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Data Analytics forges ahead fast

Container ship moored at commercial dockThe market for sensors is booming, the price of data storage is falling and M2M data volumes are on the increase. The Internet of Things is clearly forging ahead at full speed. But what happens to all the data that sensors collect and supply around the world? Big Data is still something many people find hard to grasp. In the Port of Hamburg Deutsche Telekom is demonstrating how much untapped potential IoT data already has.

On the Internet of Things (IoT) everything and everybody generate data. Cars relay geodata to help manage traffic flows, production facilities relay status reports and coordinate their optimal capacity utilization and physicians monitor patients around the clock by means of wearables. The resulting data volumes are enormous – and are increasing continuously. The strategy consultants at Machina Research forecast global annual growth of the flow of M2M information to around 3.2 exabytes until 2024 in the mobile networks alone. Compared with todays volume that is a 16-fold increase because today’s annual data throughput is still 0.2 exabytes.

Low-cost hardware makes IoT entry level less challenging

Figures provided by Germany’s AMA Association for Sensor and Measurement underscore the revolutionary nature of the changes that are under way. The Association represents the interests of 480 companies that are involved in sensor and measurement technology for all manner of uses. It regularly polls its members on economic development and its surveys have revealed that over the past decade sales of sensor and measurement technology in Germany have increased on average by 6.3 percent per annum.

What can be said for sure is that all industries – from mechanical and electrical engineering to medical technology – are increasing the intelligence of their products. They are able to do so more easily than ever. Sensors for the Internet of Things are available at ever lower prices. McKinsey management consultants provide the current figures for mobile communications market:

“Low-cost, low-power sensors are essential, and the price of MEMS (micro-electromechanical systems) sensors, which are used in smartphones, has dropped by 30 to 70 percent in the past five years.”

Developments in the market for storage solutions are also taking the Internet of Things forward. Storing information electronically has never been less expensive. Storing what the omnipresent sensors record is thus as easy as pie, and this data is no less inexpensive to relay via mobile networks. The cost of mobile data connections has in recent years developed positively for the customer.

Data is captured, but not used fully

McKinsey does, however, place a damper on expectations. The management consultants present a simple calculation. Today’s offshore drilling rig incorporates 30,000 sensors, but the operators use only one percent of all sensor data. According to McKinsey that is typical of the current situation: “Most of the IoT data collected today is not used at all, and data that is used is not fully exploited.”

This view is shared by German Big Data specialist ParStream. A study that it commissioned from Dimensional Research concludes that data is captured, but not used fully. Data capture and storage was found to play a role in the majority of IoT projects, whereas information gained is fully analyzed in very few cases:

“While the vast majority, 83%, are collecting data, only a very small number (8%) report that they are making the most of their data by fully capturing and analyzing data in a timely fashion.”

However, a little over a half of the respondents (58 percent) said they were coming to grips with analyzing IoT data, albeit somewhat hesitantly – and they know they can do better.

IoT data as the basis for new business models

So what is to be done? According to McKinsey the use of IoT data is currently limited to real-time machine control. Yet this data presents much greater opportunities that await exploitation. It can contribute to value creation and to the creation of new business models:

“The Internet of Things will enable, and in some cases force, new business models. For example, with the ability to monitor machines that are in use at customer sites, makers of industrial equipment can shift from selling capital goods to selling their products as services.”

This ‚as-a-service‘ approach could give the supplier a more intimate tie with customers that competitors would find difficult to disrupt, the McKinsey experts state. The sensors that are incorporated everywhere now open up new angles of entrepreneurial vision. They can do more than just monitor machines in a factory or container vessels on the high seas, such as identifying ways to optimize processes and procedures. IoT data can be used to extend the service life of production facilities by means of optimally coordinated maintenance. It can also be a valuable raw material for redesigning future generations of equipment, while Big Data Analytics opens up many other opportunities. Those who succeed in collecting and making use of enormous quantities of structured and unstructured data from different sources will advance into new dimensions of value creation.

