress.

It’s more than likely that these are related. If IT leaders can get better at communicating the business benefits of IoT to senior members of the Board then they stand a great chance of turning things around. Once the C-Suite hears the success stories from competitors, they will be more willing to release those all-important funds.


Drivers for IoT implementation

We also looked at the criteria by which IT leaders evaluate IoT technologies for use in smart city, IIoT and utility-based projects. Surprisingly, network topology is the number one criterion. The majority favour a combination of star-based networks and mesh networks — the latter being particularly resilient to cyber incidents, such as signal jamming and therefore well suited for use in critical national infrastructure (CNI).


Network performance is also high up the priority list, illustrating the continued importance of latency and bandwidth to effective IoT systems. Next is standards — a key requirement for over half of IT bosses. In fact, 45% want open standards for smart city solutions, while a similar number say the same for utilities projects. Open standards are vital to keeping costs down and choice of products high for IT leaders. They promote performance, security and reliability, while backwards compatibility helps ensure that legacy assets don’t get stranded.

According to the survey, US firms appear to be most mature in their approach to IoT, with two-thirds (65%) claiming to have a fully implemented strategy in place, versus 47% in the UK, 44% in Sweden and just a quarter (24%) in Denmark. It’s clear the rate of IoT adoption varies by geography, as it does by industry. The UK seems to have the most trouble at present, with just 3% claiming their projects are completely challenge-free.

The most important thing to remember is the end user. Power and utilities firms looking to utilise IoT technologies to drive internal and external benefits will only achieve success if they get the all-important consumer on board. This makes awareness-raising and education programmes vitally important to sell customers the benefits of any new IoT project. An eye-catching new solution might have the potential to transform the customer experience, lower costs, improve efficiencies and drive greater business agility, but if your customers aren’t with you, all that planning and investment may be in vain.

We have now entered the IoT age, but unlocking real value from these technologies requires more than blind investments in technology. Those organisations most likely to pull ahead of the competition will be the ones that focus on security and standards to drive success.

Phil Beecher is the President and CEO of the Wi-SUN Alliance

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