& cplSiteName &

US Giants Carve Out Role in the Industrial IoT

Sarah Thomas
2/2/2016
50%
50%

The introduction of billions of connected devices, known as the Internet of Things (IoT), is set to change the way the world works, and will, to varying degrees, impact the everyday lives of the vast majority of the world's population. But it goes far beyond a personal experience.

The Industrial Internet of Things (IIoT) is fundamentally transforming how enterprises do business in ways both big and small, obvious and subtle, consumer facing and behind the scenes. It also has the potential to add $14.2 trillion to the global economy by 2030, according to Accenture, so it's easy to understand why the major wireless operators want to stake their claim in the action now.

Wireless operators such as AT&T Inc. (NYSE: T) and Verizon Wireless have been playing a major role (that of connectivity provider) in the machine-to-machine (M2M) communications space for more than 20 years, but the IIoT is emerging as perhaps the biggest opportunity in the all-encompassing Internet of Things. (See IoT Prospects for Wireless Operators: Good or Bad?)

IIoT is the combination of machines, apps and analytics that together transform the manufacturing process. And it's happening, to varying degrees, in all the major economies of the world: In Germany it's part of what is termed Industrie 4.0; in China, two government initiatives (Made in China 2025 and Internet Plus) are the catalyst for IIoT developments. (See The Rise of Industry 4.0 and watch out for IIoT Prime Reading reports on developments in Germany and China in the near future.)

Heavy Reading senior analyst Steve Bell notes that this affects many industries that have used M2M for years, but in isolation. Now, they are able to connect their supply chain, ERP enterprise resource planning (ERP), purchasing and processes with the manufacturing floor.

"Discrete sensor systems can now be connected to the cloud and the data in different formats can effectively be merged and blended and extracted," Bell explains. IIoT will impact all enterprise verticals in some way, but the ones likely to benefit most include transportation, automation, manufacturing, industrial mining, processing and aviation.

IIoT's Ship Has Come In
AT&T has a deal with A.P. Moller-Maersk Group to connect refrigerated containers on its shipping lines, making this one of the largest IIoT deployments of its kind.
AT&T has a deal with A.P. Moller-Maersk Group to connect refrigerated containers on its shipping lines, making this one of the largest IIoT deployments of its kind.

The enormous scope and potential of IIoT has caught the attention of all the major wireless operators in the US, though AT&T and Verizon have been the most aggressive so far. As part of his 2016 predictions, T-Mobile US Inc. CEO John Legere suggested big things to come from the carrier in IoT, but a spokesperson said it's not currently focused on IIoT. Sprint Corp. (NYSE: S), too, has been more focused on upgrading its LTE network than tackling IIoT.

AT&T and Verizon, on the other hand, have made big bets on IIoT: Verizon acquired Hughes Telematics to break into the automotive market, for example, while AT&T was a founding member of the Industrial Internet Consortium, a group that was formed in March 2014 with five members and has since ballooned to include more than 245 member companies.

Partners or pioneer?
Both operators see their roles as encompassing much more than just connectivity, but they're staking their claims in somewhat different ways. While AT&T is keen to partner for those aspects outside of its core competency, including potentially with the new low-power wireless network players that are building momentum, Verizon believes it has all the platform pieces -- network, cloud, security, professional services and apps -- already in place.

Mark Bartolomeo, Verizon's vice president of Internet of Things Connected Solutions, says the carrier's goal is to simplify IoT into an end-to-end integrated solution for enterprises. IoT, he says, requires working with customers that have not led as early adopters with M2M because of its complexity, lack of standards and the fragmented ecosystem of partners.

"IoT brings together all the elements they've been struggling with to adopt M2M faster and see returns," Bartolomeo says.

AT&T is singing a similar tune, but appears to be much more open to partners. According to AT&T Enterprise IoT Practice Leader Mobeen Khan, it breaks down its involvement in IoT until three layers: connectivity; platform; and solutions or apps. Until recently, connectivity would have been via its LTE or 3G network, but now AT&T is exploring multi-network connectivity for devices that don't need cellular connectivity, such as a satellite access for remote parts of the world or WiFi for a hospital basement. All this is managed through AT&T Control Center, which applies business policies around what to connect to and when.

AT&T is also exploring low-power network alternatives, Khan says, including the GSM Association (GSMA) 's proposal for low-power access through CAT-M or narrowband IoT solutions. (See How IoT Forked the Mobile Roadmap.)

"We're in the process of evaluating all of them -- whether it makes sense to adopt one or use all of them or work with partners or deploy ourselves," Khan says. "A decision has not been made but we do feel certain use cases require [a particular solution]."

Verizon supports LTE, WiFi, Z-Wave, Zigbee and private spectrum in its connectivity portfolio, but it's less keen to explore alternatives such as low-power networks that aren't derivatives of the LTE standard. Bartolomeo says that Verizon already has an advantage in that its LTE network has thousands of towers deployed, covering 98% of the US and letting it offer connectivity at a much lower cost. LTE modules are still around the $15 range, but he believes they'll fall to the $5 to $10 range in the future.

Next page: In search of standards

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
2/4/2016 | 9:28:20 PM
Re: Service providers
danielcawrey, I believe that the partnerships are key as well, which is why it appears to me that AT&T has a strategy that may better fit the dynamics of this transformation.  Standards will be critical for the market, but the connectivity with the partners and linking those pieces I believe is the place to start.

I think Verizon will run into challenges with their internal end-to-end system.

The IIoT is going to be fascinating to watch.  I am interested to see how far ahead Germany is on this - we may have to catch up with them.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/4/2016 | 12:29:43 PM
Cisco
With the Jasper acquisition, Cisco wants to be that one-throat-to-choke responsible for a customer's entire IoT deployment. 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
2/4/2016 | 12:28:22 PM
Standards
Hard to see how IoT can proceed without standards, given that it's all about things talking to other things. 

Sure, each vendor would prefer that those things all be produced by itself and its partners. But that's not going to happen. Networks today are amalgams of components and software from different vendors, accreted at different times. Companies get acquired and merge and their networks have to talk with each other. That's not going to change with IoT. 

 
danielcawrey
50%
50%
danielcawrey,
User Rank: Light Sabre
2/3/2016 | 1:04:04 PM
Service providers
I'm sure that many of these companies as service providers don't see a real point in doing the legwork for IoT all by themselves. What makes a lot more sense for these companies is to partner with hardware providers and implementation services as their best bet. 
Featured Video
From The Founder
Light Reading founder Steve Saunders grills Cisco's Roland Acra on how he's bringing automation to life inside the data center.
Flash Poll
Upcoming Live Events
February 26-28, 2018, Santa Clara Convention Center, CA
March 20-22, 2018, Denver Marriott Tech Center
April 4, 2018, The Westin Dallas Downtown, Dallas
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
SmartNICs aren't just about achieving scale. They also have a major impact in reducing CAPEX and OPEX requirements.
Hot Topics
Here's Pai in Your Eye
Alan Breznick, Cable/Video Practice Leader, Light Reading, 12/11/2017
Verizon's New Fios TV Is No More
Mari Silbey, Senior Editor, Cable/Video, 12/12/2017
Ericsson & Samsung to Supply Verizon With Fixed 5G Gear
Dan Jones, Mobile Editor, 12/11/2017
Cloudy With a Chance of Automation: Telecom in 2018
Iain Morris, News Editor, 12/12/2017
Juniper Turns Contrail Into a Platform for Multicloud
Craig Matsumoto, Editor-in-Chief, Light Reading, 12/12/2017
Animals with Phones
Don't Fall Asleep on the Job! Click Here
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed