IoT: from smart bulbs to advanced production technologies

If you ask people on the street what the Internet of things is - every hundredth, if not the thousandth, will probably reveal the definition. “Smart home”, “smart refrigerator”, “smart vacuum cleaner” or “socket” - everyone has heard about this, but few know how everything works. And the topic is not new at all.

Let us recall 2010, when everything around us was flooded with advertising banners and articles about cloud storage, PBX and other amenities that greatly facilitate life. There was a new technology, and it was necessary to teach people how and why to use it.
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Now no one needs to explain what a “cloud” is in IT. But about the Internet of Things (Internet of Things, IoT), many still have a lot of questions. Does this concept include laptops and smartphones? How is automation different from IoT? How can a small company or start-up start their own IoT project?



#tceh, FRIA and StartTrack gathered market participants at the meeting “Early Birds: IoT Startups”, where experts Alexander Belotserkovsky (Microsoft) and Andrey Bezrukov (GS Group) told about the latest trends in the Internet of things.

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Alexander Belotserkovsky, an expert on strategic technologies Microsoft

The Internet of Things begins with things

These include smartphones, laptops, tablets, and other Internet-connected devices and information that accumulates when using them. There are not many companies that store user data for a really long time — not a year, three or five, but at least 20 years. It is in these arrays that the future of technology lies. To understand how it works, it is worth remembering how it all began.
The first IoT device appeared 20 years ago at the Massachusetts Institute of Technology, where the vending machine was connected to the Internet. The next 15 years about the Internet of things remembered from time to time, but it did not reach some kind of active actions.

What has changed and gave impetus to the rapid development of the Internet of things?

• Significantly reduced the cost of components. Manufacturers are working, trying to make them even cheaper, and the choice is even more.
• Communications also continue to fall in price. By the way, in Russia with the penetration of the Internet, things are pretty good, even in comparison with many other countries, which increases the opportunities for the development of IoT.
• The data processing process, which includes many steps (storage, processing, analytics, etc.) becomes more accessible. A key innovation is the emergence of cloud technologies, which provide virtually unlimited possibilities for storing and processing data.
• The proliferation of smartphones has created an ecosystem to manage various devices and platforms, and the mobile Internet - the ability to remotely access devices.

How is the development cycle in the field of Internet of things?

The basis of any IoT solution is sensors and software for managing and processing data. The user presses the button and performs the action. This data enters the repository and becomes the basis for machine learning within the framework of the platform. For analytics and visualization of Big Data there is a huge number of solutions - Microsoft has Power BI. The received data is sent to the sensors as feedback, and the cycle begins anew.

Large IT corporations, in particular Microsoft, provide platforms on the basis of which other companies (including start-ups) can create solutions for end users or their own platforms. This is one of the most promising areas in IoT: according to McKinsey, by 2020, b2b solutions will generate 70% of the market. And the market IoT, according to Gartner, will reach $ 1.7 trillion.

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Andrei Bezrukov, Strategic Marketing Director, GS Group

Russia may well become a platform for the production of IoT solutions that are in demand both domestically and around the world, primarily due to one of the world's best telecommunications infrastructures built in recent years.
Moreover, in Russia there are now quite a lot of unloaded production capacities. Given the devaluation of the ruble, production in the country at a cost comparable to production in China. True, the infrastructure lags far behind: there are stories of Russian companies that were trying to establish local production, but in the end it turned out to be easier to turn to the Chinese plant Foxconn. Nevertheless, there are prospects.

What to produce?

Worldwide, the production of IoT solutions is divided into two categories.

• Non-production solutions are b2c devices, such as smart watches or smart homes, as well as b2b solutions: smart farms, smart cities, smart hospitals, and everything else smart.
• Production solutions are more complex platforms for business and production process management. What Rostelecom is currently promoting under the name “Industrial Internet”, or solutions that in Germany are the basis of the Industry 4.0 approach, in the USA are Advanced Manufacturing systems.

Market trends

Experts disagree on which of these two types of IoT solutions will dominate. But there are several general trends in the development of the Internet of things market.

• Data security on the Internet of things (IoT security) is an important and undervalued area. Today, 85% of developers bring to the market devices with obvious “holes” in the security system. Although a good crypto processor, compatible with other parts of IoT devices, costs only $ 1. At the same time, every fifth user applies his personal data when working with IoT solutions. Securing this data is a key trend on the Internet of Things for the next five years. Already in 2016, the venture capital investment market in IoT security can reach $ 400 million. It is not necessary to produce cryptoprocessors — you can engage in infrastructure or produce “secure” software.
• Analytics. This direction is especially important for complex production systems, such as at the Toyota plant, where data is collected literally at every stage of the production cycle. What to do with this data, how to collect and use it? These questions must be answered by analytical solutions for IoT.
• Management of devices and networks of devices depending on the type and configuration of the necessary information. The data will influence how a particular device is configured and determine how it works.
• The development of technologies based on two factors - reducing the cost and energy consumption, on which the demand for local area networks and networks with wide coverage depends.
• Development of processors and operating systems for IoT. In the market of processors for the Internet of things is now almost empty, there are few truly high-quality and affordable solutions. Require 8-bit processors. After 2019, most likely, the standard will be 32-bit processors. As for operating systems, they are, of course, produced by IT giants. Microsoft, for example, has Windows 10 for IoT devices. But there are other players, less known and large.

Monetization and implementation of ready-made solutions

It is important not only to invent a platform and create a prototype device. The main thing is to find a working business model. It's not so hard to create smart kitchenware. It is difficult to think of a way to integrate it with consumer brands in order to monetize the product.

For example, “smart home” systems can be sold through Smart TV. Surveys of advanced pay-TV consumers show that 28% of them are ready to install Smart Home. Apparently, because the new technology is built into the already familiar interface. The same smartphones have gained popularity due to the correctly selected interface - the touch screen. For Smart Home systems, voice control can be such an interface. The interface is an important driver for the growth of the IoT market.

According to the results of global international research, IKEA can become the market leader in smart home solutions, gradually building new devices into familiar household systems. At first, instead of the usual light bulb, the buyer will select the “smart” one, then connect it to the TV, and gradually the whole house will become overgrown with IoT devices. Such a development of the market “from the consumer” in this case is better than the imposition by corporations of ready-made and yet incomprehensible systems to the user.

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Early Birds is a joint event of #tceh, IIDF and StartTrack, where, in a business lunch format, investors and entrepreneurs talk about key trends in business and IT. In 2016, Early Birds discussed instant messengers and bots, trends in EduTech and FinTech, IT technologies in medicine and media, information security. And the next topic is IT-solutions for transport and logistics . The meeting point is the New York cafe in the Silver City business center on Serebryanicheskaya Embankment, on Tuesdays at 9 am.