A practical example in the Port of Hamburg: More cargo handled in the same amount of space

The Port of Hamburg provides an indication of what the intelligent connection and evaluation of IoT data can already accomplish. T-Systems and the Hamburg Port Authority (HPA) operate in the port the smartPORT logistics system. This solution enables truck and container movements to be better controlled at all times and at the same time facilitates more efficient use of the port’s limited space for additional traffic infrastructure. That reduces bottlenecks and waiting times and speeds up cargo transshipment.

The smartPORT logistics system merges all relevant traffic and infrastructure data in the 72 square kilometers of the port area and it does so in real-time. This data includes the position of trucks and relateded containers, terminal and depot information, construction sites, bridge opening times, and free parking spaces. In this way the Port management, forwarders and parking providers receive a comprehensive picture of the situation around the clock and can respond swiftly to infrastructural incidents, e.g. traffic congestion. As a result, traffic flows around the shipping berths can be predicted more accurately. If a bottleneck occurs, the Port Authority knows about it immediately and can take suitable counter-measures. These decisions are based on IoT data gleaned from different sources.

smartPORT logistics is a private cloud application based on the T-Systems Connected Car platform and on SAP’s Connected Logistics software. The application connects freight data and information from telematics systems of different providers with the Hamburg Port Authority’s traffic and infrastructure data. Furthermore, Telekom provides an Android app that serves as a telematics unit in trucks. Finally, the SAP Connected Logistics software connects all of this real-time data and makes it available to users on an online portal.

Analysis of IoT data pays dividends

Examples such as this from northern Germany will set a precedent. Here too, the findings of the Dimensional Research market researchers speak for themselves. Ninety-four percent of IoT stakeholders still feel that collecting and analyzing IoT constitutes a major challenge. At the same time, however, 86 percent of them assume that an improvement in this state of affairs will pay immediate dividends for the company. Michael Hummel, ParStream co-founder and CTO, notes in the company’s blog that “due to increased competitive pressures, organizations are forced to optimize processes and products – the key to identifying optimization opportunities and track improvements is in the IoT data.”

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Are SMBs missing out on the Internet of Things?

Infografik_DigitalisierungSmall and midrange businesses (SMBs) are considered to be the backbone of the European economy. They make up nearly 99 percent of business enterprises in the European Union, employ more than two thirds of employees, and account for more than half of the EU’s gross value added. Yet they have so far played only a minor role in digitalization.

Small and flexible with short decision-making routes, SMBs should be predestined to take digitalization forward. The reality, however, is different. In Germany, 61 percent of CEOs feel they are driven rather than drivers, according to the Digital Business Readiness study conducted by IT consultants Crisp Research. In many other European countries the situation is much the same.

The key drivers are, for one, increasingly individual customer needs and, for another, market constellation changes. So far, however, the pressure does not appear to have been strong enough – because at more than half of German SMBs a digitalization strategy exists, at best, on paper.

Digitalization promises competitive edge

Yet the digitalization of in-house corporate processes is seen as a crucial measure to ensure long-term competitiveness in the world market. Digitalize your business processes and you will enjoy clear competitive advantages today. So why wait? The Experton Group has looked into this question and found that for many companies going into digitalization is mainly a matter of resources and knowledge.

The self-assessment by SMBs that they lack sufficient financial resources is a prejudice that M2M and IoT providers regularly encounter in discussions with customers. Yet the fact is that falling sensor and module prices and low-cost mobile data connections have made solutions increasingly affordable in recent years. Costs are frequently geared solely to the number of devices connected. So SMBs can afford to test digitalization without high levels of investment and additional risks.

The challenge of growing complexity

Implementing and operating M2M solutions has also required a high level of specialized knowledge. The more M2M solutions find their way into daily business, the more complicated they are to administer. How is an SMB that in some cases may not even have an IT department of its own to ensure that its devices are configured uniformly and use the latest software? And how is it to connect measurements taken by different devices and to integrate them into its existing corporate IT? These questions have frequently gone unanswered.

Today, cloud-based M2M and IoT platforms provide a tried and tested solution to this dilemma. Their advantage is that they standardize the central functions of M2M applications and transfer them to application-independent development and administration platforms. Ready-made functions for all of the typical aspects of an M2M application make it among other things easier to take an inventory of devices, to evaluate data and to manage alarms. That makes it much easier for small and midrange enterprises to use M2M and IoT solutions extensively.

