Everyone who follows the accelerating development of the technologies associated with the 4th industrial revolution has to face the Internet of Things subject one way or another. Being deeply immersed in the development of various IoT solutions, Indeema is going to share their theoretical knowledge along with the practical experience in the IoT with every interested reader of our blog.
The present post is conceived as an introductory guide to the general aspects of such phenomena as the IoT. Besides, we are going to debunk some misconceptions related to the revenue generation capabilities of the IoT solutions explaining why the Internet of Things matters at the same time. Dissecting the IoT body into the technological levels we will show how all parts and fractions of the IoT solutions interact. The clear understanding of the functionality of each IoT component along with the general IoT anatomy can help to save time, money and efforts of those business owners who are going to create and implement the IoT solutions in their business areas.
The series of the subsequent posts will be dedicated to the practical methods and techniques of creation of a simple exemplary IoT solution basing on the workshops arranged by Indeema’s CEO Volodymyr Shevchyk for the students who learn the IoT in the Ivan Franko National University in Lviv.
Figuring out the value: the multi-level nature of the IoT anatomy
How not to create a better version of the past while trying to incorporate IoT solutions into a company’s culture? It is not an idle problem since the notorious digital transformation hwhere the IoT plays a significant role implies new approaches to deriving value from the advanced technologies. The comprehensive understanding of the true digital transformation capable of disrupting the traditional non-digital spheres is what many companies need in order not to spend their time and money on creating the worthless solutions. The IoT technology is the hype nowadays, but it is still in the geek domain. Having an inner conviction of why IoT is important, some early IoT enthusiasts are trying to grasp what customers need along with what the Internet of Things can do for them at random in many cases. The viable IoT solution is multi-dimensional by its very nature. And this is the stage of understanding from where everyone should start in order to comprehend what it takes to create even a simple IoT solution.
Facing challenges of the future
Before diving deep into the technological layers of the IoT, the more general strategic objectives of using the IoT are worth considering. One of the most popular public opinions about the IoT and the industrial IoT (IIoT) specifically is that the reduction of cost and expenses is the major objective the IoT is aimed at. It may seem indisputable when the Internet of Things review is performed superficially. However, such an approach implies addressing only a part of the problem the IoT is able to solve. Any technological improvement which is implemented in order to reduce cost and expenses is just a better version of the past as we mentioned it in the first sentence of this article. The IoT solution which optimizes some process making it less expensive or more reliable is undoubtedly viable and worth applying. However, this is far from what the Internet of Things is all about since the new technologies should create the new extra value while facing the challenges of the future instead of the past
Recognizing the non-apparent value
Thus, every organization which is going to create an IoT project has to realize what kind of value the project may add. In many cases, the benefit can go beyond the mere financial scope being hardly defined by money. The so-called soft ROI in the form of the valuable customer satisfaction can be the result of an IoT solution implemented as an integral part of the customer support. Sometimes, such a conclusion can hardly become obvious without an understanding of all the layers the IoT consists of.
For example, the analytic layer residing between the IoT hardware and the business management can generate the non-apparent value which is difficult to calculate whatever Internet of Things examples are concerned. Imagine a network of vending machines equipped with a specific type of software collecting data about the seasonal preferences of the consumers. The business insights basing on such analytics can optimize the whole supply chain of the retailer beginning from the improved logistics and up to more grasping commercials appealing to the customers’ expectations in more relevant manner.
The IoT is not beneficial by default
The holistic approach is worth using when the revenue consequence of the IoT solutions is to be evaluated. It may seem that any IoT solution is profitable by default. Many early adopters and the IoT propagators claim that any kind of business process can benefit from the IoT technology whatever solution is applied. With no intention to discourage the IoT enthusiasts it is necessary to admit that such a romantic viewpoint stands far from the pragmatic market reality. It is not enough just to install some sensor-empowered hardware to monitor some business or manufacturing process. It is crucial to realize what to do next with the collected data. For example, when an IoT solution is applied for the preventive machinery maintenance, the sequence of actions entailed by the collected data should include arranging the new optimized inventory and more effective operating mode. Otherwise, the implemented IoT solution would remain purely demonstrative, incapable of improving the maintenance cycles, and therefore commercially meaningless.
Turning the IoT products into a service
How to monetize the data provided by the IoT solutions should not be figured out by the end users only. The creators of the IoT solutions ought to see the potentials of their products in turning their customers’ data into a valuable resource. The collected information can be beneficial for both parties. Moreover, the ability to identify the revenue streams is the only way for a creator of the IoT solutions to succeed in the market. Getting back to the preventive maintenance sector, a provider of the IoT solutions could multiply its profit by sharing the collected data with the third-party entities such as insurance companies or spare parts suppliers who could be interested in that information. Namely the holistic vision of all possible value generating opportunities can transform the Internet of Things into the Internet of Everything in a near prospect. Besides, the creators whose IoT solutions are efficient in optimizing the customers’ maintenance cycles can establish a new revenue-generating service since they do not sell just a product anymore. They sell the increased lifetime.
