Operators should match their IoT security strategies with their ambitions in the IoT market

Operators should match their IoT security strategies with their ambitions in the IoT market

Operators should match their IoT security strategies with their ambitions in the IoT market

An article by Sherrie Huang and Michele Mackenzie at Analysys Mason.

“It is unlikely that IoT security will generate a significant new revenue stream, but it will be critical in winning new business and differentiating operators’ services from those of competitors.”

We forecast that 6.4 billion IoT connections worldwide will use fixed, mobile and low-power wide-area (LPWA) networks by 2025. As the IoT market grows, so does the security risk. The discussions on how to secure the IoT are increasingly the focus of attention. An end-to-end IoT project consists of multiple, often diverse, devices, various platforms, layers, and interfaces, creating many dimensions to secure. Security has moved up the list of priorities for IoT projects. Telecoms operators, as IoT service providers, need to develop their IoT security capabilities with relevant products and skills to match their IoT strategy and ambition.

Telecoms operators need to develop security offerings to match their IoT proposition

Operators have a strong legacy in securing the connectivity layer with carrier-grade, embedded security solutions. Security requirements such as secure transmission, safe data and user authentication have been fused into the operator networks for decades and cellular networks are generally viewed as secure and reliable.

However, in the IoT market, operators increasingly address components beyond connectivity to capture a larger share of revenue. Moving up the value chain requires more specialist security expertise, which CSPs do not always have. Operators will increasingly need to do the following.

  • Map their security offerings closely to the IoT components of the value chain that they provide, such as the application, device and enabling capabilities like hosting. Providing enhanced security for devices beyond SIM authentication may not be familiar territory.
  • Tailor the security offering for their target verticals. This will require an understanding of the technical component of the offering but also regulatory compliance and business models. Those operating in the EU will need to understand GDPR compliance, for example.

Operators will need to partner or invest to align their security offering with their IoT proposition. Operators that already benefit from an internal cybersecurity unit, like Telefónica and Vodafone, may have the necessary skills to build their own solutions but most will still need to partner for some or all solutions. A few operators, primarily those that have invested heavily in specific sector expertise, may make strategic investments or acquisitions to bolster their offering. Bold moves such as this will send a clear message to the market about their intentions and role in the value chain. Interestingly, this bold approach is not confined to the large global operators such as Telefónica or Singtel. Smaller national and regional-focused operators with strong IoT business units, such as KPN and Tele2, have acquired to strengthen their security credentials.

Despite the significant effort and investment required, it is unlikely that security will generate a significant new revenue stream in its own right. However, it will be critical in winning new business and potentially differentiating the operator’s service from that of competitors.

Figure 1: The operator’s role in IoT security must match the operator’s role in the IoT value chain

Analysys Mason chart: operators and IoT security

Security can help operators differentiate and strengthen their LPWA service

By 2025, more than half of the total wide-area IoT connections globally will be on LPWA networks. This will bring new and different challenges. Many of the devices connected to an LPWA network will be low-power devices with limited computing power, factors that will restrict security options.

Operators using 3GPP standards (NB-IoT and LTE-M) have a clear opportunity in the early phase of LPWA market development to differentiate their offering from the proprietary networks by marketing the inherent secure nature of their networks. Operators have been slow to promote the value of embedded standardised security in their cellular networks (although the real value of security may have only recently come to the fore). Providing additional security layers by design from the outset of the project will likely add some additional upfront costs but will reduce the overall costs of delivering security for the lifecycle of the project. For example, building in extra layers to secure and update the connected devices.

Operators could position security as a core differentiator to their LPWA proposition and:

  • promote the embedded security attributes of the network and the SIM and market the capabilities of their connectivity and device management platforms in detecting anomalies and mitigating the consequences – for example quarantining devices, OTA updates etc.
  • develop new capabilities internally or through partnerships to provide additional, value-added security layers that are cost effective for LPWA solutions – for example, some operators are exploring the idea of offering additional security in the SIM
  • ensure that their security offering addresses each component of the value chain where they provide solutions and leverage professional services and cybersecurity business units to advise on and implement security solutions.

IoT security could be an important differentiator

Selling IoT security solutions will not necessarily generate substantial revenue for operators. Security at the connectivity layer is embedded but should be a feature that could bolster the value of the connectivity offering. Security for other components of the value chain will be a premium service but is unlikely to generate significant revenue. However, IoT security will be a critical factor in winning IoT business with the potential to differentiate the operator’s service from its competitors.

The post Operators should match their IoT security strategies with their ambitions in the IoT market appeared first on IoT Business News.

IoT Business News

Battery tech will power global smart grid ambitions

Battery tech will power global smart grid ambitions

This week, the Energy Networks Association (ENA), which represents the distribution and transmission networks operators that deliver power to homes and businesses in the UK, launched a consultation seeking views on how to create a smarter electricity grid.