Economic advantages amount to trillions

The McKinsey Global Institute’s latest report, entitled The Internet of Things: Mapping the value beyond the hype, identifies in addition to these challenges IT security and data protection as action areas. They, however, require integrated solutions. If manufacturers and users collaborate closely on them it can be worthwhile. The McKinsey consultants expect the global economic benefits of the Internet of Things to total up to $11.1 trillion a year from 2025.

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What happens when all the things become part of mobile networks?

Christian WietfeldBy 2024, wireless networks are forecast to handle 2.3 billion M2M connections a year, generating 3.2 exabytes of data traffic. Are our current mobile networks prepared for this onslaught? All about M2M discussed this with Prof. Dr.-Ing. Christian Wietfeld, head of the Communications Networks Department at the TU Dortmund University.


Professor Wietfeld, which is the greater challenge for mobile networks at present: the constant increase in data volumes or the rising number of connected devices?

They go hand in hand. In recent years the mobile networks have coped very well with the increase in data volumes. The challenge now is more that of improving the quality and thereby ensuring that critical services function reliably.

What does that mean specifically?

In today’s networks data-intensive and time-critical applications are competing with each other. From the viewpoint of the operators of critical infrastructures data-intensive applications such as video streaming are less important than time-critical applications like those that are used to control system-critical plant and machinery in, for example, power technology or transportation systems. A quality of service differentiation within the networks can ensure that system-critical applications enjoy preferential treatment. That doesn’t exist yet in wireless networks even though it would be technically feasible. In years to come, however, mobile wireless networks are sure to need to differentiate more between applications.

What might a differentiation of this kind be like?

There are different approaches. The network components might, for example, decide by means of a set of rules how to handle certain data packages and services. In this connection network virtualization by means of technologies such as Software Defined Networking (SDN) plays an important role. In this way network operators can configure the rulebook for network components centrally. While SDN is already widespread in the fixed-line network, in mobile networks the technology is still in a transitional phase between research and implementation. We will shortly be launching a project in which we will be looking into how SDN concepts can support safety-critical applications in mobile network traffic.

An alternative to differentiating between quality classes is, however, to reserve frequencies for critical services. That is currently under discussion in Europe for networking energy networks. If the politicians reach an agreement, parts of the frequency range might in the future be reserved for these applications.

Does this approach not exist already in the railroad network?

Exactly. The International Union of Railways (UIC) created a specific form of GSM system when it adopted GSM-R (short for GSM-Railway). Today it would have to be done on the basis of LTE to ensure that cyber-physical systems, meaning all systems that serve long-distance traffic communication with a critical character, function smoothly.

That also applies, for example, to similarly system-critical applications such as connected driving. Frequencies in the 5.9-GHz range have already been reserved for vehicle-to-vehicle communication. They are less suitable for classical mobile wireless communication, however. The lower frequencies that have been used until now by classical mobile networks are much more interesting. Parts of the LTE network could be operated in a reserved area there.

What benefits does extending LTE for connected applications offer?

Quite a few. An especially exciting aspect for time-critical applications is, along with higher data rates, the reduction in latencies. LTE, for example, has developed into an alternative to vehicle-to-vehicle communication because it can deliver response times of less than 100 milliseconds. GPRS, by comparison, took one or two seconds to respond. So today’s networks are so good that developers can now implement via the mobile network applications they would previously have connected via a direct communication channel.

The rising data volume of the growing number of connected devices remains a challenge even with QoS and LTE expansion, however. Are there any other approaches?

There are. I wouldn’t exactly recommend sending raw data via the net, for instance. If the application permits, the terminal devices should choose before transmission which data really needs to be transmitted and which does not.

In one project, for example, we are dealing with information from the CAN bus – a vehicle’s communication system. This system alone generates around 12 gigabytes of data per day. If this amount of data for every vehicle were to pass through the mobile network unfiltered the volume of data to be transmitted would naturally increase significantly. We aim by means of our research to make the process more efficient. That is why the data must be analyzed before transmission to choose which data is of relevance for the application.