The IoT anatomy
The happy destiny of any IoT solution depends on both its anatomy and the topology of its deployment. The knowledge of both arrays helps to cope with the diversity of the use cases that belong to the Internet of Things and Services. When it comes to either launching a new product or providing smarter operations, one and the same IoT solution can demonstrate the different efficiency depending on what insights and value the end users are able to derive from the solution. In order to correctly identify the areas of operation, both the creators and the users should clearly distinguish the three main levels of the IoT solutions: the endpoints, the software, and the applications. Such an anatomical dissection can prevent the various IoT functions from confusing that sometimes results in the frustration of the users who mistakenly expect a particular value from the level which cannot bring it in principle.
The level of “things”
This is where the Internet of Things begins. Both the inanimate objects and the live creatures constitute the “things” or “endpoints” level of the IoT. Generally, this level encompasses the physical world where the communication between objects can be arranged. Cars, machinery, and wearables along with livestock, humans, and vegetation can be cross-linked in various combinations through the IoT. The everlastingly moving physical world generates the enormous amount of data each second. What kind of data is worth collecting is the issue upon which the entire IoT industry evolves. Undoubtedly, it is necessary to begin from the data for realizing how the Internet of Things works.
The abundance of traceable data requires selectivity
The contemporary stage of the technological development allows monitoring numerous parameters of the “things”. It does not mean, however, that all of them are worth tracking. The very developers of the IoT are in charge of figuring out what data and for which meaningful purpose can be collected via their solutions. While the pedometer-based wearables can help humans to comprehend the far-reaching outcomes for their health, the similar IoT solution for animals, for example, is hardly feasible since the latter rarely suffer from hypodynamia.
The incongruence between the industrial and the household levels can be demonstrated by the following examples of the IoT solutions.The monitoring system of the electric power consumption at the industrial enterprise can help to reorganize the triple-shift workflow where even 5-10% cost savings allow to increase the total return significantly. The similar system for the household application might be overloaded with the redundantly detailed data of the peak loads or power fluctuations that can hardly be practically useful for the homeowners since the several-percent cost savings would not worth changing their lifestyle. Thus, “the more the better” approach is not applicable when the IoT developers have to decide what data is worth monitoring in every particular IoT solution. Besides, the technological applicability of the sensors can significantly affect the decision making.
The primary endpoints of the “things” level
Location, motion, temperature, radiance, pressure, speed as well as many other parameters can be collected by the sensors embedded in or mounted on the “things”. Sensors constitute the initial endpoint of the “thing” level in the IoT. They collect data and report about the state or behavior of the “things” to the cloud or to the particular middleware in the IoT solutions. Being the primary stage of the moving information within the IoT environment, sensors must meet the requirements of the sensitivity, reliability, and accuracy the whole system expects from them. That’s why the proper selection of sensors is crucially important for the IoT developers. Moreover, the right choice of the most suitable sensors for a particular IoT solution can distinguish the true professionals from just geeks. While selecting the proper sensors the professional IoT developers are able to grasp the whole picture of the upcoming IoT solution where the efficiency and operability depend on how endpoints are connected through the protocols and software. The holistic approach is back in the game here showing the primary aspect of “how to” the Internet of Things requires from the creators.
Agents, actuators, and middleware
The various types of actuators constitute the closest to sensors sub-level by emplacement. However, their function is opposite to sensors: actuators provide control of the “things” in accordance with commands the IoT software sends from the upper levels. Receiving signals from the IoT apps they control and change the state and behavior of the various devices: they drive cameras, open valves, turn off the light and so on. To be precise, actuators cannot interact directly with the IoT apps. The so-called agents or in other words the mediate components are present between the actuators and the cloud as a connecting link. The agents provide the management of both the data to be sent to the cloud and the updates arriving from the software to actuators and sensors. In many cases, the set of agents includes the specific computing devices responsible for the preliminary processing of data before sending it to the cloud. Such a special IoT architecture is applied when the bulk sending of the huge amount of raw information can overload and affect the functionality of a particular IoT solution.
