No IoT ‘Killer App’ for consumers but a giant opportunity for Industry 4.0, Summit hears

When public speaking, start with a bang they say. It’s advice that clearly wasn’t lost on Ben Salama, managing director and Global Connected Operations lead at Accenture Mobility, writes Jeremy Cowan.


Dusseldorf, Germany. September 9, 2015 — Salama doesn’t believe there is a ‘Killer App’ for consumers in the Internet of Things (IoT), instead Accenture is focusing on the US$12 trillion opportunity (Source: Gartner) presented by the Industrial IoT.

In a slide called “The Industry 4.0 Opportunity” he declared that the IIoT will bring new economic growth, reinventing sectors that account for almost two-thirds of world output. “According to Gartner,” says Salama, “manufacturing and healthcare are expected to share 30% of the economic value-add by 2020.” If they’re right those sectors alone will see a financial uplift of $3.6 billion.

Before we all break out the Bollinger and rush to buy shares in manufacturing and healthcare businesses, Salama cautions, “That means a lot of network traffic through the cloud. That means a lot of specific use case applications. It means Vast Data.” It is simply too much and too expensive to transport it all, so you can expect more data to be handled at the edge of the network.

Ben Salama of Accenture Mobility
Ben Salama of Accenture Mobility: Product Makers to Service Providers

Salama then described how many manufacturing businesses that Accenture works with are changing from Product Makers to Service Providers. Take the case of a tyre company, let’s call them Michelin (because M2M Now reported it was them in February. See: Digital technology hits the Shop Floor in the 4th Industrial Revolution), that now offers enterprise customers Tyres-as-a-Service. Instead of just supplying the finished rubber, the company is able to monitor tyre wear, to advise users on tyre rotation, tyre wear, and ways of optimising efficiency. Customers get a better service, longer lifecycles, and better tyre performance while Michelin gains customer loyalty, and a wealth of information about real world tyre usage and performance that informs its marketing and research & design. The same service revolution is being applied to businesses in various sectors.

Looking at the automotive sector, Salama said, “A car OEM client can tell owners when to bring their car in for a service. But they also know how a vehicles’ been driven, where and when. The data on fuel status and location alone would be useful to fuel supply businesses like Shell, but I won’t oversell the industry’s progress on this.”


‘You pays your money and takes your choice’

Car makers take different views on handling automotive data. The event organisers, M2M Alliance, had managed to bring together speakers from BMW and Tesla whose organisations adopt contrasting stances. Uwe Kruger, head of Teleservices at Aftersales Business Management, BMW Group said, according to McKinsey there were 84 million internet-connected vehicles globally in 2014. By 2020 the analysts expect this to reach 290 million vehicles, offering services ranging from infotainment, and vehicle management to driving safety reports, and after sales service & customer care.

“All services must be accessible by the customer from their mobile,” said Kruger. Among the factors influencing this functionality are service development, customer expectations (“Just-in-Time services are important, customers have a decreasing willingness to wait.”), technology challenges such as connectivity and lightweight materials, and advanced processes (including urbanisation and remote diagnostics).

“Connectivity is the enabler for remote diagnostics, to prepare the dealer workshop to receive car. And software upgrades become more important, but not all units can be updated over-the-air because of safety and security.” Kruger also mentioned the growing importance of smart home integration with Deutsche Telekom, and smart things from Samsung, including connectivity to a wrist phone in the BMW i3 model.

Stephan Krey, Tesla:
Stephan Krey:  ‘A Tesla is a driving smartphone.’

These new functions are designed to make customers choose BMWs. Inevitably, BMW will – with the owners opt-in – be gathering a lot of data on the users as well as their vehicles. So, it was interesting to hear a different view from the young rival luxury car maker, Tesla. Stefan Krey, is a store manager at Tesla Motors in Germany.

“We update the car’s life,” he said, “we bring updates to the car. You can use iOS or Android to configure your car before you drive, and to check its charging status. This is the biggest challenge facing electric cars – to ensure you can reach your destination.”

Tesla, the ‘driving iPhone’

In the discussion panel that followed, Krey said, “We use data to develop the car, but not for where customers are, when and why. A Tesla is a driving smartphone, it’s a connected device, a driving iPhone.”

Panel moderator, Achim Himmelreich, vice president of BVDW eV, pointed out that today fewer young people want to own a car, “they just want access to one. How will this change the market?” he wondered.

Said Kruger, “We see this shift. There’s big demand for these services and BMW wants to be at the front with Connected Drive services. It will be a shift over a generation,” he added.

Himmelrreich asked, “Will new revenue streams come from new (vehicle) screens?” Tesla’s man shook his head disapprovingly, but another panellist Bjorn Bunte, of CETECOM interjected, “It’s a retail store even now, advising you where to buy fuel, or find a restaurant.”

Kruger didn’t disagree. “It (the car) will be one of the biggest data hubs in the IoT environment. It’s a good way for customers to use data from the car and screens to support their life.” It appears BMW take the view that it will use all data, if it can help customers and enable BMW to improve its services. Tesla, on the other hand, will use only vehicle data and only for automotive purposes.

This discussion echoed a comment by Magnus Melander, founder of Swedish M2M Service Enablers (SMSE), while moderating one of the discussion panels on Day One, who reported that 50% of all Volvos are now equipped with the ability to provide an online vehicle pre-heating service to warm your car before you drive it. Said Melander, “There’s far more revenue (in this service) than the value of the components suggests.”

Energy and Mining

In the afternoon, Dr Thomas Goette, CEO of GreenPocket GmbH, showed the wide range of energy management services available today. There is energy transparency for consumers, energy saving encouraged by Opower’s gamification and use of social media, smart heating controls & air-conditioning, smart lighting, automated security responses, and even a “Standby Killer” which switches off unused devices that continue to use energy in standby mode.

Komatsu's Alexander Hochgurtel and Jens Klopmeier on the road to Mining 4.0
Komatsu’s Alexander Hochgurtel and Jens Klopmeier spoke on autonomous vehicles and the road to Mining 4.0

A dynamic double act by Alexander Hochgurtel and Jens Klopmeier from mining equipment maker, Komatsu, gave delegates an insight into the autonomous future of mining. Who knew there are so many steps on that road; Manned operations, Assisted Operations, remo0te control, and in about five years’ time Tele-Remote Control. Then we can look forward to semi-autonomous and fully autonomous mining in 20 years, before we reach Mining 4.0.

From the GSMA, Svetlana Grant project director, Future IoT Networks, Connected Living Programme, showed how different IoT is from traditional mobile services. She pointed to the vast range of new devices, the new business models, global distribution and managed services, new revenues from value-added services, and the permanent insertion of SIMs (subscriber identity modules). Credit to the cellular-backed GSMA too, for drawing attention to the growth of Low Power Wide Area solutions, which it expects will support 2.7 billion new devices by 2020.

To protect that we heard from Laetitia Jay, VP of M2M Solutions & Services at security specialists Gemalto. Echoing comments on the previous day’s panel about Appropriate Security not Maximum Security, she urged delegates to protect what matters, where it matters. For that you need strong authentication. Only Trust will build smart infrastructures, devices, data, networks, and ecosystems.

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