A particular focus will be the distributed energy technologies – including battery storage – that are needed to make the transition.

“The smart grid transition has the potential to create a whole new range of market opportunities for new technology and service providers, many of whom will be participating in the UK marketplace for the first time,” said David Smith, chief executive of the ENA.

Work to be done

He has a point. All the signs are that, right now, there’s a good deal more work to be done on batteries, which could prove to be an important source of flexibility for smart grids. Much of that work will be done by start-ups, but also by more established companies that branch out into battery technology. Either way, we will need more batteries, storing more energy, more flexibly, in the very near future. Their importance for the IoT cannot be understated.

According to Professor Philip Nelson, chief executive of the Engineering and Physical Sciences Research Council (EPSRC): “Batteries will form a cornerstone of a low-carbon economy, whether in cars, aircraft, consumer electronics, district or grid storage. To deliver the UK’s low-carbon economy, we must consolidate and grow our capabilities in novel battery technology.”

Nelson was speaking at the launch in July of a new government initiative that is promising £45 million to a ‘virtual Battery Institute’ for the UK, for collaboration between industry and academics “in the design, development and manufacture of electric batteries.”

Read more: UK aims for world leadership in battery tech

A global issue

But this certainly isn’t an issue for the UK alone. Every country has much to gain from advances in battery tech and both governments and venture capitalists recognize that fact.

In fact, battery tech is already attracting considerable investment. Total global funding raised during the first half of the year for the battery storage, smart grid and energy efficiency sectors topped $ 1 billion, a 25 percent increase over the first half of 2016, according to a recent report from Mercom Capital, a global clean energy communications and consulting firm

Of these three areas of focus, battery storage saw the biggest growth year-on-year in terms of funding, both from private equity and venture capital sources, rising from $ 179 million in the first half of 2016, to $ 480 million in the first half of this year. Funding recipients included Microvast Power, Vionx Energy and Moixa Technology.

Read more: Powervault to give electric car batteries a second life in smart homes

Renewable energy going to waste

Their work – and this money – is essential. Currently, much of the renewable energy collected in particularly windy or sunny conditions simple goes to waste, so better provision for storage of such power must be a priority.

And, at the same time, demand for power is changing fast. The growing use of electric vehicles is a big factor, as is the use of heat pumps to provide heating and cooling. Smart, connected devices in the IoT all need power – even those associated with controlling energy consumption, such as smart meters. Without new advances in battery tech, the IoT could run out of power pretty quickly. 

These issues and more will all be up for discussion at the Internet of Business Battery and Energy Storage event in Birmingham, UK in November. 

The post Battery tech will power global smart grid ambitions appeared first on Internet of Business.

Internet of Business

IIoT ambitions give rise to thriving start-up scene, says CB Insights

Smart, connected devices make plenty of headlines in the consumer world, but the IoT is also transforming heavy industry – and, in the process, fostering a thriving start-up scene.

According to research firm CB Insights, as companies in asset-heavy industries such as manufacturing, logistics, mining, oil and utilities turn to connected technology to streamline operations, funding is pouring into new companies that can help these customers to use machines and specialised sensors at every stage of production.

Just last year, start-ups working in the industrial IoT (IIoT) space attracted more than $ 2.2 billion in investment, according to CB Insights.

To highlight its diversity, CB Insights has created a so-called ‘stack’ of the IIoT start-up landscape, with companies categorised based on their specialisms in areas such as hardware, cyber security and analytics. This research has identified more than 125 start-ups in the IIoT space alone.

Read more: Only 1.5 percent of execs say their organisation has a clear IIoT vision

A slice of the pie

The influx of investment demonstrates that many different companies want to grab a slice of the global IIoT pie, which could be worth trillions in the years to come.

So far, the IIoT wave has been led by the old guard of industrial tech companies such as GE, IBM, and Cisco, who envision the IIoT as a core component of their future businesses,” says CB Insights.

But while these big firms certainly form a crucial part of the expanding IIoT market, that’s not to say they’re the only players.

Start-ups developing sensors, networking infrastructure and cloud platforms are also growing in importance. That said, many of them could get snapped up by larger players over the next few years – if their smart ideas prove to be compelling to customers.

Read more: PTC launches Kinex app range to simplify IIoT adoption

Sensor-network start-ups

Applied sensor networks is just one pioneering area in IIoT, and here, CB Insights sees a number of start-ups leading the way.

Veniam and Vnomics are companies developing pioneering sensor networks for connected fleets, for example, while companies such as GroundMetrics (locating wells), Tachyus (extracting) and Aptomar (spill safety) are using IoT to transform the oil & gas sectors.

