Internet of Things – An Indian Perspective

By Ajith Sankaran

 

IoT is moving from hype to reality, even though consumer use cases are limited

Internet of Things (IoT) is one of the most talked about technology trends today. There is a broad consensus among technology vendors, analysts and other stakeholders that IoT would have a significant impact on the technology landscape and society in the coming years. According to technology research firm Gartner, IoT devices installed base (excluding PCs, tablets and smartphones), will grow to 26 billion units in 2020, up from just 0.9 billion in 2009.

However, there are some voices that warn that IoT is today overhyped, and that it will take a few more years for the real use cases and benefits of IoT to become visible. Some of this scepticism is driven by the fact that we are yet to see real applications of IoT at and end consumer level. Use cases such as “refrigerators that order milk from the super market once the levels come down” - are still restricted to prototypes and academic discussions. Apart from a few fitness related wearable devices, automobile telematics (which in many ways is less “visible” to consumers), and “smart home” systems, we are yet to see other major consumer IoT adoption stories.

Image used for representation purpose only. Agencies

Image used for representation purpose only. Agencies

IoT in India

Last year, Government of India announced that it has plans to create a $15 billion internet of things market in the country by next five years. This did create some spike in the interest around IoT. However, IoT is yet to create any major buzz in India. Even the mainstream media has not started talking about IoT in any major way, and the vendor activity has also been subdued to a large extent.

[Government of India’s IoT Announcement: Department of Electronics and Information Technology, has come out with a draft IOT Policy document which focuses on following objectives:

  1. To create an IoT industry in India of USD 15 billion by 2020. It has been assumed that India would have a share of 5-6% of global IoT industry.
  2. To undertake capacity development (Human & Technology) for IoT specific skill-sets for domestic and international markets.
  3. To undertake Research & development for all the assisting technologies.
  4. To develop IoT products specific to Indian needs in all possible domains.

Source: http://deity.gov.in/content/internet-things]

Consumer IoT adoption would be slow in India

Due to various challenges, consumer IoT adoption would be slow in India. Some of these IoT adoptions challenges (data security, lack of standardisation, data ownership issues, ROI, etc.) are really not unique to India. Apart from these challenges, IoT in India, especially in the consumer space, would need to reckon with a few other hurdles. These are:

Internet availability / bandwidth / reliability: Even today Internet connectivity is a major challenge in India. For consumer IoT adoption – this would remain a major challenge.

Cost of IoT enabled systems and devices: Even products such as wearable fitness bands are yet to take off in India, and price is a key reason. Indian consumers are very selective in terms of where they would invest when it comes to technology.

Lack of vendor activity: Global vendors, often mistakenly, assume that Indian consumers are “not ready” for advanced products. This is very much evident in the IoT space, with hardly any kind of vendor activity today. This in turn has led to low awareness levels of IoT devices and systems among consumers.

Overall infrastructure challenges: Apart from internet the supporting infrastructure such as smart grids, traffic systems, etc., are far from being ready for IoT.

Commercial IoT has much better prospects in India

The challenges listed above for consumer IoT adoption becomes less of an issue when it comes to commercial space. It is not that these challenges (especially internet connectivity, and cost of IoT) are not there in the commercial space; they can just be more easily addressable by commercial organizations. Even globally, IoT adoption and usage is much higher in the commercial space.

Some of the areas where commercial IoT adoption can grow in India are:

Logistics, fleet telematics: Logistics as a sector is expected to grow rapidly in the coming years in India. Regulatory changes such as GST implementation would drive consolidation and growth. The booming ecommerce sector is another key driver for the logistics industry. With growth and consolidation, logistics companies would be looking to better leverage technology to drive efficiency in operations and this where IoT could play a key role. Tata Motors as begun putting sensors into its trucks, so that fleet owners can get information on how the vehicles are used, and even predict potential breakdowns. Vendor community also see to be interested in the IoT opportunities in the logistics space. Cisco and L&T Technologies, announced a tie-up in September 2014, to explore IoT opportunities in transportation and other infrastructure sectors.

Smart cities and utility services: With the new government coming out with an IoT policy, and the stated plans of developing smart cities, there is significant scope for growth of IoT in multiple government and utility services. There are signs of some vendor activity also. Late last year, Tech Mahindra announced a tie-up with Bosch Software Innovations, to develop an ecosystem to enable innovative solutions for the connected world and connected enterprises.

Industrial automation / supply chain / inventory management: Indian manufacturing sector has seen a significant growth in IT adoption. IoT applications for the manufacturing sector whether it is automation or supply chain management would be a key growth areas in India.

Other areas of possible growth include insurance sector, where some of the insurance companies in India have started experimenting with IoT, primarily in the automobile insurance space; and the healthcare sector which is growing very rapidly and modernizing fast.

IoT will continue to evolve in the coming months and one can expect significant growth in the long run. However, reliable internet connectivity and overall supporting infrastructure will be a key prerequisite for this growth. If things fall into place, IoT has the potential to provide substantial benefits.

 

The author is senior vice president at Blueocean Market Intelligence.

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Updated Date: Jan 21, 2015 14:52:54 IST

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