A snapshot on the IoT business in Asia Pacific

What role does Asia Pacific play for the Bosch IoT business?

Bosch is strongly committed to the region. The company has been present in Asia for almost a century. I am proud to say that we enjoy a great reputation here. This high level of trust in our products and brand is now helping us introduce IoT solutions in the region. But I never underestimate our competitors. Now that vendors are attracted to the Asian market’s high growth rates, they are taking it by storm. The competition here is especially tough.

Thomas Herrmann

Thomas Herrmann joined Bosch in 1996 as a project lead for automotive safety solutions. For several years, he occupied various leading positions within Bosch in the automotive and energy areas. Following his passion for connected devices and solutions, Thomas joined Bosch Software Innovations in July 2016. He is now supervising sales of the Bosch IoT Suite and marketing.

What is the current state of digitization and IoT in Asia Pacific?

When it comes to IoT, in a sense there is no Asia, or any other region. As they say, IoT has no borders. Take, for example, the projects with over-the-air software and firmware updates (SOTA/FOTA) we have done in Europe with car manufacturers. They are now selling their connected cars around the globe.

And yet there is no doubt that Asia is a leader in both IoT technology and adoption. In fact, IDC estimates that by 2020, Asia Pacific will be the global leader in IoT adoption, accounting for 8.6 billion of 29.5 billion connected devices globally. In many ways, this region is showing Europe and the rest of the world the way forward. At the same time, we can share our extensive European experience in Asia.

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Thomas Herrmann at Bosch Shanghai during a recent business trip

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Plantect launched by Bosch Japan is an innovative, Artificial Intelligence-based disease prediction system for greenhouse grown tomatoes.

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The canteen of Bosch in Singapore is connected for more thermal comfort

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Connecting oyster farms with Bosch IoT device management software decreased unnecessary harvest closures by 30 per cent in Australia.

Are there any particular regional differences regarding IoT in Asia Pacific?

The region is obviously very diverse. And of course, this is an incentive to pursue the IoT. In China, the fastest growing economy in the world, getting things done quickly is decisive. In Singapore, the audience first wants to know how something will pay off. In Japan, with its deep-rooted interest in technology, even top executives are very curious about technical details.

Which specific IoT software requirements do you see in Asia Pacific?

I think IoT gateway and device management are crucial parts of any software solution. The IoT isn’t possible without edge devices and gateways. Their connectivity is the foundation of the IoT, upon which all solutions are built. We all talk a lot about digital transformation and new business models based on the IoT. They will not happen unless we connect devices, but connecting them is only part of the deal.

Recently, IoT devices were dubbed an “enterprise security time bomb”: a survey revealed that the majority of companies can’t even identify them properly. They tend to get lost and forgotten on enterprise networks. And it’s no wonder. Can you imagine the time and effort required to manually manage millions or billions of devices? But the price of not doing it could be high. In the last two years, AT&T has recorded a 458 percent increase in the vulnerability scanning of IoT devices. The security risk can be prevented by using device management software to organize and monitor devices remotely. This also makes it possible to update their firmware remotely, thus eliminating yet another headache.

“When it comes to IoT, in a sense there is no Asia, or any other region. As they say, IoT has no borders.”

Thomas Herrmann, Vice President Sales and Marketing at Bosch Software Innovations Tweet this

What are your favorite Bosch IoT projects in Asia Pacific?

In Singapore, our customer MANN+HUMMEL develops smarter cleaning technologies in their IoT lab. Since the environment is a major concern in Asia and elsewhere in the world, it is a promising project that we support with our technology. MANN+HUMMEL is testing filters that collect and analyze data to improve cleaning performance and reduce fine dust pollution from vehicles. They are using the Bosch IoT Remote Manager, Bosch IoT Suite’s cloud service. With it, they manage the connectivity and functionality of what may grow to millions of field devices.

Another exciting project is an IoT solution for agriculture rolled out by the Australian start-up The Yield. Farming is a sphere in which the smallest change in environmental conditions, such as weather or water quality, can spell disaster. With us, the Yield developed a solution to help farmers monitor farms’ microclimate and the condition of their crops remotely – from oysters to apples. Not only does this save time, it also enables them to make decisions based on real data.

“Digital transformation means that, more than ever, technology powers organizations.”

Thomas Herrmann, Vice President Sales and Marketing at Bosch Software Innovations Tweet this

Beyond technology, what is on the IoT agenda in Asia?

Partnerships are very important. Digital transformation means that, more than ever, technology powers organizations. As a result, the traditional way of doing business, with strictly assigned roles for vendors and customers, is becoming a thing of the past.

New industry relationships are not about buyers and sellers. Rather, they focus on partnership and joint project development. We cooperate with our customers to identify a business case and apply technology, with the aim of creating an IoT solution that’s right for everyone. As we say at Bosch, “No one can do the IoT alone”.

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Adoption of IoT platforms to lead key trends dominating Asia Pacific technology market in 2018

Hitachi Vantara has highlighted 10 key trends that will dominate the Asia Pacific technology market in 2018 – with adoption of IoT platforms in pole position.

Hitachi Vantara’s CTO Hubert Yoshida and Asia Pacific CTO Russell Skingsley have worked together to predict the key trends. Some of the key trends highlighted by the Hitachi subsidiary are:

Adoption of IoT platforms by the IT sector to facilitate the application of IoT solutions 

IoT solutions are really fast in turning out to be a strategic imperative in almost all industries and market sectors in addition to delivering insight to support digital transformation. Enterprises are expected to look for an IoT platform that offers an open, flexible architecture which eases integration with complimentary technologies.

Growth of analytics and artificial intelligence

It has been predicted that 2018 will witness real growth in analytics and AI as enterprises start realising the real returns on investments. Skingsley commented: “AI became mainstream with consumer products like Amazon Alexa and Apple Siri, and Hitachi believes that it is the collaboration of AI and humans that will bring real benefits to society.”

Blockchain to take centre stage

For two possible reasons it is believed that blockchain will take the centre stage in 2018. First, the use of cryptocurrencies and second an increase use of blockchain by the financial sector for several day-to-day processes such as customer documentation and regulatory filings.

Smart storage of data

Although there is advancement in digital transformation among enterprises, the issue arises when they are not able to access their data as it is stored in “isolated islands” making it costly to extract and use. Object storage has become “smart” with the help of software which helps in searching and reading content in multiple structured and unstructured data silos and analyse it for cleansing, formatting and indexing.

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IBM and Arrow Electronics team up to promote Asia Pacific IoT

Arrow Electronics has joined hands with IBM to fuse its services with IBM’s Watson Internet of Things (IoT) platform and cloud services, the companies have announced.

With this development, Arrow now offers customers in Asia Pacific access to more than 160 industry-leading cloud services to incorporate ready-to-use capabilities, such as artificial intelligence (AI), blockchain, advanced data analytics and cyber security into their latest IoT inventions through the IBM Watson IoT platform via IBM Cloud. The platform, being a fully managed, cloud-hosted service, is designed in a way to fully extract value from IoT devices.

IDC reports IoT is set to grow exponentially in Asia-Pacific from 3.1 billion to 8.6 billion by 2020, creating a $ 583 billion market opportunity, with startups serving as a critical driver to this growth, but lack of resources and technical expertise holding them back from experiencing IoT’s full potential.

Similarly, industrial IoT solutions provider CASCADEMIC seeks to benefit from Arrow and IBM’s joint offerings. The company views itself in a strong position to empower its customers and partners to develop smart city applications with integrated IoT solutions that will help significantly reduce development costs and time-to-market.

Esmond Wong, vice president of supplier marketing and semiconductor for Arrow’s components business in the Asia-Pacific region, said: “Our combined offering can seamlessly help technology innovators and enterprises build IoT solutions from silicon to cloud to application. The ability to capture and connect data points generated from IoT devices enable them to derive insightful business intelligence and then turn them into decisions for value creation.

“Arrow is removing barriers and providing the engineering expertise, resources and services that entrepreneurs need to develop innovative and intelligent connected products.”

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Most IoT hacks originate in Asia, honeypot data reveals

Most IoT attacks originate in Asia and seek to compromise specific types of unsecured IoT devices, such as video cameras, according to data collected in honeypots by researchers at IT consultancy Dimension Data, part of global telco NTT. 

The Dimension Data report, The Executive’s Guide to the NTT Security 2017 Global Threat Intelligence Report, analyses data from the networks of 10,000 clients across five continents, 3.5 trillion security logs, 6.2 billion attempted hacks and global honeypots and sandboxes located in over 100 different countries.

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

Honeypots shed light on attacks

Over a six month period, security researchers used global honeypot sensors – specialized security tools that pose as ordinary IT systems in order to attract and identify hackers – to monitor IoT attacks.

They used data collected in this way to investigate the geographic source of each IoT attack, to find that six out of ten attacks originate in Asia, with 21 percent from the EMEA region and 19% from the Americas. “Mirai distributed denial of service activity accounted for this significant amount of detections sourced from addresses within Asia,” states the report.

