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APAC IoT adoption improves amid challenges

More enterprises across the region are using the internet of things to track fleet vehicles and improve operations, but technology integration and security concerns are still holding back widespread adoption

This article can also be found in the Premium Editorial Download: CW Asia-Pacific: CW APAC: Trend Watch – Internet of Things

A year may not seem a long time for most people, but in the technology industry, a year can a significant period, and this is especially true of the internet of things (IoT).

A year ago, some industry watchers noted that IoT adoption in Southeast Asia was still in its infancy, with just 8% implementing the technology – but the situation seems to have improved.

A Gartner technology agenda survey of CIOs in Southeast Asia, conducted earlier this year, reported that 11% of CIOs ranked IoT as their “top game-changing technology,” while 21% said they would increase spending on IoT in 2019.

Counterpoint Research analyst Satyajit Sinha told Computer Weekly that, by the end of 2018, ASEAN countries had contributed 1.1% of global IoT cellular connections. Within ASEAN countries, Indonesia accounted for 39% of connections, and Malaysia 26%.

Technology advisory firm Ecosystm recently revealed that the Asia-Pacific (APAC) region is expected to be the forerunner in IoT by 2023, accounting for 48% of global spending.

Ecosystm defines IoT as a sensor device or a “thing” that has enough hardware and software intelligence to allow for a two-way communication between the sensor and a management system. The technology evolved from radio-frequency ID (RFID) and machine-to-machine communication.

In Malaysia, customers in the asset management industry have begun using IoT to track fleet vehicles via a low-power wide area network (LPWAN) provided by Xperanti IoT, the Malaysian operator of Sigfox technology.

Xperanti IoT chief operating officer Vicks Kanagasingam says that one of its customers, a large logistics provider, faced the challenge of keeping track of where all its fleet vehicles were at any one time.

“Our client had to maximise the availability of its haulage assets, such as trailers and containers, so that they could be utilised efficiently, so as to avoid service disruption to its customers,” he says.

Using sensors that have a long battery life and communicate with the logistics provider via its Sigfox network, Xperanti was able to track day-to-day movement of its client’s assets and time spent on the road.

“Our customer is now able to observe its assets at the border in Singapore and Thailand and this has made a big impact to its delivery scheduling and planning,” says Kanagasingam. “It has seen a reduction of 80% in wait time before the cargo take-over happens.”

“With IoT, we can now automatically download the correct equipment parameters and monitor/control the equipment status”
Rhett Ramos, Allegro Microsystems

For US semiconductor manufacturer Allegro Microsystems, IoT use ensured that all its manufacturing equipment is interconnected, so information about the status of its machinery can be collated and monitored automatically.

Allegro, whose Asian plant is in Manila, Philippines, makes hall-effect sensors and power integrated circuits, all of which are used in automotive, consumer electronics and industrial appliance applications. 

“We were not connected to our equipment, so device-dependent equipment parameters had to be selected manually by the operators, potentially leading to misprocessed units if the parameters were incorrect,” says Rhett Ramos, IT director for Allegro Microsystems in Asia.

“At the same time, the equipment status, such as units produced, yield or equipment state, were all collected manually. With IoT, we can now automatically download the correct equipment parameters and monitor/control the equipment status.”

Ramos says Allegro has improved its equipment utilisation and capacity with IoT in place.

In Australia, Citic Pacific Mining, the country’s largest magnetite mining company, is also using IoT to track its assets, such as light vehicles, buses and service trucks. The move has resulted in a 200% return on investment within a few months, just on fuel rebates alone, says Ray Achemedei, general manager for information services at Citic Pacific.

But enterprises are not the only organisations deploying IoT – several mobile operators have also begun to offer the technology as a service to businesses.

For example, Thailand AIS began offering a service to monitor the temperature of perishable goods during transportation, while Singapore’s M1 claims to offer a litter bin management system to the National Environment Agency (NEA), according to the GSM Association.

Meanwhile, in Singapore, the Swissotel Group is working with Singtel to elevate the use of IoT beyond connectivity. Using Singtel’s IoT platform, the hotel chain claims to have been able to offer guests an advanced automated living experience, which includes digital room services and a visual management system, plus other smart building features.

Can your IoT give insights?

But despite the abovementioned use cases and survey figures that indicate interest by C-suite executives in its potential, IoT is still not considered mainstream technology in ASEAN, and there are several reasons for this.

The first is fragmentation, says Counterpoint’s Sinha. He believes that most current IoT systems have been developed using a vertical service model and, as such, interoperability among service domains is still a significant challenge.

To overcome this, IoT providers need to adopt a “horizontal service” domain mindset to achieve interoperability between participating “things”, says Sinha.

“Various standards and protocols have been proposed by several IoT consortiums to solve these issues,” he says. “However, inter-operation is not yet a reality between various devices in different networks, and it will take time.”

