Securing the Internet of Things Opportunities and Challenges with scaling IoT solutions Rob van den Dam Global Telecom Leader IBM Institute for Business Value
IoT is IBM s # 1 research area Dublin Research Labs Smarter Cities Industry Solutions Labs TSL Russia (Moscow Satellite TSL) Institute for Business Value Almaden c Big Data & Analytics Storage Nanotech Healthcare c TSL North America (Austin, Texas) Watson Semiconductors Systems Software & Services Big Data & Analytics TSL Europe (La Gaude & Montpellier, France) TSL Israel & Telecom Research Lab (Haifa Satellite TSL) Telecom Research Lab (New Delhi) TSL India (Bangalore Satellite TSL) TSL China & Telecom Research Lab (Beijing) Internet of Things Smarter Cities ASEAN (Kuala Lumpur Satellite TSL) Japan (Tokyo Satellite TSL) Centers of Excellence TSL LATAM (Sao Paulo, Brazil Satellite TSL) Worldclass Partner Ecosystem South Africa (Johannesburg, Satellite TSL) South Africa (Johannesburg, Satellite TSL) Telecommunications Solutions Lab (TSL) Telecommunications Research Lab
IBM Investing $3 Billion in Internet of Things ARMONK, NY - 31 Mar 2015: IBM (NYSE: IBM) today announced that it will invest $3 billion over the next four years to establish a new Internet of Things (IoT) unit, and that it is building a cloud-based open platform designed to help clients and ecosystem partners build IoT solutions.
The IoT is poised to changed everything The Internet is evolving to connect people to physical things and also physical things to other physical things all in real time. It s becoming the Internet of Things (IoT): Billions of interconnected smart devices measuring, moving, and acting upon all the bits of data that make up daily life.
Leading companies are already working on applications for IoT connected devices Self - integrating - configuring - learning - healing - driving - socializing
IoT solutions are changing the way work gets done and improving the top and bottom line 23% of C-suite executives believe IoT will spark a new wave of innovation at their companies, while 29% believe IoT will inspire new working practices or processes. Economist Intelligence Unit
However, challenges regarding security, privacy, and common standards must be overcome Malicious actors intent on taking control of data, identities, and passwords will exploit Internetconnected devices that are not securely developed, making them easier targets than traditional PCs, laptops, or tablets. IBM X- Force Threat Intelligence
Data and analytics: the vital spice in the IoT IoT is expected to create 100ZB of data per year in China alone by 2030. IDC 41% of decision makers surveyed say their organizations plan to collect and process IoT-related data close to the point of creation. IDC
To innovate, operate, and engage at the next level, data must be turned into insights 90% 60% Volume of data created at the edge of IoT that is never captured, analyzed or acted upon. Amount of that data that loses its value within milliseconds of being generated. Source: IBM http://www-03.ibm.com/press/us/en/pressrelease/46453.wss 9
Data, Cloud and Engagement are key to accelerate the IoT DATA Unlocked from billions of connected devices CLOUD Standards based connectivity from anywhere ENGAGEMENT New revenue opportunities created from insights
Systems of Insight can be created by unlocking DATA from billions of interconnected devices By 2020, Internet of Things spending will rise Today to $3 trillion and nearly 30 billion devices In a few Source: IDC MaturityScape Benchmark: Enterprise Mobility in the United States, IDC, May 2015 years
The ultimate app for CLOUD; IoT takes computer power out of the data center The cloud is critical for devices beyond the reach of the data center to connect and communicate from anywhere in the world through open standards. Cloud computing reduces the complexity of supporting the Internet of Things data blending. 07/15/15
Insights that lead to new ways to ENGAGE; mobile and social are changing expectations on engagements Personalized and instant are the new expectations for engagement. Internet of Things gives businesses access to product usage data they ve never had before. Personalized services designed from usage data creates opportunities for new sources 07/15/15 of revenue.
