Phil Beecher, president and CEO, Wi-SUN Alliance explains why standardisation is a key requirement for IoT projects

The Industrial Internet of Things (IIoT) is rapidly changing the way organisations work, for the better. Many across the globe are already driving improved collaboration and business efficiencies, faster time to market and productivity enhancements off the back of IIoT systems. Yet while the industry is maturing fast, there are roadblocks. Nearly 94 per cent of the global IT leaders the Wi-SUN Alliance polled recently who said they had IIoT plans, claimed they have experienced challenges, including security concerns, cost and an absence of leadership buy-in.

It’s clear from our detailed research into key IIoT verticals that security, performance and industry standards will be key to driving successful projects going forward.

Supporting the business

There’s no doubt that the Internet of Things is already responsible for huge investment in what can broadly be termed industrial projects: areas including utilities, smart cities, manufacturing, agriculture, transportation and even healthcare. The IIoT utilities sector alone is estimated to be worth $11.7bn by 2020, while the smart cities market is predicted to reach $147bn by 2020.

We focused our research on sectors that could specifically benefit from IIoT solutions including oil and gas, government, telecommunications, energy and utilities. Perhaps unsurprisingly, given their long-term use of SCADA and industrial control systems, oil and gas firms were most keen to adopt IIoT technologies. Utilities firms challenged with monitoring and controlling large, complex infrastructure systems, were also ready to embrace new technologies, with 78 per cent highlighting IoT as a top priority for 2018. But they weren’t alone in their enthusiasm. In total, over half of all the IT leaders we spoke to who are investing in IIoT claimed they have fully implemented their strategy, while around a third are currently rolling it out.

So why such an overwhelming response? We found that IIoT neatly ties into and supports many related business/IT priorities: 64 per cent cited increased IT automation, 55 per cent pointed to better use of big data analytics and 49 per cent highlighted improved connectivity as key focus areas for the year ahead. The most popular direct reason for embracing IIoT was “to improve network intelligence and connectivity for citizen safety and quality of life” (47 per cent), followed by improving system reliability (41 per cent) and reducing operating costs (37 per cent).

Real world benefits

The good news is that almost all IT decision makers said they’re already seeing some tangible internal and externally facing benefits after implementing IIoT projects. That’s why increasing numbers of big name organisations are putting their money behind such initiatives. It’s particularly popular among utilities players like Florida Power and Light, which runs a smart network comprising advanced metering infrastructure (AMI) and automated feeder switches (AFS) to serve over 4.5m homes. It’s not only reduced operating expenses, because many meter checks can now be carried out remotely, but also improved billing efficiency for customers: a clear win-win. It crucially also helped the utility avoid 118,000 customer outages during 2016’s Hurricane Matthew, with 99 per cent of those affected getting power restored within two days.

The benefits of a smart, connected grid are that you can also expand and enhance it with new capabilities. That’s what Florida Power and Light has done, adding nearly 500,000 connected street lights in what was the largest programme of its kind in the world when launched. This has allowed the provider to improve the reliability of its street light network; reduce usage and save money by dimming at certain times; and even provide emergency responders with the ability to control street lights on demand.

Oklahoma Gas & Electric has rolled out a similar smart grid, allowing it to lower emissions, give more control on energy usage to consumers and reduce costs by minimising the number of support vehicles on the roads. Its expandable network connected 250,000 LED street lights to improve quality of service and lower energy consumption. There are projects like these occurring all over the world, including major European cities such as London, Glasgow and Paris.

The security challenge

That said, there are challenges to running successful IIoT projects, with UK respondents to our study most likely to have encountered difficulties. In fact, only three per cent described the process as challenge-free. Security came out top (59 per cent) among our respondents’ challenges, and proven security with multi-layer protection and continuous monitoring was considered “absolutely crucial” for smart city solutions (50 per cent) and smart utilities (40 per cent).