Developers must, however, decide from case to case whether it makes sense to analyze the data locally or on the net. If the mobile network connection is very good it can make sense to transmit the raw data in its entirety and then to analyze it via a cloud platform. If, in contrast, the mobile network connection is poor a local analysis is better to ensure that at least the relevant data is transmitted.

How does the connected device know whether it is connected to a good network or a bad one?

That is an exciting question. With special applications differences of quality between networks – between two countries, for example – can lead to problems. Let us assume that an autonomous vehicle enters a network where the quality is inadequate. That could jeopardize the safety of both the vehicle and the people in it. That is why we in research are working on methods by which a terminal device can check whether the network provides sufficient quality. If it were not to do so, an autonomous vehicle would simply stand still. There are two approaches here. In Active Probing the terminal device sends small test probes to find out whether the network quality is sufficient to meet the application’s requirements. In Passive Probing, in contrast, the terminal device analyzes the network quality by means of performance parameters that it can read from the network.

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GMA bursts boundaries on the Internet of Things

Developing M2M solutions works best when they leave neither the provider’s network nor its country during application. If they need to leave either or if the solution ought to be easily deployed for the world market, that’s when it gets more complicated for M2M and IoT solution providers as well as original equipment manufacturers (OEMs). The Global M2M Association aims to change that with a new offering.

Buying a car these days is about more than horsepower or miles per gallon. Cars are increasingly developing into mobile infotainment centers. In addition more and more carmakers are collecting vehicle data in order to offer improved service models to their customers. Both infotainment and vehicle data are transmitted via integrated M2M modules.

But how do you ensure that streaming of video or audio content via 4G-connectivity is technically working and commercially viable? With the classical M2M roaming approach, mainly developed for small amounts of diagnostic data in a B2B business model, this is hardly feasible. One network operator alone can hardly provide a solution to these customer requirements.  Fitting out every car with different SIM cards would be too expensive and complex for a car manufacturer. But using only one SIM card raises another problem: Carmakers need to ensure that a car for the Spanish market gets a Spanish SIM card as well. Up to now, this was a complex, time consuming and expensive challenge for them. That is why network providers have joined forces to enhance global M2M services.

Net coverage in 33 countries

Six leading international network operators – Deutsche Telekom, Orange, TeliaSonera, Telecom Italia Mobile, Bell Canada, and Softbank – cooperate in the Global M2M Association (GMA), for example. Between them they cover 33 countries in Europe (coverage of GMA in that very fragmented market is about 97%), the Americas, and Asia.

In spite of existing roaming agreements, implementing and managing international M2M and IoT solutions has so far proven rather difficult. Identifying the cause of faults and rectifying them, for example, is expensive and time-consuming. A service unveiled by the GMA at the Mobile World Congress 2015 is designed to remedy this state of affairs. The nucleus of the new offering is the integration of the Multi-Domestic Service platform provided by Ericsson and a eSIM subscription management solution by Gemalto. M2M and IoT solution providers as well as OEMs can thereby customize their products easily to suit the world market’s needs.

One platform for all network operators

The platform serves as the interface between the local GMA network operators on one hand and M2M and IoT solution providers as well as OEMs on the other hand:

As with most network providers’ platforms, solution providers can, for instance, manage on the platform the SIM cards that they use or run their fault management processes on it. On the MDS platform provided by Ericsson, however, companies can use these functions across countries and networks. In fragmented markets such as Europe, where there are both different network operators and many different technologies in use, the platform helps lower the barriers to the development of international solutions. TeliaSonera, Orange, and Bell Canada have already launched it. The other GMA members will follow suit step by step.

SIM card adjusts its life cycle

Along with the Multi-Domestic Service offering the GMA partners are adopting GSMA-compliant embedded SIM cards (eUICC) and a Gemalto subscription management platform. The advantage is that the eUICC supports remote profile management. Carmakers can easily adopt and automatize the life cycle of the SIM Card to that of the networked product – from production via deployment by the driver to decommissioning of the vehicle. The new offering also enables customers to localize SIM cards and transfer them virtually to a GMA partner’s local network.

That also makes new billing models possible. Instead of roaming the GMA can provide SIM cards with a local business profile for use within network operators’ own footprints. This makes the solution more favorable than roaming. Companies can in this way develop location-independent M2M solutions for the global market compliant with local laws and regulations and that that users can nearly utilize on the basis of local conditions.

