Benefits and Future of the IoT

New Horizons: Welcome to New Horizons, the podcast channel for Huawei’s ICT Insights Magazine, and today in our Industry Analysts segment, I’m pleased to introduce Dima Tokar, Co-founder and Head of Research at MachNation. Thanks for joining us today, Dima.

Dima Tokar: Great to be here.

New Horizons: So Dima, can you tell us a little bit about yourself and what drove you to become an analyst?

Dima Tokar: So, I’ve been in the technology space for quite some time, and I’ve always been passionate about mobility and about helping enterprises and helping consumers improve their lives with technology. And so I spent a lot of time in product management helping build great software, platforms, and other technology that is used both by enterprises and end users to make their lives easier, to help save costs in an enterprise and things like that. And so about five years ago when IoT was in its infancy. I started talking to a good friend of mine, Steve Hilton, who was an analyst for many years. And I kind of thought I’d give it a shot. Coming from a product side, I thought I had a lot to add to a complex space that was quickly evolving. And so five years later, here we are.

New Horizons: Great to know. So tell me about MachNation; What are you focusing on?

Dima Tokar: So MachNation is an industry analyst firm that’s exclusively focused on the IoT space. So we work with enterprises, service providers, and vendors to really help understand where the space is going, and help provide strategy, advice, and feedback on both the business side as well as well as the technology side; and we’re really about are not just looking at sort of the 40,000 foot view. But one of the other things that MachNation is really focused on and something that makes us quite unique is that we actually use the technology. So we’re very hands on in our evaluations and we strive to understand technology, not just from sort of slides and PowerPoint and demos, but really getting our hands dirty and really trying things out so that we can help both vendors and enterprises make the best decisions.

New Horizons: Regarding IoT and M2M, is IoT just an extension of M2M or machine-to-machine? Can you help describe that market space and how it’s evolved over the past few years?

Dima Tokar: Yeah, so, we view IoT as an evolution of a space that was formerly known as M2M and the distinction that we draw at MachNation is that M2M was really all about connecting a machine to some other part of the enterprise. And so being able to collect telemetry data from a truck like, right, we’d been doing that for many, many years. So that’s not, that’s not new and M2M is a part of what IoT is today, right? We still connect machines to other assets or to central systems. The evolution of IoT is really all about, it’s not just machines but involving people and process in the mix.

And so it means changing how the business is run based on the information that you have from those machines or allowing some people’s jobs to be much more, much safer, or much easier, much more efficient by providing them with additional information coming from the connected things as well as control of those things from remote places, and so IoT is bigger than just M2M. And M2M was primarily an enterprise type engagement. It was really about business stuff. Whereas IoT really spans all facets of our lives. It’s sort of involved in enterprise of course, but it also involves consumers; it involves public sector organizations and governments, where all of these organizations are trying to either cut costs, or create new revenue streams, or just provide better access to its citizenship, or provide better service to their citizens and really enabled them to do things that they couldn’t do before.

New Horizons: So how are service providers or carriers using IoT? How are they looking at that space?

Dima Tokar: Yeah. So, service providers today, in the IoT space, their primary service that they offer right now is connectivity, and this is what they’ve been offering in the M2M space as well. In today’s world, carriers are all looking at ways where they can offer services beyond just being a pipe. And this is where service providers are looking at IoT as a way to provide additional value to their customers. So that might mean they’re providing a platform, a software platform on top of which enterprises or systems integrators can build solutions. Or you could even be offering end-to-end solutions to customers. So for instance, it could be a connected car solution offered by a carrier in the market today, or it could be a smart factory monitoring solution that a carrier or service provider can offer to an enterprise and provide them with value on top of the connectivity that they are probably are already giving them.

New Horizons: So would you consider a Safe City or a Smart City IoT deployments? I mean, it involves different types of technologies, people, and processes, which is one of your definitions. But do you consider that to be part of IoT or could that be an extension of an IoT deployment?

Dima Tokar: Yeah, absolutely. I think Smart Cities are a broad concept that includes things like smart transportation and city safety, and it includes smart oil and gas for metering. So Smart City to us is a broad umbrella term that covers a variety of really interesting IoT solutions that are, some of them are going to be offered by the government. Others are going to be offered by private enterprise such as say rideshare or carpooling and things like that. All of this, all of these technologies today that are naturally evolving are, to us part of IoT; they’re ultimately about connecting people, process, and things.

New Horizons: What about the enterprise? We’ve talked about carrier, Smart City, Safe City, but for enterprises, what are some of the best use cases you are seeing that are already deployed using IoT?

