//////////////////////////////

I o T a n a l y ti c S

COURSE

The race is on to gain first-mover

advantage from the IoT. Heres what you
need to know to get to the front of the pack.
B Y P A t r i c k t h i bo d e a u

How analytics
and the Internet
of Things raise
the stakes for IT

J u ly 2 0 1 5 > >

COmputerworld

>>

SHUTTERSTOCK

eres a hard truth: IT

executives who havent
explored the impact of the
Internet of Things on their
businesses are already
lagging behind. Savvy
business leaders see a first-

//////////////////////////////
I o T a n a l y ti c S

COURSE

IoTs most obvious

application

n area where the Internet of Things is making immediate inroads is in facilities management. Users
can gain energy savings and other benefits through
centralized control, monitoring and management

of heating and cooling equipment and other components of

mover advantage with this
buildings and grounds infrastructures.
new technology paradigm,
For example, Arbys Restaurant Group is using HVAC
and theyre jumping on it,
and refrigeration monitoring systems built by Powerhouse
leaving others in the dust.
Dynamics, a company founded in 2008, at about 940 of
Organizations that
its corporate-owned restaurants (out of a total of some
once simply sold prod3,400 restaurants worldwide).
ucts are now selling
With the installation of programmable thermostats,
services. Analytics
Arbys has gained centralized insight into the operation
are being used to
and health of its heating and cooling systems, and it has
predict system failset HVAC operational standards for its stores. Operations
staff can tell when a system isnt working correctly.
ures. Engineers can see how
This data was never available to us in the past, but now
customers are using their
it is helping us make smart spending decisions, says Frank
products and apply that data
Inoa, director of engineering at Arbys.
to building something better.
Arbys is seeing its power usage decline, although that
Embedded sensors, wireless
reflects not only the new HVAC monitoring and control capamesh networks, wearable
bilities but also a move to LED lighting and the installation of
systems like Google Glass and
high-efficiency rooftop units.
virtual reality-type technoloInoa says hes sold on the idea that the IoT can bring
gies will change how people
positive changes and reduce costs. He says hes interested
interact with computers.
in expanding Arbys deployments of sensor technology to
With each new connected
cooking appliances, irrigation equipment and other systems.
device that extends what
Patrick Thibodeau
has come to be known as
the Internet of Things, data
emerges that brings fresh
discovery about how machines behave and how people
use them. More data in the hands of business leaders
means potentially more knowledge about their markets,
their customers and their problems. That data also creates
smarter competitors.

J U ly 2 0 1 5 > >

COmputerworld

>>

//////////////////////////////
COURSE

The Internet of Things,

or IoT, brings its share of IT
challenges. Big data collection
may drive more businesses to
high-performance computing
Remember that IoT communications protocols are in a
platforms and NoSQL datastate of flux as vendors battle for market dominance.
bases, and to a new industry
Make sure your IoT vendor has a strategy for keeping your
sector made up of vendors
systems whole as standards proposals rise and fall.
specializing in device commu Be wary of vendor promises that differing IoT protocols
nications and dedicated cloud
can be bridged easily. Data can get lost in translation, and
and application development
two different protocols may not fully map to each other.
platforms. People who can
Dont promise your business colleagues additional revfind new ways to connect
enue from IoT-generated services unless youre certain
disparate data sets and
that you can deliver. Theres a lot of trial and error in the
market today, much of it aimed at testing the willingness
who have the skills to analyze
of customers both business users and consumers to
and, cull insights from, the
buy new services. Vendors say theres a good deal of
ever-growing stockpiles of
uncertainty about what will work.
information will be hot
Patrick Thibodeau
commodities.
IoT deployments are still
new, and theres a real sense
that any business that acts
now to incorporate IoT functionality into its products
or services will gain an advantage. The idea that were
witnessing a major shift in IT is genuine.
So how do you capitalize on this trend? Heres an in-depth
look at a handful of forward-thinking companies that are
moving ahead of their competition as they embrace the
promise and potential of the IoT. Their stories reveal the
chief challenges youll encounter as you launch IoT projects,

IoT pitfalls to avoid

J U ly 2 0 1 5 > >

COmputerworld

>>

SHUTTERSTOCK

I o T a n a l y ti c S

//////////////////////////////
I o T a n a l y ti c S

COURSE

Data services
now make up
and offer a glimpse of the budding IoT ecosystem, where
startups and established IT vendors are competing to
offer the hardware and software needed to make the IoT
come to life.

