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Enterprise may drive Internet of Things boom

The Internet of Things (IoT) has reached a critical stage in its evolution where it seems to be caught between two tipping points, waiting for the final explosion after the arrival of joined up applications connecting different domains. The first tipping point came around 2014 with proven single domain applications and the arrival of big players in retail such as Staples, energy utility like British Gas and ADT in premises security. That was also the year Google acquired smart thermostat leader Nest. The big data centre systems companies also piled in but more on the enterprise side, such as IBM with a $3 billion investment early in 2015 in its Watson IoT centre based in Munich.

Since then though the sheen has come off IoT a little with mixed signals from the leading players. Google in particular has struggled rather as it did initially with Android TV, with Nest failing to bring out promised new products and recently calling time on its smart home hub for wireless control of end devices called Revolv, which was launched amid much fanfare in October 2014 but then withdrawn in May 2015. It now looks like Google is pursuing a more distributed approach promoting direct interoperability among its own Nest devices without any intermediate hub, but that is not yet completely clear.

Another big US technology company Intel has also found the IoT sector harder going than it expected with its IoT Group reporting reduced revenue growth and a 25% year on year slump in operating income down to $132 million for 2015. The common theme here is failure of the IoT to break out of its silos so that both companies were left connecting their own things.

British Gas has fared better largely because as an energy utility it started with the expectation that it would be confined to its own domain for a while before branching out into other smart home sectors such as security and environmental control. The company instead is focusing on developing the analytics tools it believes will enable wider success in a future joined up IoT and has been investing in real time processing of the large data sets generated by its Hive connected thermostat. Hive allows users to control their boilers and central heating systems remotely by phone, which generates 30,000 messages a second amounting to 40 TB of static data so far, distributed across 30 nodes. Like Google, British Gas has created a dedicated IoT subsidiary called Connected Home, which has built an open source software stack running on the Apache Cassandra distributed database to process data both in real time and offline.

British Gas then is preparing for IoT’s second tipping point, which will come with joined up services that exploit synergy between different domains. IBM shares this conviction from its enterprise-focused perspective, drawing heavily on its cognitive computing work at its Thomas J. Watson Research Centre in New York, with one line being analysis of data from multiple remote sensors for predictive diagnostics. IBM is already enabling Pratt & Whitney to monitor 4,000 commercial engines and obtain early warning of faults that cause costly service outages if left unfixed until later, even if they are not safety critical.

Telcos are of course also intent on capitalizing on the IoT from their position as broadband providers to homes. One early mover is Paris based SoftAtHome, in which three major Telcos are investors, Orange of France, Swisscom and Etisalat based in the United Arab Emirates. The software developer has extended its home operating platform with CloudAtHome to enable centralized control of devices with potential for integration between domains. All such initiatives must support all the key wireless protocols such as Wi-Fi, Bluetooth and Zigbee that IoT devices such as thermostats use to communicate. SoftAtHome uses a hybrid model combining some form of home hub and data repository with cloud-based processes. Such a hybrid approach aims to deliver the required flexibility, security (and privacy), performance and functional breadth. Flexibility comes from being able to deploy processes in the cloud or at home as appropriate, while keeping sensitive data within the local repository will ensure security and privacy. Performance may require some processes to be performed locally to keep latency down while some features may need cloud components.

A close look at this cloud/home distribution shows that in some cases the cloud should be partitioned between remote processes that may be executed in a distant data centre (what is usually called the cloud) and intermediate ones that might be best run at the network edge. This is known as Fog Computing, where some storage and processing takes place more locally perhaps in a DSLAM or even a street cabinet. The argument is that as IoT takes off, a lot of the initial data collection and analytics will be best performed at a Fog level before in some cases being fed back to the cloud after aggregation.

Fog could also work well for enterprise IoT where it might serve as a campus level control and aggregation layer within a larger cloud based infrastructure. It could also play a role as enterprise IoT becomes customer facing rather than mainly concerned with internal or supply chain operations. This could be a third IoT tipping point bringing together enterprise and consumer IT if a recent survey from Gartner is to be believed. This found that while only 18 percent of today’s enterprise IoT deployments are focused on customer experience, this will jump to 34 per cent over the year to Q1 2017. This represents a threefold absolute jump given that Gartner is forecasting the number of enterprises with IoT deployed somewhere to soar from 29 percent now to 43 per cent in a year’s time. Gartner also expects IoT to expand into new service related industry segments such as insurance beyond the heavier industries like manufacturing, utilities and logistics where it is concentrated now.