We are at the threshold of a massive explosion in the history of computing 28.1 billion in 2020 IDC By 2020, each human being will 40.9 billion forecasted for 2020 ABI Research connected devices Frost_Sullivan have an average of 5.1 By 2020 exceed 26 billion units worldwide. Gartner
The first wave of the IoT is already here. It s the Internet of billions of Things We have seen visible successes in high value applications But demand has been slow to take off in many other areas Continuous Monitoring of Jet Engines Proportion of Heavy Industrial Equipment Networked 30% Automated Smart Meters Proportion of Smart TVs being used for Internet Viewing 10%
Market expectations are enormous, but IoT business models are already broken The Internet of Video Things already needs a REBOOT
IoT solutions that work for billions of devices won t necessarily scale to hundreds of billions of devices High Cost Lack of Privacy Not future proof Lack of functional value Broken business models
High cost of supporting and maintaining hundreds of billions of smart devices will be substantial Support agreements High buy prices, short life cycles Mismatch between cost and revenue Low margins, high life cycles
Lack of Privacy; the Internet is no longer a place of trust Centralized authorities become single points of failure No trusted partners on the The Internet was original build Internet for convenience and on trust
Not future-proof; average life of IoT devices will be decades Average Expected lifecycle 18 to 36 months ± 10 years ± 40 years Cost of maintaining smart devices can outlast > 40 years product and manufacturer obsolescence
Lack of Functional Value; connectivity and intelligence is a means to a better product, not an end A smart, connected toaster is of no value unless it produces Simply enabling connectivity does not make a device smarter or better better toast
Broken business models > as a result profits remain elusive Imagine the connected toaster of the future... And ask yourself a few questions Lack of sustainable business models is holding the IoT back
To see how unrealistic the expectations are with current business models, just apply the toaster test Would you be willing to pay an annual subscription for software updates to your toaster?! How much time are you willing to spend updating the software in your toaster?! Would you be comfortable seeing advertising burned into your morning toast?! Are you willing to only buy bread from the company making the toaster?! Do you trust the toaster maker (or the NSA) not to sell data about your heavy consumption of Pop Tarts to your health insurer (who may then choose to charge you higher premiums for unhealthy behavior)? If it doesn t work for the toaster, it may not work for your door lock, garage, light switch, toothbrush or toilet bowl.
To get the second' wave of the IoT, it needs to be redesigned based on 3 architectural principles Design for radically lower cost: Embrace distributed computing, peer to peer networks and device based analytics eliminating costs associated with the IoT cloud Design for real privacy: Privacy and anonymity ensured by design, opt-in only, open source, transparent encryption for secure messaging and file transfers Architectural principles Design for business model endurance: Transfer ownership and maintenance responsibility from manufacturers to networks of self maintaining devices
To be secure and scalable, the IoT will evolve to be more open and decentralized Before 2005 Today 2025 and beyond
A truly decentralized IoT solution will require 3 foundational functions to be supported Autonomous Device Coordination Device Coordination Secure Distributed File Sharing Trustless Peer to Peer Messaging Messaging File Transfer
The set of foundational principles is an opportunity to change the model of Internet services and security Autonomous Device Coordination Secure Distributed File Sharing Trustless Peer to Peer Messaging No single arbiter of roles and permissions Owner/user defined interactions Autonomous transaction processes Trustless network of interactive devices No cloud based file transfers Secure file and data sharing Software/firmware updates Device based analytics reporting No centralized broker of messages Trustless encrypted messaging and transport Low latency, guaranteed delivery Store and forward capabilities, hop-ons
A secure and scalable IoT solution can be built on open-source technology Blockchains Example P2P decentralized filesharing Example P2P messaging protocols Example No single arbiter of roles and permissions Owner/user defined interactions Autonomous transaction processes Trustless network of interactive devices No cloud based file transfers Secure file and data sharing Software/firmware updates Device based analytics reporting No centralized broker of messages Trustless encrypted messaging and transport Low latency, guaranteed delivery Store and forward capabilities, hop-ons
Not every system needs to be centralized, however Device Value Device Longevity
Democracy of Devices By empowering devices to function autonomously, the edge will become a frontier of new economic value, creating an ECONOMY OF THINGS
Devices on the edge can be empowered to function autonomously in the IoT
New Marketplaces hosted by peer exchanges can provide liquidity for transactions between devices Similar to financial exchanges, peer exchanges can match supply and demand
The digital world The Internet created liquid markets of the digital world MUSIC NEWS WEATHER TRAFFIC MAPS
The physical world The Internet of Things will do the same for the physical world REAL ESTATE MANUFACTURING AGRICULTURE RETAIL TRANSPORTATION
Creating liquid marketplaces of physical assets by enabling real-time discoverability, usability and payment Physical world The liquification of the physical world
The economic models can be constructed around the three vectors of disruption from the IoT 3 Vectors of disruption
The transformative business opportunity What will be the likely impact of the Economy of Things on the different industries? What are the means by which value can be from the IoT? How can industry players play a key role in this transformation?
Recommendations Evaluate opportunities for new marketplaces Analyze IoT data and act on insights Begin the journey for collaborative value
Thank you www.ibm.com/iibv Rob van den Dam Global Telecom Industry Leader IBM Institute for Business Value rob_vandendam@nl.ibm.com