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Internet of Worldwide Everything

When China Mobile and Nokia demonstrated a platform that connects robots via 5G wireless technology, their deal also underscored the global collaborations that are accelerating the growth of the Internet of Things (IoT).

The proposed integrated robotics system will enable fast, synchronized production as well as a flexible system for manufacturing and productivity. The deployment in China fi ts a pattern.

China, with its consumer scale and production capabilities, has officially established an aggressive IoT agenda. Its current “machine-to- machine” connections represent nearly one-third of the global market and will see a compound annual growth rate of nearly 30 percent through 2020, according to the GSM Association’s latest analysis.

For China Mobile, the world’s largest wireless phone operator, the Nokia deal is part of a larger vision for its 5G activities. “5G will provide the network infrastructure for the China Manufacturing 2025 initiative,” says Huang Yuhong, vice president of China Mobile Research Institute. 5G will enable activities that seem “impossible” today, such as “autonomous manufacturing with massive use of robots,” he adds.

Such connections accelerate productivity, according to analysts, who say that IoT capacity is creating a unified infrastructure that is more efficient than today’s fragmented industrial standards. By using technology that allows devices to communicate via infrared sensors, radio frequency identification (RFID) and other machine-to-machine technologies, IoT developers are building an ecosystem to unleash vast opportunities at the industrial level as well as in consumer applications.

Tim Bajarin, president of San Jose-based Creative Strategies Inc. and a technology analyst, foresees even greater applications as IoT devices expand throughout the enterprise and consumer universe. “Telecom operators will play a key role as they deliver the backbone for most of these connections to the cloud,” Bajarin says. “The most exciting development will be with 5G since it delivers greater bandwidth wirelessly and will enable all types of new and more powerful IoT connections and services.”

Although China’s commitment to IoT ventures is immense, similar initiatives are on fast tracks around the world. Wearables and smart home devices are the most visible aspects, but longerterm infrastructure developments including “smart cities” and machine learning are adding to the IoT global juggernaut. That’s why McKinsey & Co. foresees a $1.1 trillion economic impact for IoT by 2025, including $700 billion in retail (largely for payments and inventory control) and $400 billion for vehicle applications.

Other researchers are equally bullish (see sidebar), but most agree that the IoT agenda is still taking shape, encompassing everything from personal health monitoring systems to industrial machine-to- machine (M2M) integration.

Global Appetite to Get Involved

Cisco’s $1.4 billion acquisition this year of Santa Clara-based Jasper Technologies Inc. exemplifies the escalating IoT opportunity. Jasper has designed a cloud-based IoT platform that lets companies launch, manage and monetize IoT services on a global scale.

Further underscoring the trans-national frenzy to jump into IoT ventures, Gemalto, a Dutch digital security firm that is the world’s largest manufacturer of SIM cards, teamed up with Jasper to integrate its IoT service platform with Gemalto’s LinqUs on-demand connectivity system.

Separately, General Steel Holdings, a Chinese-based company registered in Nevada and listed on the New York Stock Exchange, is migrating away from its original business (metal production) towards IoT and logistics. The company is acquiring specialty firms to design, manufacture and integrate RFID systems for supplies, inventory and products. The company’s “strategic restructuring” coincides with its alliances with other firms to pursue IoT ventures.

The IoT ambitions of Chinese companies stems in part from Premier Wen Jiabao’s 2010 pronouncement that called for rapid deployment of IoT projects, characterizing them as pivotal for China’s development. Less than two years later, the Ministry of Industry and Information Technology (MIIT) dispatched a plan for IoT pilot projects in manufacturing, agriculture, finance, transportation, health care and public safety. The latest Chinese five-year plan, unveiled in October, features IoT projects called Internet+ as an efficient way to encourage entrepreneurship and innovation.

So far, the Chinese government has poured more than $24 billion into IoT projects, according to International Data Corp. With that kind of encouragement and financial support, Chinese companies have explored an array of IoT connections.

For example, Shenzhen-based, backed with new funding from a Hong Kong investor, is building alliances with technology startups in Korea, Japan, Italy, Israel and the U.S. The company has developed a platform to connect global intelligent hardware entrepreneurs and Chinabased supply chain resources focused on IoT projects.

The GSM Association, in a report on China’s IoT for its “Connected Living” program, credits such initiatives to China’s strengths in both hardware and software. “While the IoT is a global phenomenon, China is in the vanguard of deployment,” GSMA says in its recent report, How China is Scaling the Internet of Things. It cites the country’s economies of scale as “unmatched” by other countries.

