Success of IoT relies on security and standardization

By: Jason Collins, Vice President, IoT Marketing, Nokia

Today smartphones and tablets are everywhere and social networking apps such as WhatsApp and Snapchat are booming. In the next phase, everyday objects will connect and become part of information systems and end-user applications. Our daily lives will change as machines and humans interact to make our society safer, greener and healthier. Connected wearables and telemedicine will help improve people’s health, homes will be safer and there will be fewer road fatalities.

This convergence of machine-to-machine (M2M) communications, big data analytics and the growth in connected devices is enabling a highly connected world known as the Internet of Things (IoT).

The coming decades will be characterized by billions of smart devices, trillions of dollars in economic growth and cost savings, and exabytes of sensor-generated data. In this environment, the IoT is emerging as an unprecedented business opportunity for many players in the telecoms, IT and consumer electronics industries. There are attempts made by many sources to size this market. For example, industry analyst firm IDC (2014) expects the global IoT market to triple from 1.9 trillion U.S. dollars in 2013 to 7.1 trillion in 2020, with 28.1 billion “things” connected. Machina Research (2015) projects the IoT ecosystem to be worth 484 billion EUR in 2025, with applications, analytics and end-user services accounting for 90 percent of that total.

Moving beyond hype

The talking fridge is a worn out example of what the programmable future could look like. It is no longer hype, nor are self-driving cars or 3D printing. Many devices and applications have already found their way to the public, either as prototypes or commercial products. IoT is clearly moving beyond hype. Now the focus is on developing new business opportunities, applications and services. The massive sensor-generated data will also require a scalable and more energy- and resource-efficient network. That is why IoT is one of the key drivers of 5G networks.

Although today’s media focus is mainly on devices and applications, it is the network that can make or break this next step in the evolution of the Internet. The IoT revolution can only succeed when it is supported by a network that allows scalable deployment, secure delivery, cost-effective operations and fast time-to-market of new applications.

As sensors and devices spread across almost every industry, the Internet of Things is going to trigger a massive influx of big data. The most interesting opportunities will be in automotive, utilities, public safety, smart cities and homes and healthcare. Every 40 seconds someone in the U.S. has a stroke. World Health Organization figures show cardiovascular disease as today's number one cause of death. Healthcare is expected to be one of the largest vertical markets in the Internet of Things, with analysts forecasting that mobile health, with a CAGR of 37 percent, will be the fastest growing healthcare segment from 2015 to 2020.

Looking at cars, by 2020, a quarter billion connected vehicles will enable new in-vehicle services and automated driving capabilities, according to Gartner. From April 2018 onwards, all new cars in the European Union will be equipped with eCall technology. In the event of a serious accident, eCall automatically dials 112, Europe’s single emergency number.

Together we have to figure out how to capitalize on big data, M2M and cloud opportunities that are driving value for IoT. In order to do that, we have to overcome challenges, particularly related to security and standardization as they play increasingly prominent role in the programmable future.

Security under attack

In a connected world, the security is often under attack. As we connect more devices, and create more value from the generated data, the risk for abuse and security breaches goes up. For example, for connected cars, security is the number one challenge. Car manufacturers have been forced to recall cars due to hacking.

Some of the key IoT security challenges are related to the long device lifetime, which means that the encryption could be cracked before the device is updated. Some IoT devices could be poorly managed, because as long as your garage door opens, who cares that the door opener could send a million spam emails. This leads to another challenge: signaling storms where malware could increase device activity drastically and overload networks and drain battery. Let’s not forget identity related challenges either.

Lacking or limited security could slow down the adoption of M2M in healthcare, industrial installations, and homes. Secure end-to-end connectivity is therefore essential. Fortunately, security is built into 5G networks right from the start.

Conquering complexity

The complexity of managing millions of IoT device connections and developing multiple IoT applications can be challenging for operators. The challenges are multiplied by today’s IoT environment in which application silos are built for different markets. The growth in such proprietary solutions will lead to market fragmentation that cannot ultimately realize the full potential of IoT. Standards for the raft of technologies needed for end-to-end IoT are missing. Areas such as applications enablement, analytics, security, location mapping, indoor positioning and smart sensors are mostly proprietary or based on fragmented standards that do not support interoperability.

Overall, the M2M business is characterized by very small revenues per connection and even smaller margins. One of the often underestimated challenges of building a sustainable M2M business is dealing with a complex and highly fragmented ecosystem in which sensor, SIM card, module and device vendors, network and platform suppliers, application developers, system integrators, and connectivity and service providers are contributing to the value chain.

As a global player, Nokia aims to shape the IoT ecosystem and help establish the necessary standards for IoT that will lead to the programmable world. Standards are essential to enable compatibility and ease-of-use.

M2M service providers need to stop deploying separate stovepipes for different applications and work towards an “any device, any app, any network” model. An end-to-end network architecture with a common set of service capabilities, standardized interfaces and open APIs should help them to reduce investments, facilitate partnerships, and speed time-to-market.

The development and adoption of standards such as oneM2M will harmonize device interactions, simplify integration and create economies of scale. Standardization will also make it easier for individual stakeholders to partner and interwork with each other’s components, networks and services.

Towards connected world

Despite all the challenges and growth pains IoT will still face, I believe it can enhance the quality of life, bring economic growth, and overall make the world a better place. Already today, the IoT is creating new business models and connected experiences through the adoption of M2M and innovative new consumer products. We at Nokia are working towards this programmable, connected world by preparing for the commercialization of 5G – a key enabler of IoT.