Agreeing with this view is Vernon Turner, executive analyst at Ecosystm, who notes that if there are 10 vertical markets across 15 countries, there could be many thinly sliced solutions that don’t scale well and cut across multiple markets.

“In IoT, one size doesn’t fit all,” he says. “Fixing such a situation is a slow, deliberate process of introducing standards for everyone to adopt. This takes care of creating repeatable solutions that can be transferred across industries.”

Read more about IoT in APAC

  • Asia-Pacific is slated to become the top market for the internet of things as the region scales up the use of connected devices in key sectors such as manufacturing.
  • From offering low-cost connectivity to hardware design and integration services, Singapore-based Unabiz is causing a stir in the IoT market.
  • Digital indoor systems, already being used at airports and subway systems, will help ASEAN telcos monetise new digital services on 5G networks.
  • The Australian government is pumping up to A$10m to help companies monitor and manage their operations through an internet of things (IoT) network focused on cutting energy use.

But for Diomedes Kastanis, head of IoT at Singtel, fragmentation is just the tip of the iceberg as far as IoT roadblocks are concerned.

Citing an IoT smart building application in which literally thousands of sensors could be connected to an IoT platform, Kastanis points out that fragmentation is only the first hurdle to overcome.

“The real challenge for IoT is to make sense of all the information that has been collected,” he says. “At the end of the day, you may have structured data, but you don’t have insights.”

Kastanis says it is pointless having visualisation tools that can display the data, but can’t help executives make decisions.

“You have a lot of data displayed, but can you answer if someone asks how efficient your building is or how secure is it, given a 20% rise in occupancy?” he says. “Customers want these questions answered and IoT is only useful if these questions are answered.”

Ecosystm’s Turner agrees, adding that typical IoT projects are driven by connecting devices and then creating business value by analysing the data. ASEAN countries’ top IoT challenge, therefore, is about being able to create end-to-end integrated solutions, he says.

Other challenges

Besides fragmentation, two other challenges that could stymie IoT adoption in ASEAN are technology integration and security, according to a poll conducted by Ecosystm in June 2019.

Turner notes that 61% of the survey respondents said technology integration was their top concern, followed by security and privacy concerns (57%). This is particularly true of emerging economies in ASEAN, where a high proportion of businesses are small and medium-sized enterprises (SMEs), he points out.

Mobile operator Celcom Axiata says many SMEs are disadvantaged because many of them are not aware of technologies such as IoT, which is part of a larger digital transformation agenda that they must embark on.

“This is why SMEs need government and service providers to help them create awareness in their journey and to obtain support in skills development, funding, regulatory frameworks and technology knowhow,” says Azlan Zainal Abidin, chief enterprise business officer at Celcom Axiata.

Beyond creating awareness, Abidin also believes that IoT operators should develop and customise specific solutions supported with platforms, the necessary tools, go-to-market strategies and customer care processes to help SMEs get on board.

“This is part of the reason why we have invested RM100 million (US$24.3m) into establishing an IoT centre of excellence in January,” he says. “We hope this will pave the way to establish best practices and help develop more homegrown solutions for SMEs.”

As for security and privacy concerns, Ecosystm’s Turner believes security has to be built into the IoT architecture at every layer – the IoT sensor/device, gateway servers, the cloud and the enterprise datacentre.

“Since IoT is so dependent on connectivity, network companies are investing heavily in making IoT sensors as secure as possible during any onboarding process,” he says. “By locking down the IoT sensor at its roots, customers can then take advantage of the inbuilt security of all of the existing layers in the network and infrastructure.”

Celcom’s Abidin adds: “IoT operators need to be holistic in approaching security. This includes having to ensure physical security, communication encryption firewalls, anti-malware, intrusion protection and device authentication.

“They also need to take responsibility in choosing and appointing reputable and reliable partners to work with, and be on top of identifying malicious and suspicious irregularities from various domains.”

Best practices

So what should companies consider when embarking on an IoT project? Allegro’s Ramos advises any organisation wanting to do so to create a multi-year strategy, especially if it has different equipment platforms and processes.

“It is important to sell this strategy to all stakeholders in the company, so that over time, the IoT project owner can gain sponsorship and funding for those involved,” he says. “Those who benefit first-hand from an IoT project will also be your key proponents.”

Xperanti’s Kanagasingam advises companies to take a step-by-step approach, because transformation begins by solving challenges with existing processes and people’s roles within the organisation.

“Address immediate pains and utilise IoT solutions that are scalable and sustainable for a long-term digital transformation journey,” he says.

Celcom’s Abidin adds: “Enterprises will also need to evaluate and appoint the most suitable and credible partner in ensuring that the adoption will meet their business objectives.

“Among key areas that they should be looking at are: reliability of the devices being deployed, data integrity, and how much control they will have to ensure the technology does not compromise the privacy, security and safety of users.”

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