“The most likely reason for the high volume of attacks from Asia is that technology sourced from this region has historically been susceptible and that compromised infrastructure tends to be reused to perpetrate additional nefarious activities,” they add.

They also found that two-thirds (66 percent) were attempting to discover specific IoT devices, such as particular models of video camera. Just three percent were seeking a web server or other type of server and 2 percent were attempting to attack a database. The remainder covered a variety of other targets.

Read more: Security researchers find backdoor in Chinese IoT devices

Beyond DDoS

But while distributed denial of services attacks via IoT devices may be the most recognized kind of attacks, they are not the only threats about which companies need to be aware, according to the report.

Compromised IoT devices, it says, can also be used for spying on individuals or organisations through IoT camera surveillance; obtaining personal information by intercepting data flowing through a device; manipulating operational technology [OT] devices to inflict physical damage; and launching internal or external attacks from the compromised IoT or OT device.

Companies must make security a primary consideration for all IoT and OT device purchases, say the researchers. “Favour devices that have robust built-in security capabilities,” they advise. “If none are available, look at traditional technologies that might be easier to secure.”

Another tip: authorise funding as needed to replace older IoT and OT devices that are no longer supported by vendors. “IoT devices will likely become increasingly difficult to manage. They should be centrally managed, configured and maintained to ensure that effective and appropriate risk and security measures can be implemented,” they write.

And, of course, companies need to ensure that managers know which IoT devices have been implemented and where. “A robust security programme must ensure that asset inventories exist and are maintained,” states the report.

Elsewhere in the report, the researchers consider cyber attacks of all kinds (not just those targeting the IoT), to find that attacks on the government sector doubled in 2016, hiking to 14 percent from just 7 percent of all cyber security attacks in 2015. Attacks on the finance sector also rose dramatically, from just 3 percent in 2015 to 14 percent of all attacks last year. The manufacturing sector came in at third place, accounting for 13 percent of attacks, while retail was in fourth place (11 percent).

Read more: No more security through obscurity for IoT device makers

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Asia leads the world in digital transformation

Digital transformation, brought about by the advent of the Internet of Things, is quickly moving beyond the realm of forecasts and overhyped speculations to become a daily reality. We are seeing more brand-new business models appear every day as more and more companies make the big shift to completely new ways of generating revenue, and as billions of additional devices get connected.

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What does this mean for Asia, and how is the region faring with this digital transformation? The Asia-Pacific region is home to some of the world’s fastest-growing economies, 60 percent of the world’s population, and, by 2019, a full 50 percent of the global internet user base. It is thus not surprising that Asia actually leads in digital innovation, ranking ahead of many other regions including Europe and the Americas.

Asian consumers are leapfrogging their peers when it comes to digital technology

According to the Economist Intelligence Unit (EIU), for companies in Asia, leadership in digital transformation is often the result of consumer pressure . In many ways, Asia is becoming the place where consumer companies are figuring out how to future-proof their businesses. And nowhere is this truer than in China. That’s because consumers in China are leapfrogging their peers elsewhere when it comes to digital technology .

People’s lives in Asia are strongly based on technology ; it has penetrated all aspects of their daily activities far more deeply than in many other parts of the world. Take for example messenger applications. These are widely used across the globe, but China has taken the idea of a messenger app to a whole new level with its WeChat platform, which combines the capabilities of a classic website, a product catalog, an online ordering and payment system, a newsfeed, and a social network thanks to its unique app-within-an-app model. The WeChat platform helps people organize their entire life, and they spend hours every day consuming services through it. As a result of such a profound integration with technology, the boundary between people’s work lives and private lives has essentially disappeared.

Asia is also home to a growing number of technology giants. In 2014, Asia’s top ten smartphone brands – the likes of Samsung, LG, Xiaomi, and Sony – already accounted for 69 percent of global handset sales. And because of the associated ecosystem, a third of the world’s 2.3 million app developers are based in Asia.

Such companies are driving innovation in all facets of digital business, including the smart home – now a reality in Asia. In South Korea, SK Telecom has partnered with LG and Samsung, as well as construction firm Hyundai E&C, to build fully connected apartments, and market leader LG Uplus has also introduced a plethora of innovative services. This includes sometimes surprising but very popular new services such as connected rice cookers and even a connected pet feeder! There are now an estimated one million users of smart home services there, with the market volume in South Korea alone expected to grow to USD 19 billion in the next two years.