Dima Tokar: So in the enterprise setting, we see a lot of enterprises today that are trying to figure out how to build a more cost effective business, and how to drive new revenue streams by introducing IoT into the mix. So for instance, we’ve talked recently with a large Nordic welding manufacturer. So now a company that’s traditionally very heavily engineering-focused and you wouldn’t really think of them as an IoT company. But at the end of the day, all of these companies that produce physical products are looking for ways to engage with their customers, to know how their customers are using their products; and they’re connecting their equipment in order to have this information and to be able to know what kinds of features and capabilities are being used so they can make sure that they focus their engineering efforts internally to build a better product for the next iteration.

And sort of at the same time, if they see that a certain capability isn’t really used by their customers, they can determine that this is not a worthwhile investment. So there are a lot of really interesting use cases like that where new revenue streams are being generated; and also, from an enterprise perspective, many enterprises are also looking at solutions such as preventative maintenance where they can monitor machines or have the original equipment manufacturer, the OEM, monitor the machines to predict when a failure might occur, and thus be able to implement the fix before that failure results in downtime. So in other words, it’s not just about new revenue streams, but it’s also about business efficiency, and about reducing downtime, and providing a higher reliability and level of service to the customers.

New Horizons: Well, that’s great to know. So where do you think IoT will be in a couple of years? Obviously, new use cases are coming on board all the time. The industry will continue to mature, vendors offerings will mature, but what are, what are some super interesting things are new use cases for IoT going forward?

Dima Tokar: So we’re envisioning that, and we already see a little bit of this today, that edge computing is going to become a bigger and bigger part of what is important in IoT. And we believe that edge computing will enable a lot of new types of use cases that weren’t really possible with a sort of a pure cloud-based hub and spoke model. So in other words, you know, there are a lot of use cases where you can’t simply connect the device to the cloud because there might be bandwidth restrictions, or latency requirements, or security and privacy concerns that prevent an enterprise from being able to send all of the data to the cloud.

And so edge computing is essentially a capability that allows an enterprise or a service provider to offer services close to where the data is being generated: So close to the factory floor, or in the hospital setting, or on the streets of a Smart City. And this type of technology we believe will be required in roughly 80 percent of the industrial IoT use cases. And so it’s, it’s really significant. And so I think the trend that we’re seeing is that it’s not a conversation of cloud versus edge. It’s really cloud and edge. It’s a combination of doing certain things in the cloud that the cloud is best suited for. So for instance, we could think about machine learning and how training a machine learning model would be something that you would do in the cloud, but then running that model close to the edge where the factory floors is located, where you have a Smart City where a lot of things have to be done really quickly with really low latency and that’s a trend that we think is going to become more and more pervasive over the next few years.

New Horizons: So how does MachNation help enterprises along their IoT path?

Dima Tokar: So MachNation spends a lot of time understanding the complexities of the IoT ecosystem. We spend a lot of time understanding the viable business models. We spend a lot of time understanding the technology that allows these business models to be possible. We spend a lot of time working with enterprises to go through the challenges of taking their products that may not be connected and helping them along the path of both sort of technology implementation and vendor selection as well as the operational challenges of how do you take something that was disconnected, managed onsite, and bring it into the 21st century where you have centrally-managed, where you have centrally managed systems, where you have new technology in place and a new process that needs to govern the entire IoT ecosystem.

Our value that we add to enterprises is through the hands-on testing that we do with a lot of vendor products, and so we spend a lot of time not just talking to vendors, not just talking to enterprises and service providers, but we spend a lot of time using the technology because we believe that ultimately the only way to understand a lot of the complex technology that enables IoT is to roll up your sleeves and to actually go hands on. And so we actually test different IoT platforms, and we help enterprises understand the nuances between the different vendor offerings and which type of a platform ‒ and which type of a set of technologies – is ultimately the best fit for an enterprise’s future IoT solution.

New Horizons: So that leads me to my last question. I was interested in your IoT edge scorecard. Is that an example of what you were explaining just now?

Dima Tokar: So the edge scorecard is a one of a series of documents that we produce that look at the different vendors in this space; and it helps distill a lot of the complexity and a lot of marketing that we hear in the space today. And you know, we believe that ultimately in IoT marketing is not reality. And we published these documents such as the edge scorecard to help enterprises, vendors, and service providers better understand the technology and the implications of that technology for their business. And so in a scorecard such as the edge score card, we will take a representative sample of vendors that are doing really interesting things around edge compute, edge analytics, edge integration. And we break down the market into components that are easily digestible by enterprises that may not be IoT experts, and we make it easier for these enterprises to move along the path of a digitally transforming their business.

New Horizons: Okay. Sounds very exciting, and good luck to you and your business. We look forward to working with you in the future. And I thank you for being our guest.

Dima Tokar: It’s a pleasure being here again.

New Horizons: We’ve been talking to Dima Tokar from MachNation. Thanks everyone for listening. Please join us again soon.