Intel: Forget internet-connected fridges, the Internet of Things is all about business transformation

The Internet of Things will takeoff in business, not in the consumer sector, as organisations use it to improve service and lower costs, says Intel's Ton Steenman

The so-called Internet of Things - the vision whereby virtually every electronic device is connected to the internet - is not about internet-connected refrigerators or remote-controlled heating systems, but about driving down costs for businesses, and improving their efficiency.

That is the message of Ton Steenman, vice president of the Internet of Things Group at Intel, and also general manager of Intel's Internet of Things Strategy and Technology Office.

"The Internet of Things will have so much more impact on the industrial and commercial side by making companies run more productively, particularly companies that deal with physical infrastructure.

"We have done a tremendous amount of work in our own factories. Because we accumulate a lot of data out of our machines [at Intel] we are much better at forward prediction of utilisation of equipment. It improves our production flow and we can drive yield improvements out of that," he says.

The Internet of Things as a market, he says, is largely a means to an end rather than an end in itself: "Like connecting devices and getting the data to flow, managing devices, making sure it's all secure. It's all incredibly necessary but the goal is to drive business transformation.

"We see business transformation in a couple of different domains. The first is in operational efficiency where companies can very easily calculate a return on investment, making it a rational decision for a company to take," says Steenman.

One of the main areas is a potential shift from preventative maintenance to predictive maintenance.

For example, instead of having a gas boiler serviced annually, it can be connected to the servicing company. Data can be taken from the components and transmitted directly to the servicing company to automatically flag-up emerging faults that can be addressed before the boiler breaks down.

Air conditioning manufacturer Daikin is already taking this route with its products. "In the past, Daikin's systems were unconnected. It would send its maintenance people round regularly. Intel has helped it to connect all these units so that they can monitor the health of the machines," says Steenman.

Furthermore, when an emerging problem has been identified, the company also knows what parts its engineers will require - no more making two trips to fix a faulty air conditioning unit, and no long waits for parts to be sent from Japan or China for customers.

"They can save a tremendous amount of money from an operational perspective and, as a result, there's a second order effect: it increases the uptime of the machines. They not only get the maintenance benefit, they also get an uptime benefit and better customer service," says Steenman.

"After they got the units connected and were taking data feeds, they could start monitoring energy consumption and index that against the comfort level of people within the buildings. As a result, they built an energy monitoring service for their customers, which is a whole new revenue stream for Daikin that in the past couldn't be done," he adds.

That is just one example. Multiplied across the whole economy, particularly the industrial and manufacturing economy, and it will generate huge gains in efficiency, he believes.

"On the manufacturing side, we see big opportunities. On the infrastructure side, it's things like smart grids, managing energy better, like water supply, transportation infrastructure and making transport flow better through cities and being able, for example, to direct people to their parking places if they are available," he says.

What is required to make it happen, though, are standards and platforms, which is why Intel bought Wind River Systems, a well-established developer of embedded systems and development tools.

"We recently announced a gateway product, that is an implementation of Intel hardware, a Wind River operating system, and a combination of McAfee and Wind River security. McAfee is deployed at the endpoint in the network and also in the cloud. And then for threat management, there's a number of tools that we offer end-to-end," he says.