The “things” level does not generate revenue
The “things” level is the brutal physical array of the specific types of the IoT hardware that are quite diverse depending on the particular use cases. This level generates a huge amount of data without adding almost any value to the business which uses the IoT solutions. In many cases, the raw data sent to the cloud by the endpoints of the “things” level requires further filtration, processing, and analysis. It is hardly correct to claim that this level of the IoT solutions does not generate any value at all. Supplying the information to the upper levels the “things” one is potentially capable of generating revenue to the business when the entire ecosystem of the IoT solutions transforms the data into the insights. Nevertheless, the availability of sensors, actuators, and the middleware guarantees neither extra profit nor cost savings to any business unless the whole IoT infrastructure consisting of all necessary levels and components is involved.
The IoT software level
The cloud-based software which receives data from the endpoints is the second level of the IoT solutions. This level is ample with functions providing both the communication between all levels of the IoT and the management of the endpoints. Besides, the software provides analyzing the received data as well as creating the “digital doubles (twins)” of the endpoints. Those virtual versions of the elements residing on the “things” level deal with the apps in order to provide the control over the endpoints. The IoT software includes various management capabilities such as rebooting, configuring, operating, testing, monitoring, and troubleshooting of all connected devices. The data aggregation and storage belong to this cloud-based level as well. To name a few, Microsoft Azure, Amazon AWS IoT, IBM Watson, and GE’s Predix offer the ready-to-use cloud infrastructure where both the storage and processing of the abundant IoT data can be easily executed.
Analytics, operability, security
The analytics provided by the IoT software is based on the machine learning technologies in many cases. They support in turning the statistical data into readable and comprehensible patterns that can help to make predictions and arrange preventive maintenance over the entire architecture of the IoT solutions.
The APIs along with the various communication protocols (HTTP, ZigBee, MQTT, WebSocket, TNSP etc.) provide interoperability of all levels of the IoT solutions as well as the various integration scenarios for the backend, services, and data.
Since the IoT devices transmit data through the Internet, they are exposed to various threats and hacks. One of the most important functions of the IoT software is the security management, therefore. The authentication and access management, software upgrades, and hack prevention constitute the scope of the security challenges the IoT software faces.
The seniority in revenue generation is still in doubt
The software level can be characterized by the “most” word best: the most abundant, the most expensive, the most complicated, and the most important level it is. Nevertheless, it is not still clear whether it can be called the most profitable. It seems the very IoT software generates revenue for the users. However, to state so is equal to claim that the managers generate revenue for a Company. The availability of the other two levels makes the statement only a half of the truth. Besides, the IoT software alone is useless without the endpoints. And what about the third level of the IoT solutions?
The top level of the IoT solutions
The applications level put the users into the play. The apps make the IoT meet the real life where everything collected and processed on the lower levels should result in the actionable insights. The apps read the information coming from the “things” level through the processing of the software level. They also trigger the actuators basing on the commands defined by the users. The third-party services along with the in-house back-ends are integrated with the enterprise dashboards and interfaces operable by the engineers and the other staff members of the end customers whose role in each particular workflow may significantly vary depending on the extent of the automation. The complexity of the apps level correlates directly with the hardware and software IoT solutions applied in each particular use case. The IoT apps are the tailor-made solutions mostly due to both the immaturity of the IoT industry in general and the vast variety of the individual requirements of the end customers in particular.
The proper balance in the IoT development matters
The IoT apps developers always have to balance on the thin verge since their solutions must not compromise the potential abilities of the whole system being at the same time fully understandable by the end users. The IoT developers are often tempted to enable their apps with as many functions and features as possible utilizing all capabilities of both the hardware and software they deal with. As the result of such an approach, the overcomplicated IoT apps occur barely affordable and user-unfriendly.
Dead heat of the level’s race
Namely, the app developers ought to realize which IoT level generates revenue for the end users. And the correct answer to this question is “all three levels do”. Like any other holistic system, the IoT solutions can be divided into levels just conventionally. Despite the importance of the software level and the supremacy of the apps level, they both cannot do without the first physical level of sensors and actuators. This is similar to a human body where each organ is equally indispensable. Another issue is that all levels of every IoT solution should interact coherently. The entire efficiency of the IoT solutions as well as their capabilities of generating revenue depend upon the interoperability of their levels. Maintaining the proper balance between the levels of an IoT solution is the task of the IoT developers
By way of conclusion: let’s get down to practice
Everyone who needs to create even a simple IoT solution should be aware of the levels the entire IoT paradigm includes as well as of the role each level plays. The selection of sensors and actuators, the choice of an appropriate software along with a cloud service, and the development of the IoT apps constitute the process which determines what it takes to create an IoT solution. We will proceed to the actual designing of a simple IoT solution together with the students of the Ivan Franko National University of Lviv who will be guided by Indeema CEO Volodymyr Shevchyk through 3 dedicated workshops as a part of the IoT learning program. Follow our blog posts to know how the simplest fully fledged IoT solution can be created in practice