25%

of All Traffics
revenue.

The IoTs impact on business models is revolutionary

Pioneering company >> All Traffic Solutions

At All Traffic Solutions, one of more than a dozen companies interviewed for this story, executives say the IoT has
breathed new life into their business.
The State College, Pa.-based
company sells electronic highway
signs, like the ones that flash
your vehicles speed as you drive
by. But once it equipped its signs
with cellular transmitters, along
with a data reporting system and
B
e
open
to
experimentation.

remote controls, All Traffic SoluSensors cost little and can generate
tions began selling services as
new insights about a products opwell as signs.
eration. A small engineering investData services now make up 25%
ment may lead to big returns.
of All Traffics revenue.
Reach outside of IT and brainstorm
We turned ourselves from
with product groups about potential
uses of IoT technologies. Take charge
strictly a hardware company
of developing a vision and a stratinto a hardware-and-services
egy for making that vision a reality.
company, says Ted Graef, All
Speak up and play an active role in
Traffics president.
industry groups. Standards battles
And Graef isnt stopping there.
and vendor jockeying may slow IoT
His company has created a system
rollouts. Make sure vendors know
that enables its customers to use

How to get the

most from IoT
initiatives

what users want.

Patrick Thibodeau
J U ly 2 0 1 5 > >

COmputerworld

>>

//////////////////////////////
I o T a n a l y ti c S

COURSE

a single platform to manage all the pieces of

road equipment they use vehicle counters, for
example no matter what vendor makes the
equipment.
A cross-vendor management platform like that
is a new concept for this industry. To build it,
All Traffic turned to ThingWorx, which makes a
software platform for building and running IoT
applications. Founded in 2009, ThingWorx is one
of many new vendors in the emerging Internet
of Things market.
The collaboration promises to bear fruit.
Whoever connects first in an industry is going
to run their industry for a little while, Graef
predicts.

Moving faster than the competition

Pioneering company >> TempuTech

Its not artificial

intelligence,
but were
getting there.

Adrian Merrill,
CTO and vice president of
operations, TempuTech

During harvest time, trucks line up at grain

elevators to unload crops. But sometimes the
belts and elevators that move grain get backed up, and
operations are shut down for as long as four to seven hours
as the grain is dislodged. TempuTech, a provider of grain
management systems, is now deploying wireless modules
and an analytics back end that can automatically shut down
a feeder at the first sign of a problem, then let the system
clear itself of grain and quickly resume operations with
minimal interruption.
Adrian Merrill, CTO and vice president of operations at
TempuTech, says his companys push to use data collection

J U ly 2 0 1 5 > >

COmputerworld

>>

//////////////////////////////
I o T a n a l y ti c S

COURSE

and analytics to improve operations and proactively

address hazards is working. Its not artificial intelligence, but were getting there, he says.
Merrill, who is working with GE Intelligent Platforms
to develop a proactive analytics system for his operations, says Byhalia, Miss.-based TempuTech has had
to educate customers about what IoT technologies can
accomplish. But once customers understand the possibilities, expectations are changed.
By moving swiftly, Merrill believes his company is
gaining a strong competitive edge in its market.

In Plexs
case,
the IoT is

taking a
software
vendor
from the
cloud to
the shop
floor.

