Is India ready for an IT revolution?
Oct 07 2014
The market capitalisations of traditional IT services behemoths in India have been built on the foundation of cost arbitrage. These companies typically have campuses with large deployments of in-house server farms. Yesterday, these campuses constituted an entry barrier. Tomorrow, with cloud computing becoming inexpensive and available, they may be a liability. So, the model is clearly wilting.
India has produced a Snapdeal here and a Flipkart there, but it is yet to produce a company that has the scale and resilience of a Baidu or an Alibaba. With the exception of iflex which is now part of the Oracle stable, we have not produced any other large software products company.
But a new bus has arrived and the question is — will we jump into it on time? It is being called the internet of things (IoT). So what really is the ‘internet of things’? Wikipedia defines it as, “the interconnection of uniquely identifiable embedded computing devices within the existing internet infrastructure. Typically, IoT is expected to offer advanced connectivity of devices, systems and services that go beyond machine-to-machine communications and cover a variety of protocols, domains and applications. The interconnection of these embedded devices (including smart objects) is expected to usher in automation in nearly all fields.”
According to a recent study conducted by Deloitte Consulting, IoT is really about the collection, analysis and use of unprecedented amounts of real-time data that will disrupt the way many organisations do business today. The IoT concept involves connecting machines, facilities, fleets, networks and even people to sensors and controls, and then feeding the sensor data into advanced analytics applications and predictive algorithms as a way of enhancing automation along with improving maintenance as well as operation of machines and entire systems — and in some cases, even enhancing human health.
As connected devices proliferate and networks penetrate into remote regions, the potential for IoT solutions and growth in the IoT ecosystem has increased. If IoT solutions can improve enterprise adopters’ fundamental business values — not just savings and risk management, but also revenue growth and innovation — demand for new uses of connected devices will grow. At a higher level, IoT has a role to play in helping companies create more sustained value through moving from a one-time transaction to a continuous relationship with customers, suppliers, workers and assets. Already, agriculture is experimenting with more efficient irrigation and soil monitoring. For building smart cities in the future, IoT will be a key concept.
A Gartner study predicts that by 2020 — which is only 6 years away — there will be 26 billion connected devices on IoT. We will have IoT applications on logistics, transportation, healthcare, privacy, safety, energy savings, building automation, manufacturing and environmental monitoring, to name a few. The applications will come in several genres. They may spring from ambient intelligence, to building the architecture of IoT, to designing the security system as well as to creating objects (several trillion) and finally to manufacturing remote devices.
Cisco Systems’s CEO John Chambers has said that the ‘internet of everything’ — connected products ranging from cars to household goods — could be a $19 trillion opportunity. Ericsson is equally gung-ho about IoT: “We believe the internet of things will have a profound impact in the future. Enabling anything to be connected and providing ‘smartness’ to these connected things will bring value across a number of sectors in the networked society.”
However, there are concerns about IoT too. But India should look for opportunities in these risks. For instance, security and privacy are huge concerns. In a January article in Forbes, cyber security columnist Joseph Steinberg listed many internet-connected appliances that can already “spy on people in their own homes” including televisions, kitchen appliances, cameras and thermostats. On the back of the proliferation of connected devices, a new security and privacy opportunity is emerging.
A second concern regarding IoT technologies relates to the environmental damage of the proliferation of semiconductor-rich devices. IoT will tend to deploy a wide variety of heavy and rare-earth metals and highly toxic synthetic chemicals. The western answer is to use landfills and try recycling strategies. India is good both at frugal innovation and creativity in green and alternative technologies. Hidden in these legitimate concerns are huge opportunities. The cradle of the PC revolution was the US, while the Bethlehem of mobile phones was Europe. Can Asia, with its software prowess and manufacturing capability, combine to become the hub of the IoT revolution? The IoT bus is approaching and the question really is — is India ready to jump in?
(The writer is managing director of Deloitte Consulting, India. These are his personal views)