Agriculture is also reaping the rewards of connected solutions. Blue River Technology and Farmbots are bringing robotics to farming, while Farmers Edge and Terravion are using analytics to improve production.

There are some great strides being made, too, in areas such as electricity and gas & water, thanks to start-ups like Trilliant, Tendril and BluePillar. They’re developing smart-meter products for large enterprises.

Finally, the factory floor is undergoing dramatic change. Eigen Innovations, for example, uses video and sensor data on factory floors to ensure process and quality control. Fetch Robotics is improving the way that warehouses are run and Alien Technologies does RFID tagging for the supply chain. 

Read more: Cybersecurity attacks on IIoT infrastructure expected to increase this year

Transforming big industry

Dmitri Tcherevik, chief technology officer of software company Progress, said that IoT sensors, algorithms and other technologies have the potential to transform big industry in many ways.

“IIot will be defined by the miniaturization of the computing elements, better power efficiency, better connectivity, growing sophistication of system architectures and machine learning algorithms,” he said.

“The explosion in the volume of data collected by the IoT sensors will require a significant portion of this data to be processed closer to the source. This will stimulate development of novel machine learning algorithms, such as federated, automated, and collaborative learning.”

“To take full advantage of the sensing, cognitive, and actuating capabilities of the billions of IoT devices, business analysts and application developers will need a new set of skills, too.”

The post IIoT ambitions give rise to thriving start-up scene, says CB Insights appeared first on Internet of Business.

Internet of Business

Customers unconvinced by insurance providers’ IoT ambitions

Customers unconvinced by insurance providers’ IoT ambitions

The majority of US insurance companies see a bright future ahead for themselves as homes increasingly become more ‘smart’.

According to new research findings released by IT services company NTT Data, almost nine out of ten (87 percent) expect the IoT to improve their relationships with customers, while 83 percent believe it will help them attract new ones. The study polled 1,000 US homeowners and over 100 US insurance companies in October 2016.

That’s not to say, however, that insurance companies don’t forsee hurdles ahead. According to the NTT Data report, IoT Disruption and Opportunity in the US Insurance Market, more than two-thirds (68 percent) believe that the inability to gain access to data from smart home devices will be a major challenge to finalizing nationwide programs. On top of that, 62 percent anticipate hurdles in building analytics into their underwriting processes and more than half (55 percent) are concerned about the expense required to purchase and install devices in customers’ homes.

“While enthusiasm for and investment in the smart home ecosystem is high among [insurance] carriers, major challenges still exist in its evolution,” said Normand Lepine, senior practice lead for insurance data and analytics at NTT Data.

“If carriers are to realize the anticipated benefits of smart home technology, they must first lock down the necessary business capabilities for adoption, including data analytics and data security, and find partners with proven IoT capabilities to help them prepare to deliver innovative services and products to their homeowner policy holders.”

Read more: The mainstream connected home remains distant dream, says Gartner

Customers lack conviction

Those policy holders may take some convincing, however. The research reveals a glaring perception gap between insurance companies and their customers when it comes to policy protection, security, price and IoT.

While 55 percent of insurance companies say, ‘It sounds great – sign me up!’ when it comes to smart home programs and policies, only 16 percent of customers feel the same way.

Likewise, almost three-quarters (72 percent) of insurance companies believe that customers feel protected by their homeowner policies, but only 37 percent of customers themselves agree.

And while 77 percent of insurance carriers say they really care about improving customers’ safety and security, less than one-third of customers (31 percent) believe that to be the case.

Read more: Flexibility will be key to dominating the smart home market

Keepers versus seekers

The research divides insurance customers into two categories. The first is the ‘keepers’, older customers who are less technologically savvy but more loyal to their insurance providers. The second is the ‘seekers’, those who are younger, early adopters of technology, less loyal to their provider and more likely to demand more personalized policies.

Seekers, unsurprisingly, are more willing to share data from smart home devices with insurance providers – perhaps in pursuit of a better deal based on their personal circumstances. Forty-seven percent, for example, would be happy to share data from a smart thermostat with their insurance company, compared to just 28 percent of keepers, and 59 percent would share smoke and carbon dioxide detector data, compared to 39 percent of keepers.

Neither group, however, was keen to share data from in-home security cameras: just 24% of seekers and 18% of keepers were prepared to go that far.

Seekers, then, perhaps present the most interesting opportunity for insurance companies, as well as the most risk. They’re more likely to install smart home devices, more likely to share the data, but also far more likely to defect to another provider, even those from outside the traditional insurance sector such as banks or retailers, according to the research.

The post Customers unconvinced by insurance providers’ IoT ambitions appeared first on Internet of Business.

Internet of Business