Software companies will now offer hardware

Pioneering company >> Plex Systems

In the case of All Traffic Solutions, the IoT took a maker of

physical products into the world of analytics. The reverse
is true at Plex Systems, which offers a cloud-based ERP
system for manufacturing companies. In Plexs case, the
IoT is taking a software vendor from the cloud to the shop
floor, where new technologies will interact directly with
the physical machines that generate the data collected by its
ERP system.
The Troy, Mich.-based company is participating in a
Google Glass pilot, and Plex CTO Jerry Foster says the Glass
technology may have a big impact not only on the way Plex
ERP tools collect data, but also on operations in manufacturing plants.
For example, as shop foremen wearing Google Glass
eyewear perhaps a safety-goggle version walk by
machinery, the wearable technology will be able to collect

J U ly 2 0 1 5 > >

COmputerworld

>>

//////////////////////////////
COURSE

I o T a n a l y ti c S

If youre not
innovating,
if youre not
doing something
new, then youre
standing still,
and you will
get passed.
Jerry foster, CTO, Plex

J U ly 2 0 1 5 > >

COmputerworld

>>

//////////////////////////////
I o T a n a l y ti c S

COURSE

Other benefits of IoT technology deployments on the

shop floor could include
new safety features.

direct transmissions of data

about how well the equipment
is performing or, perhaps, the
number of jobs it has processed. (In a manufacturing
environment, people are less judgmental about Google
Glasss effect on ones appearance because, as Foster says,
everyone already looks like a nerd.)
Other benefits of IoT technology deployments on the shop
floor could include new safety features, such as hands-free
scanners that track parts, or systems embedded in clothes
that warn of approaching forklifts.
Sensor technology and wireless communications will
become so integral to manufacturing operations that PCs
and even tablets may disappear from the plant floor. There
wont be a need for them because the interaction points will
be real-time, says Foster.
With the rise of the IoT, Plexs role as an ERP provider
is likely to evolve as it deploys more systems that give
its customers the ability to interact with equipment via
sensors and technologies such as Google Glass.
Virtual reality may be the next milestone. Foster says Plex
is examining that technologys potential to help workers
assemble parts and make repairs.
If youre not innovating, if youre not doing something
new, then youre standing still, and you will get passed,
says Foster.

Predictive analytics alters business models

Pioneering company >> ABB Robotics

ABB is a Swiss company that makes robotics used in manu-

J U ly 2 0 1 5 > >

COmputerworld

>>

//////////////////////////////
I o T a n a l y ti c S

COURSE

We maintain the robot based on its

actual condition, and not on the
basis of how many hours it has run
Rene nispeling,

Product Manager, ABB Robotics

facturing, particularly automotive manufacturing. Robots have long had sensors

to record voltages, CPU load, temperatures and other variables. But once this
company turned its robots into connected
products, things changed.
By recording and analyzing exactly
how each robot is being used, for example, ABB has been
able to recommend a maintenance schedule specific to
that robot. The team also uses analytics to predict when
problems will appear.
We maintain the robot based on its actual condition, and
not on the basis of how many hours it has run, says Rene
Nispeling, product manager at ABB Robotics. Scheduling
maintenance based on a fixed timetable is so wrong, he
says, because all robots are doing different things.
Each robot generates about
2MB of data per month. Users of
IoT products, more often than
not, want their connected equipment to be independent of corporate networks. To accommodate
that, ABB turned to Jasper, a
provider of a cloud-based IoT
platform thats designed to

[Scheduling maintenance
based on a fixed timetable]
is so wrong, nispeling says.
because all robots are
doing different things.
J U ly 2 0 1 5 > >

COmputerworld

>>

//////////////////////////////
I o T a n a l y ti c S

COURSE

Rene nispeling,

Product Manager, ABB Robotics

this is the future.

enable users to integrate wireless technology into worldwide communications networks.
The ongoing monitoring, coupled with predictive
analytics, has significantly reduced unplanned stops
by the robots, says Nispeling. That helps customers avoid
downtime.
Analytics also accelerates learning. ABB is continually
gleaning new insights from the data it collects, and in some
cases that affects product design. If, for example, a motor
built for a certain robot is never reaching 60% capacity,
engineers can optimize for actual usage and put in a
smaller motor, thus saving money.
ABB is also using analytics to deploy its field engineers
more efficiently. Now the engineers have a better idea
in advance of where they will need to be and what they
will need to do to keep customers robotic systems up and
running. This is the future, says Nispeling.