Asia-Pacific companies are embracing digital transformation

We are seeing, and are involved in, significant innovation drives in Asia in such sectors as manufacturing (a.k.a. Industry 4.0), transportation, energy, and logistics:

Source: Frost & Sullivan White Paper on Asia Pacific Industrial IoT Market

And it isn’t just cost and efficiency pressures that are driving such developments. Companies are actually developing digital skills and capabilities to ensure they can stay ahead of the competition.

According to IDC, 60 percent of Asia’s top 1,000 enterprises will have placed digital transformation at the center of their corporate strategies by the end of 2017, with the majority creating an independent position (think Chief Digital Officer) to oversee the implementation of their digital transformation strategy.

The same can be seen on the infrastructure side: the Cloud Readiness Index (CRI) 2016 (including physical infrastructure, international connectivity, broadband quality, green and sustainable policies, and data center risk) put Asian countries ahead of their counterparts in other regions (1st Hong Kong, 2nd Singapore, 3rd U.K., 4th New Zealand, 5th Germany, 6th Australia, and 7th U.S.)

Source: Cognizant Center for the Future of Work, 2016 (graphic extracted from: https://www.cognizant.com/whitepapers/the-work-ahead-the-future-of-business-and-jobs-in-asia-pacifics-digital-economy-codex2255.pdf)

According to Cognizant’s survey of 300 companies in Asia-Pacific, digital transformation has the potential to double revenues by 2018. Asian firms therefore spend an average of 15 percent of their total revenues, higher than the global figure of 11 percent, on digital initiatives.

IDC estimates that, by 2020, enterprises pursuing digital transformation strategies will more than double their software development capabilities, and in 2018, 35 percent of IT resources will be spent on supporting the creation of new digital revenue streams. Organizations are expected to spend up to 30 percent of their IT budget on risk, security, and compliance by 2017.

Manufacturing and Industry 4.0

Manufacturing companies continue to invest in technologies that drive digital transformation. According to Future Market Insights, this made Asia-Pacific the largest revenue contributor to the global smart factory market, already accounting for USD 20.4 billion in 2014. This is attributed mainly to increasing investments in manufacturing plants in the region, but market penetration, expansion, product innovation, and operational efficiency also remain top business priorities in this area.

Governments in Asia that are very involved in helping new industries develop proactively support this development. For example, “Made in China 2025” is an initiative to comprehensively upgrade Chinese industry to enable the realization of Industry 4.0. The core of the plan is focused on developing leading-edge technologies through investments in R&D from state and industry sources, accumulating intellectual property, setting distinct technical standards, and leveraging access to the Chinese market in exchange for foreign technologies.

The role of IoT in Asia-Pacific governments’ push for digital

Equally, we see that Asia’s governments are making the push for digital . Singapore, China, South Korea, Japan, and even India have made extensive efforts to develop smart cities and smart economies. Singapore is also leading the Asian Digital Transformation Index, ahead of South Korea, Japan, and Hong Kong. Its open data portal, launched in 2011, has made more than 680 datasets from around 70 government agencies and ministries freely accessible to the public. Citizens and businesses have leveraged this data to develop more than 150 web and mobile apps.

The IoT is clearly being utilized as a catalyst to drive the digital transformation. The “smart” visions of governments entail the use of the cloud, big data, and billions of sensors (including cameras) monitoring and controlling nearly every detail of the environment. This will also enable citizens to be connected to every aspect of government services on demand. Eventually, IoT devices deployed in offices, transportation systems, and public housing will feed real-time information to governments to monitor, maintain, and improve the daily lives of their citizens.

A change in mindset is needed

Digital transformation requires change, and to a great extent, reinvention . Some of the key challenges to embracing digital include the need for new forms of investment and changes to organizational structures. Companies embarking on digital transformation need to focus on developing the right skills – not just in technology, but also softer skills. A digital world runs at a much faster pace; decisions are made in periods as short as three months rather than a year. As stated in the latest white paper on digital transformation and customer success compiled by Bosch Software Innovations, “companies need to start experimenting either very early or very fast. Most people are uncomfortable doing it but they need to test new things on the market and, if they work, scale up quickly”.

The process of digital transformation has most certainly commenced in Asia and is steadily gaining momentum, putting the region at the forefront of the world’s digitalization trend. Organizations are embracing digital transformation and this has resulted in visible productivity improvements, greater cost savings, expanded reach into new markets, and the development of new customer segments. This is largely due to Asia’s willingness to “think big,” leverage technology innovation, experiment, and also cannibalize existing revenue streams. As a natural result, the IoT is huge in Asia and digital transformation has become truly alive here .

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