It’s not surprising to see why, given rising threat levels. Critical infrastructure (CNI) providers have always been a major target for financially motivated cybercriminals and state-sponsored operatives, but warnings have increased significantly in frequency over the past 18 months. The National Cyber Security Centre (NCSC) and US authorities recently issued a joint technical alert about malicious cyberactivity carried out by Kremlin hackers. It follows previous warning from NCSC boss Ciaran Martin that the Russian Government is actively attacking UK telecoms, media and energy firms.

The impact of such attacks may currently be unknown, but a cautionary tale exists in the form of Ukrainian power companies, which were attacked in 2015 and 2016, leading to power outages for hundreds of thousands. Although these attacks are thought to have been highly sophisticated, with at least one involving the reflashing of firmware on key systems, they don’t have to be. The WannaCry and NotPetya ransomware worm attacks of 2017 spread quickly to cause widespread outages and chaos across multiple sectors.  Not only did WannaCry cause an estimated 19,000 cancelled NHS operations and appointments, but together they cost major organisations hundreds of millions in lost productivity and service outages. Global shipper Maersk ($300m), logistics giant FedEx ($300m) and Nurofen-maker Reckitt Benckiser (£100m) were among those reporting major losses.

New compliance requirements for EU organisations will only fuel the need to invest in security when implementing IIoT. The General Data Protection Regulation (GDPR) and Network and Information Systems (NIS) Directive will give regulators the power to levy fines of up to €20m or four per cent of global annual turnover for non-compliance. While the latter applies mainly to CNI providers, the former could affect any firm processing data on EU citizens. Worryingly, just 43 per cent of IT bosses we spoke to claimed they are including data protection compliance in their IoT strategy. That could be a costly mistake.

Board on board

The challenges of implementing IIoT extend far beyond security. Getting board-level buy-in was a common issue, with 32 per cent of respondents citing a reluctance among senior executives to commit to projects and a similar number citing funding challenges. Just under a third said their bosses didn’t understand the benefits of IIoT while 37 per cent claimed competing priorities were a barrier.

It’s clear that executives need to be briefed more effectively on the benefits of smart technologies. Among these, the most common cited by respondents were improved business efficiency (54 per cent), enhanced customer experience (49 per cent), better collaboration across the organisation (48 per cent), increased agility (47 per cent) and reduced costs (45 per cent). It’s up to IT leaders to pick out key business decision makers and convey the importance of IIoT in a language they understand. Research like this and case studies of real life successes will certainly help.

The importance of standards

One unusual finding from the research was the importance of network topology (58 per cent) in planning an IIoT initiative. In fact, it came top of the list of criteria for the IT leaders we spoke to. The majority said they favoured a blend of star- and mesh-based networks. However, mesh models offer a series of improvements over star networks which makes them a better choice for CNI providers, including greater resilience to hacking and signal jamming. Mesh networks are also built to reduce single points of failure and black spots and usually transmit short distances, meaning they’re more power efficient and better performing.

That’s good news, considering that performance (53 per cent) also ranked high among respondents as a criterion for evaluating IIoT solutions. It’s clear that IT leaders rate factors such as latency, bandwidth and bi-directional communications as key to their decision-making process.

Open standards are another key feature to look for in any IIoT network technology, as they reduce the risk of vendor lock-in and ensure organisations are following industry best practices. More than half of those we spoke to claimed standardisation was a key requirement for IoT projects, 45 per cent said that smart city IoT solutions should be built using industry-wide open standards, and a similar number (43 per cent) said the same for utilities projects.

It’s heartening to see open standards given the importance they deserve. One such standard to look for is the IEEE 802.1AR spec for Device Identity, which supports improved authentication of a device. By embracing these and other industry-agreed standards, IT leaders stand the best chance of success with their IIoT projects: not only in optimising the performance of networks and devices but also ensuring interoperability across systems. Standards are the key to protecting legacy assets, preserving ROI, reducing TCO and charting a course for continued IIoT success as technology rapidly evolves.

The IIoT market is predicted to reach $934 billion by 2025. The key for IT and business leaders looking to differentiate with their initiatives will be knowing where to focus that spend.