Analytics is changing the way things are done

Pioneering company >> New York Air Brake

IoT-driven analytics is having its biggest impact, initially, in
operations that use expensive equipment such as robots
and, in the case of New York Air Brake (NYAB), locomotives.
Railways have vast quantities of data-generating equipment. But some of that equipment is quite old, and theres
not a lot of uniformity in the data that the various products
generate. One company that has found a way to do more
with that data is Watertown, N.Y.-based NYAB, a manufacturer of railroad locomotive air brake and control systems,
which are similar to autopilots in that they can take

J U ly 2 0 1 5 > >

COmputerworld

>>

10

//////////////////////////////
I o T a n a l y ti c S

COURSE

Customers are becoming very data-driven,

and having predictive analytics ability is
a competitive differentiator.

command and control of a locomotive. The company is

integrating diverse data sets and then analyzing them using
tools from Splunk, best known as the maker of a search
engine built to handle machine-generated data.
Like ABB, NYAB found that data can be helpful in planning equipment maintenance; the company is providing
Greg HrebEK,
railroads with predictive analytics that can be used to
Director of engineering,
NYAB
schedule service for locomotives. The railroad industry
currently takes a scheduled-based approach to maintenance, which means locomotives may be sent for service
whether they need it or not. But theres a lot of interest in
maintenance scheduled around a locomotives actual needs.
Customers are becoming very data-driven, and having
predictive analytics ability is a competitive differentiator,
says Greg Hrebek, director of engineering at NYAB.

The difficult challenges ahead for IT

Managing and collecting data from vast numbers of devices
brings plenty of challenges to ITs doorstep.
The Internet of Things is going to have a dramatic effect
on IT departments, says John Canosa, chief strategist
at ThingWorx. It is taking [IT departments] out of their
comfort zone.
NYABs shift to predictive analytics, for example, has
given the company more focus on mathematics and statistics. IT workers will have to think in creative ways to get

J U ly 2 0 1 5 > >

COmputerworld

>>

11

//////////////////////////////
I o T a n a l y ti c S

COURSE

Were in a
completely
different
world here.

the most out of the data they are collecting.

The goal, says Hrebek, is to find new problems that customers have and to think
about the problems that customers kind of
ignore because they just feel its too big of a
problem to tackle.
John canosa,
Canosa notes that data analysis isnt a
Chief Strategist, ThingWorx
common skill set in traditional IT departments. Were in a completely different
world here, he says. Some IT professionals may be well
versed in business analytics, he explains, but IoT analytics
is different, because it involves devices and equipment. It
becomes a much more engineering mindset, he says.
In a typical manufacturing organization, for example,
the engineering and product development groups are separate from IT. Now, those two departments will have to work
closer together, says Canosa.

The IoTs database directions

The transition to IoT communications is also changing the
approach to databases. Machine-to-machine communications, in use for decades, are predictable and structured;
IoT communications arent. With many sensors being
embedded into everyday objects, there is no real way of
knowing upfront how that data will change over its lifetime. Data is no longer predictable, and this change in the
character of data has helped propel the NoSQL databases
popularity, says Mat Keep, principal product manager at
NoSQL database vendor MongoDB.
One company that had to respond the changing nature

J U ly 2 0 1 5 > >

COmputerworld

>>

12

//////////////////////////////
I o T a n a l y ti c S

COURSE

It wasnt Big data that was a problem

for Bosch, it was the need to cope
with the unknown as more devices
collected more types of data.
Dirk slama, director of business

development at Bosch Software Innovations

of data is Bosch, which makes a wide range

of consumer and industrial appliances and
tools, and employs nearly 300,000 people.
It wasnt big data that was a problem for
Bosch, it was the need to cope with the
unknown as more devices collected more
types of data, says Dirk Slama, director of
business development at Bosch Software
Innovations. That made the NoSQL approach
attractive, because unlike relational databases, the schema is dynamic, and the application can define the schema as it takes in
data. This push for new approaches is
helping some startups get a foothold.
For example, nearly three
years ago, Bosch began
working with MongoDB,
which at the time
was a tiny little
company, says

J U ly 2 0 1 5 > >

COmputerworld

>>

13

//////////////////////////////
I o T a n a l y ti c S

COURSE

Slama. Working with a startup like that was a big bet for
a company like Bosch, he explains. Thats not something
we do easily. But since then, MongoDB has won the backing
of several big investors and has attracted other big-name
customers and partners. MongoDBs growth was something
we were very happy to see, Slama says.