The benefits of the new GMA solutions are likely to be of interest mainly for the automobile industry. With eCall (Emergency Call) integration soon to become mandatory for cars that are built in the EU, carmakers have a window of opportunity in which to implement additional applications, and with the GMA’s Multi-Domestic Service offering they are well equipped to do so. So in the near future cars with  rearseat-entertainment systems that keep the children quiet during the ride will no longer be with high priced limousines but affordable in every car.

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M2M Forum CEE on June 9 in Vienna showed what the ‘Internet of Things’ can do

When a stolen bicycle reveals its location. When a fabric bag takes delivery of a parcel even if the recipient is not at home. That is when M2M is involved. Automated communication between devices makes many innovations possible and changes work and daily life, the economy and society.


All the areas where M2M and the Internet of Things (IoT) are deployed, which technical innovations lie ahead and which trends are taking shape was the subject of this year’s M2M Forum CEE. On June 9, 45 speakers from 12 countries said what they had to say about M2M at the Tech Gate Vienna. Around 250 people from 40 countries attended the Forum to learn about the latest trends in M2M and to find out how they can best make use of the Internet of Things.

The 5 Subject Blocks at the M2M Forum

  • Smart City: The cities of the future are to be greener, more socially integrated and more advanced. IoT and M2M solutions have an important contribution to make toward achieving this objective.
  • Industrie 4.0: In manufacturing M2M and IoT enable resources to be deployed more efficiently, production to be made more flexibly, and even customers and business partners to be integrated into the manufacturing process.
  • Connected Future: All “things” can be connected, be it a smart watch, a toothbrush, a car or an airplane. Speeches and discussions on this issue made it clear what challenges the economy faces and what opportunities this development offers.
  • Transport & Logistics: M2M solutions enable logistics service providers to ship goods faster and more safely, and machine-to-machine communication provides any number of opportunities to offer the customer additional services.
  • Future Banking: Money is a very special good – and M2M and IoT are very special technologies. Mixing the two provides the financial services sector with ample scope for innovation.

T-Mobile Austria was one of the Forum’s lead partners. The mobile network operator supported the platform in order to take M2M forward. Together with its parent company Deutsche Telekom, T-Mobile Austria and its partners provide M2M and IoT solutions for many industries and market segments.

Taking IoT and M2M further forward

Just like the partnership with the M2M Forum CEE, the Business Wall of Fame is for T-Mobile Austria a key tool with which to take M2M further forward in Austria. A competition held in eight countries, the Business Wall of Fame shows how varied the uses of M2M and IoT are. You can choose your favorite until June 22.
Nearly every enterprise, regardless of size, can benefit from M2M and IoT. For one, costs can be saved; for another, new products or even entirely new lines of business can be developed.

Solution business corners the largest slice of the cake

The CEOs in the platform debate were all well aware that a larger slice of the IoT cake can be earned with services and integrated solutions. Dr. Alexander Lautz, Senior Vice President, Deutsche Telekom, said: “Connectivity business is not so bad. Today it is the telcos’ main source of revenue and that will continue to be the case for some time to come.”

Logistics industry is one of the drivers of M2M and IoT

Which industries and areas of the economy are important for companies’ current IoT business evidently differs from country to country and depends on their economic structure, Dr. Lautz confirmed. In Germany, he said, the automotive sector and thus connected cars plays a central role. For Deutsche Telekom’s IoT and M2M business logistics, B2B solutions and manufacturing were currently the most important areas. In Hungary Tibor Rékasi, CEO T-Systems Hungary, anticipates stimuli from Smart City business.

‘Partnering’ in demand

Nevertheless, telcos themselves were not able to offer all-inclusive Internet of Things solutions for all the different industries. In the solutions business in particular, cooperation with other firms was indispensable as they had the necessary industry knowhow. Cooperation should not be a major obstacle for telcos, however. “Partnering,” Dr. Lautz said, “is embedded in Deutsche Telekom’s DNA and has been since roaming began.”

View the picture gallery of the event here.

This post originally appeared at the T-Mobile Austria Business Blog in German language.

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