In particular, the Ministry of Housing and Urban and Rural Development and its very aggressive funding for “smart city” pilot projects, estimated at $16 billion initially is expected to create prototypes that may be adopted worldwide. More than 90 percent of China’s provinces and municipalities have cited IoT as “a pillar industry in their development plans,” according to an MIIT vice minister.

Standards and Technical Integration

Predictably, the IoT frenzy is encountering technical growing pains. For example, within China, at least three not entirely compatible IoT formats exist. Huawei, the telecom behemoth, developed an open-source “Agile IoT” technology platform and offered it to developers for wearables, smart homeware and smart cars. Given Huawei’s clout and resources, the system has the potential to work its way into “Smart City Solutions” for mobile and fixed telecom services.

Meanwhile, Xiamen, a Beijing smartphone vendor, is building an ecosystem of connected devices, controlled by its smartphones. It has acquired a couple dozen startups and launched products, including energy and health monitors and security devices.

And Chinese Internet search engine giant Baidu, resembling Google in its initiatives, is taking a different approach. It is testing smart eyewear and autonomous cars.

While such technology fragmentation seems un-Chinese, analysts see it as a way to develop IoT standards that could go global, according to Matthew Fulco in his report Poised for Takeoff: China’s Internet of Things.

The evolving IoT platform situation in China encapsulates the broader issue of global standards. In February, Cisco, Intel, Microsoft, Qualcomm, Samsung, GE Digital, Electrolux ARRIS and CableLabs unveiled The Open Connectivity Foundation (OCF) to create standards and “IoT solutions and devices that work seamlessly together.” OFC replaces the Open Interconnect Consortium, formed in 2014. It brings together strange bedfellows that had previously pushed their own rival alliances for various IoT initiatives.

“Fragmentation is the enemy of IoT,” says Michael Wallace, president of Qualcomm Connected Experiences Inc., a subsidiary of Qualcomm Inc. The new OFC is intended to fulfill the IoT promise that “anyone from a large technology company to a maker in their garage can adopt the open standards of OCF to innovate and compete, helping ensure secure interoperability for consumers, business and industry.”

Separately, the GSM Alliance, which manages some wireless technology, has launched “IoT Security Guidelines,” to offer IoT ecosystems advice for attacking common cybersecurity threats as well as data privacy issues associated with IoT services. The project is backed by AT&T, Verizon, China Telecom, NTT DOCOMO, Orange and Telefónica plus vendors such as Ericsson, Gemalto and Telit.

“As billions of devices become connected in the Internet of Things...the possibility of potential vulnerabilities increases,” says Alex Sinclair, CTO at GSMA. “These can be overcome if the end-to-end security of an IoT service is carefully [designed] and an appropriate mitigating technology is deployed.”

Mozilla has also plunged into the “personal Web of things,” with an emphasis on smart TV and its speech project Vaani, seen as a move toward artificial intelligence. And Microsoft continues to develop its Azure IoT Hub, a cloud service to connect and manage sensors and other smart devices.

Call Security

These projects and dreams for s tandards are tempered slightly by the inevitable dilemma about how to handle safe ty, privacy and security involving IoT. In its survey IoT Trends, Challenges and Experiences in February, James Brehm & Associates found that almost two-thirds of business executives worldwide said that security was a top barrier to IoT growth. Interoperability was the next hurdle, cited by 51 percent of respondents.

“The growth of connected devices and the IoT prompts serious consideration of data privacy and security,” says Brad Russell, a big data research analyst at Parks Associates, which has also been monitoring IoT development. His study found that about 40 percent of consumers fret about privacy and security for IoT applications such as door locks, openers, computers and smartphones, while just under 25 percent worry about health devices and connected consumer devices.

“The greatest challenge to securing the IoT is that no entity is in charge of securing it,” Russell adds. “Developers, manufacturers and consumers each have their roles to play. Smart companies will develop strategies that will deliver on their brand promises to consumers for an IoT that is, collectively, as smart and secure as the devices that comprise it.”

Bajarin of Creative Strategies agrees that the security issue poses a near-term hurdle for IoT. But he also insists that such issues tend to be ironed out as a technology progresses from a concept to widely used applications.

“We are only at the beginning stages of adding Internet connections to billions of devices and objects,” Bajarin says. “The ultimate goal of IoT is to connect and interconnect all types of items and devices and make them part of a broader ecosystem that is connected to the cloud. This would enable them to be used for actions and control and in theory, make our lives easier and richer.”

Gary Arlen