Hardware implications of the IoT

Applications used in IoT, such as MongoDB, are perfect fits
for the rich memory, high-frequency processors, Linux
operating systems and commodity storage that dominate
high-performance computing (HPC).
But at least initially, the attribute of HPC that would seem
to make it well suited for use in IoT projects is its ability
to manage extremely large distributed systems, says Steve
Conway, an HPC analyst at IDC.
Market data doesnt show much use of HPC systems in IoT
initiatives just yet, but Conway says he believes this will
begin to change by around 2018. Definitely, [the IoT] will
add to the growth of HPC, he says.
One sign of things to come was Crays recent announcement that it had sold a 5 petaflop system to Petroleum
Geo-Services (PGS), an Oslo, Norway-based oil and gas
company. This ranks as one of the largest supercomputers
ever sold to a commercial user. PGS will use the system to
process seismic data. While that isnt an IoT application,
the project does offer an idea of the power and scale of the
systems that might be needed to handle the big data generated by IoT initiatives.
And theres no doubt that the amount of data generated

J U ly 2 0 1 5 > >

COmputerworld

>>

14

//////////////////////////////
I o T a n a l y ti c S

COURSE

China expects to be generating

100 zettabytes

will be considerable. China

is investing
heavily in IoT applications and has developed an
IoT infrastructure development plan that goes out
to 2030, says Conway. The blueprint calls for development
of specialized IoT technology industry zones, and includes
research and development spending. They determined early
on that the only way to manage the IoT is with HPC, he says.
China expects to be generating 100 zettabytes in home
sensor data alone by 2030. To put that into context, 1
zettabyte equals 1,000 exabytes, and 1 exabyte equals 1,000
petabytes. The amount of data generated today is still a long
way from Chinas projections; Cisco estimates that annual
global IP traffic will pass the zettabyte threshold by the end
of 2016. But clearly an era of very big data is arriving swiftly.
Automobiles represent a major source of data. For example,
Octo Telematics has developed systems that generate profiles
of drivers by collecting data about habits such as speed and
braking. Those insights can be used to price insurance.
You can determine exactly how an individual customer
drives, when they drive and their driving behavior, says
Jonathan Hewett, chief marketing officer at Octo. This leads
to more accurate pricing and gives customers a driving
score thats linked to their premiums. Octo isnt alone; its
working with SAS, a business analytics software maker,
to gain a better understanding of driving risks, which can
also be used for pricing.
Octo says it now gathers 162,000 data points every
minute, amassing information about location, speed,

in home sensor
data alone
by 2030.

J U ly 2 0 1 5 > >

To put that
into context,
1 zettabyte
equals
1,000 exabytes,
and 1 exabyte
equals 1,000
petabytes.

COmputerworld

>>

15

//////////////////////////////
I o T a n a l y ti c S

COURSE

braking and more. But the insurance

companies dont have to deal with raw
data; Octo processes and analyzes it all.

New types of competitors

Disruptive change is often associated

with new companies reshaping the
landscape. That was certainly true at
the dawn of the PC era and during the
dot-com boom, with the latter leading to
the birth of Google, eBay, Yahoo, Netflix,
Amazon.com and many other companies
in the mid-to-late 1990s. But things seem
to be different during the emergence of
the IoT. The move toward networks of
connected things is enabling both old
and new companies to be disruptive and
to reach outside their markets.
One example of an old company thats
embracing the new world of the IoT is
Wells Fargo.
Bipin sahni,
The 163-year-old financial services
head of innovation and R&D
at Wells Fargo.
firm is researching ways to use beacons
and analytics to help its business clients
interact with their customers more effectively. For example,
when a shopper walks into a store, beacons wireless
systems that use Bluetooth could connect with his or
her smartphone or wearable device and send information
about sales, coupons or in-store service appointments.
The logic of a company thats a century and a half old

We want to offer
innovation as a
service to our
customers.

