We have been hearing about the Internet of Things (IoT) for several years now – in fact, the word IoT was used for the first time in 1999 by technologist, Kevin Ashton. Twenty years have passed since then, and many countries have already started with projects to implement IoT in their cities – the emergence of so-called “smart cities”. However, in Latin America progress has been slower than in other parts of the world. In this context, we were fortunate to attend the IOT Innovatech congress, held for the first time in the region, in Santiago, Chile. The event attracted over 1,300 attendees. In this article, we want to share what we learnt from the event, including the current state of IoT in Latin America, the challenges and the opportunities.
First of all let’s define IoT. It’s important to do this because the concept may vary slightly depending on who you ask. But basically, it’s an extension of the internet to simpler things (i.e. sensors and actuators). Its main objective is to allow people to interact with the physical world as if it were the virtual world. So, when you talk about smart cities, smart offices or smart houses, you are referring to several applications of IoT in combination with other technologies such as machine learning, big data, and image processing.
Now, you should be wondering, why is it now garnering so much attention? After twenty years? One of the main reasons is that several trends have converged. New technologies including artificial intelligence (AI), machine learning (ML), big data and cloud are now within everyone’s reach. Device costs have fallen down to a few dollars. Communication network coverage has taken the internet to almost every spot in the planet, while communications costs are lower than ever before. This has made it possible for companies of all sizes and sectors to invest in IoT – producing a major increase in investment in just a few years. As one presenter at the event noted, IoT investment, in just a couple of decades, has already reached a level that took military defense almost four centuries.
In addition it’s worth highlighting the focus on sustainability, and that many of the most successful IoT stories are tightly related to the objectives of sustainable development. As an example, by 2040 one third of global energy consumption will come from buildings – smart grids promise to reduce this amount by 20%.
Despite the benefits that IoT can provide, enterprises can struggle to implement it. 75% of IoT projects fail, of which 60% never leave the testing phase. This is due to several barriers:
- A lack of established standards and technologies
- Business leaders and digital technology experts often do not share the same vision
- There are not enough trained people
- Planning takes a lot of time
- Projects tend to be isolated from other solutionsThere is often a lack of interaction between ecosystem actors. For example, governments may not talk with IoT experts, businesses don’t interact enough with academics.
To overcome such barriers, there are several options. These include having governments rely more on the private sector to develop technology; generating direct and constant communication between different ecosystem actors; amd developing an integral strategy to prioritize the scalability and impact of initiatives. But the most important action to take is inside specific companies. Let’s remember the concept from “Lewin’s equation”, which states that “behaviour is a function of the person and his or her environment”. What this means, is that companies in Latin America have to start adapting themselves to upcoming changes (such as new business models, offering solutions as services and not as products).
From a technological perspective, there are currently three core challenges with IoT: Communication, processing and security. Let’s examine each of these in turn.
Communication issues as the number of connected things explode
Communication has been handled by gateways that transport information from and to things. Such gateways are mid-powered devices (e.g. smartphones, laptops, tablets) that talk to things with short-range low-power technologies (WPAN) such as Bluetooth Low Energy (BLE) or LoRa, and with the cloud using WLAN technologies (e.g. GSM, WiFi).
However, as we are expecting to have between 30 to 50 billion connected things by 2020, this will potentially cause a big bandwidth bottleneck. Just to put this number in context, 1,000 sensors generate around 2.2 GB/s, and 5G technology only supports 1GB/s, while optic fiber (single channel fiber) supports 120 GB/s. In addition, servers will have to process all that information fast enough to provide (near) real-time actions. Thus, we need to manage the communication and processing differently by applying technologies that support fog (edge) computing. Processing at the edge of the networks will reduce the energy and bandwidth consumption allowing information to be transmitted only when they matter. Moreover it will reduce the load on the servers.
IoT will multiple security concerns
The other main challenge is security. This is less because IoT brings new challenges, but rather because it will multiply existing security issues. Instead of having just a few individual accounts (e.g. social networks, bank) exposed, we will potentially have our whole environments (houses, offices, health monitors) open to the network.
If we don’t start improving our practices for security now, the world will become a playground for cybercriminals. Best practices around data involve ensuring its availability, integrity and confidentiality. For example, sometimes cybercriminals are not interested in the data itself, but in stopping its availability with denial-of-service (DoS) attacks. Hence, if you don’t include security as a core part of your business you are opening yourself to significant risk. Remember that in Latin America internet users suffer an average of 33 attacks per second according to Kaspersky.
Conclusion: IoT is still maturing
While IoT continues to mature, it faces several challenges to reach its potential. Ultimately, it will be for private enterprises to drive wider adoption in the region. Enterprises need to start preparing a system to allow people to innovate, to build and shape ideas. Then, they need to realize the importance of working together with governments and academia to solve everyday problems. Another important aspect is that we have to stop creating small isolated projects and start bringing everything together into comprehensive solutions. We have to understand that the power of IoT lies in the data, which has to be shared in order to allow developers and companies to start building the IoT ecosystem.
Last but not least, we have to again mention security. Too many software companies in Latin America don’t focus enough on security until something happens (i.e. DoS attacks, man-in-the-middle attacks) which must urgently change. And here we are not talking anymore about one or two accounts per person, we are talking about billions of devices that are dispersed around the world. These are devices that are the basis of smart cities, homes, and industries.