The Internet of Things (IoT) is on course to transform businesses and create new revenue opportunities — is your organization ready to exploit it?
It’s a recurring topic of interest that crops up frequently during my conversations with business leaders in the service provider industry. As networked devices become more pervasive, operators worldwide not only need to update their infrastructure to accommodate bandwidth-intensive content and applications. Increasingly, they need to explore how to make a successful (and profitable) transition to new IoT-enabled business models and boost ARPU.
Consider our findings in the latest Cisco Visual Networking Index (VNI) report, where it was forecast that M2M modules in Asia Pacific will increase at 19% CAGR over the next five years to reach 5.2 billion connections by 2020.
For carriers and service providers, the growing M2M adoption across business verticals such as retail, healthcare and manufacturing means that new models of billing may be required to effectively monetize IoT services. To tap on the growing revenue opportunity, service providers also need to consider how best to roll out IoT services to support a wide range of applications. Data storage, at the edge or in the cloud, and advanced analytics capabilities will be essential to fully realizing the potential of the IoT for consumers, governments and businesses.
Here, we take a closer look at two key IoT/M2M vertical developments that are opening up many new possibilities for forward-looking service providers:
The Dawn of Smart Cities
Asia Pacific is home to some of the world’s fastest growing urban cities. The likes of Singapore, Tokyo, Guangzhou and Adelaide are well on their way to smart city transformation, leveraging digital innovation to addressing urban challenges such as traffic congestion, pollution and waste management.
Or consider the smart city developments that are taking shape in Songdo, South Korea, recognized today as one of the most eco-friendly and technologically advanced cities in the world.
A constant influx of information allows for the city’s infrastructure improvements; for instance, sensors in Songdo monitor temperature, energy use and traffic flow to achieve a lower energy footprint. One of the city’s future-oriented highlights is a living lab dubbed the IoT Cube, where businesses and startups can pilot their developing solutions on the street. Cisco infrastructure was included in the IoT Cube, including Wi-Fi, fog computing, and security solutions.
Indeed, evolving network technologies have a significant role to play in how these future smart cities in Asia operate.
From public infrastructure (automated street lightings, enhanced energy distribution) to smart video surveillance for improved public safety, the latest IoT systems are designed to unlock actionable insights from a wide range of connected devices and data-collecting sensors.
From a service provider perspective, the first step is to build up the network capabilities and technology expertise needed to foster smart city development. The increased use of M2M applications such as telemedicine and smart car navigation systems requires greater bandwidth, lower latency and network resources that are easier to manage. Security is another key issue. A layer of enhanced security and intelligence is required for communications networks to adapt to the proliferation of connected devices.
As smart city initiatives take shape, service providers need to work together with different stakeholders across the IoT/M2M ecosystem.
We see a great potential for service providers to move up the IoT platform stack to unlock new sources of value and achieve revenue uplift. Yet, many operators in this region are more focused on their core business of providing robust connectivity. To bridge the IoT gap, operators have to create new sources of expertise beyond their existing network capabilities – and gear up for a brave new world of connected cars, smart factories and M2M applications.
Putting Industry 4.0 in action
The IoT is at the forefront of the fast transforming manufacturing sector, through the combination of smart sensor and network technologies. With a large (and growing) manufacturing base, the Asia Pacific region is expected to see a high adoption of industrial IoT (IIoT) technologies — as manufacturing hubs such as China and India embrace new Industry 4.0 initiatives to become the “digital factory” of tomorrow.
M2M applications are crucial for manufacturers to gain better data insights as well as improve processes and outcomes through industrial automation. Here, service providers have a vital role to play in extending reliable connectivity across diverse factory environments, and collaborating with end customers to expand their IoT deployments.
Cisco’s approach is to help service providers deliver integrated IoT solutions and build up new horizontal capabilities to continue driving the Industry 4.0 momentum. In the manufacturing sector, we see many of the key technology considerations being made around edge devices and networks.
For industrial M2M applications such as remote monitoring, manufacturers will require a combination of different levels of connectivity, along with the capability to carry out computing both at the edge and in the cloud. As such, service providers need to be adept at integrating a mix of capabilities to provide a scalable managed services platform — while ensuring security across the network, cloud and applications.
Manufacturers can also leverage edge analytics capabilities to uncover faster, more actionable insights. Cisco has developed a data and analytics software that enables organizations to aggregate and analyze data closer to where it is generated, including at the edges of the network. This approach allows manufacturers to better manage their IoT data traffic and make more effective decisions for better business outcomes.
Whether it’s connecting machines for industrial applications or building intelligent networks to make smart cities a reality, I am confident Cisco is well placed to help you develop a strategic approach to keep pace with a new era of connectivity.
You can find more insights into the opportunities and challenges faced by service providers across the region in our VNI Asia Pacific and Japan EBook.