J U ly 2 0 1 5 > >

COmputerworld

>>

16

//////////////////////////////
I o T a n a l y ti c S

COURSE

delving deep into the Internet of Things is clear: If Wells

Fargo can help its business clients improve their degree of
engagement with their customers, that will ultimately help
Wells Fargo itself, says Bipin Sahni, head of innovation and
R&D at Wells Fargo.
We want to offer innovation as a service to our
customers, says Sahni.
Wells Fargo will aim this technology at a range of industries, including government, hospitality and higher education. The financial services giant is working with MuleSoft,
founded in 2006, which has developed a platform for integrating data, clouds and on-premises systems.

Navigating the IoTs business implications with technology

A.O. Smith, the largest water heater maker in North
America and China, is more than 140 years old, but its
relying on a company thats only five years old, Ayla
Networks, to connect its water heaters to a network.
Ayla makes an IoT-specific platform that embeds software
in a hardware communications module and couples that
with the services needed to transmit, gather and analyze
data by way of a cloud. The setup can be used for firmware
updates as well.
This end-to-end platform appealed to A.O. Smith, which
uses Aylas modules to create a means for connecting water
heaters to a network. A.O. Smiths initial goal, for commercial customers, was to offer data as an additional service.
But there was resistance from customers about paying for a
service, so the water heater maker built the capability into
its products.

J U ly 2 0 1 5 > >

COmputerworld

>>

17

//////////////////////////////
I o T a n a l y ti c S

COURSE

Ayla has adapted its pricing to the variability in IoT

services pricing. The vendor can include the cost of
providing IoT data services in the cost of the product. Users
can buy our service like they buy a part for a product and
bundle in the cost of the service, says Michel Maeso, Aylas
vice president of global sales.

Theres some hope that the Internet of Things,

because its so new, might be built upon a foundation
of lessons learned in e-commerce and will therefore
be more secure than some of our legacy systems.
Bundling the services costs into products, and not treating
them separately, might be the dominant model, says Maeso.
Consumers, in particular, are resistant to the idea of paying
for additional services.

Where it all leads

Analyst firm Gartner says that its research shows that
there is no dominant vendor in the IoT market, and that is
clearly true. Users are turning to a wide range of vendors,
including several established IT companies but also many
newer companies that have figured out how to create
connected systems that add immediate value to operations.
Dan Geer, chief information security officer at In-Q-Tel,
the CIAs venture capital funding arm, last year asked,
provocatively, whether all this technological dependency is
making us more resilient or more fragile.

J U ly 2 0 1 5 > >

COmputerworld

>>

18

//////////////////////////////
I o T a n a l y ti c S

COURSE

Theres no correct answer to Geers question. The sheer

scale of many of the recent headline-making cyber breaches
has been cause for alarm. Millions of credit card and
personal records are now routinely compromised.
Theres some hope that the Internet of Things, because its
so new, might be built upon a foundation of lessons learned
in e-commerce and will therefore be more secure than
some of our legacy systems. But there are some who believe
that the power of a vast network of interconnected devices
will eventually be used for evil, and in the most extreme
possibility imaginable to commit murder.
It will be hard to control IoT deployments in the enterprise. There will be coordinated deployments of smart
devices on corporate networks, but also arbitrary
deployments of devices by employees, says Geoff Grindrod, director of Threat Intelligence Services at security
firm Trend Micro. Knowing about the existence of a
smart device deployed on a corporate network will be an
increasing challenge for an IT administrator.
David Shipley, director of strategic initiatives in the IT
services department at the University of New Brunswick,
has been giving a lot of thought to IoT deployments at the
college and sees security as the ultimate concern.
The IoTs true potential is dead in the water if we dont
get a handle on cybersecurity, says Shipley. If we cant
even protect existing records, why are people and companies going to entrust even more data and, in some cases,
even more sensitive data to firms to leverage for analytical purposes or for customization?
Security may be paramount, but history tells us that
people will balance risks against benefits. In the case of the
IoT, users are quickly realizing quantifiable benefits, and
that, more than anything, will drive the race to adoption.

J U ly 2 0 1 5 > >

COmputerworld

>>

19