Such enterprise IoT forecasts have a history of becoming more accurate than some of the over hyped consumer analyst predictions. This means that if consumer IoT does continue to stall it may be dragged forward by enterprises seeking competitive advantage as well as new revenues, as we are seeing to an extent with the likes of British Gas.

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First 4 trends spotted at IBC14

I didn’t write any prediction on what would be important this year, but while it’s still fresh here are my first impressions

Last year the Cloud was a key buzzword and Amazon was, this year, it’s replaced by Virtualization, basically the same technology, but with the possibility of running all those virtual machines in a service provider's own data center. It is supposed to lower costs eventually and make things like redundancy management easier, but I’ve yet to be convinced if it’s really such a big deal. I’ll try and stop by some of the encoding booths like Envivio, Harmonic or Elemental to check out where it’s really just a generalization of the concept of software based encoding vs. hardware based encoding.  I'll also try to get back to the Amazon Web Services stand in hall 3 where they're explaining how Netflix uses AWS with special tools developed to optimize service availability.

4k has of course been around for several years yet still manages to buzz. I’ve been told to go see Samsung’s giant curved display in hall 1. The main difference from last year is that there’s hardly a booth without a 4K display or two, most now at 60fps and more and more UI’s, like that on display at SoftAtHome’s booth, are now native 4K.

OTT is still very present even if it too has lost its novelty as so many commercial deployments are out there. OTT ecosystem vendors are repositioning frantically as value is eroded. Some like Piksel seem to be keeping their end-to-end positioning, while others like Siemens with its Swipe service are also bringing out specific components to sell as services. Enhanced ABR is also appearing, to help reduce Opex costs, by finding tricks to use only as much bandwidth as is required. All in the CDN crowd like for example Limelight, Anevia, Broadpeak or Media Melon (who don’t have a booth) have things to show in this area.

IoT and the connected and/or smart homes have been around for years in other shows, but have now just made it to IBC. Managing the home network is becoming more challenging for many reasons. One that struck me more is that we are seeing a greater proportion of homes with 100M+ broadband connections, but in-home effective throughputs down to just a few megabits, often not enough to stream over Wi-Fi. There were quite a few solutions at IBC, like AirTies' home Wi-Fi meshing.

Some trends though are clearly on the way out. I noted for example that it’s already out of fashion to talk about embedded apps now that HTML5 is a no-brainer and any mention of the smart SmarTV is positively 2013.

More soon, stay tuned...

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9 new trends to help my visit the TV Connect 2013 show floor

Many of us whinged and whined about the name change from IPTV World Forum to IP&TV World Forum because the names were too difficult to tell apart (if you are still looking, it was the adding of the ‘&’ in IP&TV). By naming the event TV Connect the organizers have now moved away far enough for the new name to stick. Now though it must be differentiated from the “Connected TV” events.

This year’s event is too big to just simply attend. I put on my thinking hat to ponder where things are going over the next three years, in order to decide who and what to see in Olympia. The trends below are new impressions of things I’m just beginning to understand, not the obvious ones like drowning in content.

For each trend I’ve suggested, in this blue font, which exhibitor I’ll be looking to see at the show. Please add a comment if you think I’ve missed something important, which of course I have.

Trend 1: Moore’s law looks like slowing down at last

My 2-year old gaming PC still plays all the latest games! Who’d have imagined, Apple still selling iPhone 4’s from its website three years after initial release?

At the same time, if the advantages of Broadband up to a “good DSL” speed  (i.e. from ~10MBPS) seems obvious, many operators are struggling to sell “fibre” speeds (from ~100MPS and above) unless there’s no price increase.

Raw processing power is no longer enough in the TMT sector to reach the mass market beyond geeks & early-adopters, and soon raw bandwidth won’t be enough either. Services must serve a deeper purpose. Ok, how can that be done?

At TV Connect I'll be looking how the numerous device makers (just for the letter A there are already: Amino, Airties, ABox42, …) have improved the packaging and User eXperience of their products without necessarily changing all that much under the hood since last year.

Trend 2: Analytics everywhere

Big Data is a trendy topic currently at the height of its Hype cycle, which also represents a genuinely new approach. After over a decade of promises, the ability to ingest richer data and process it near to real time is finally here. At last, operators can focus on user experience rather than just connectivity.

I’ll try to scratch under the surface of the “Big Data” words I expect to see plaster onto many booths.

Trend 3: Colliding segments of QoE, UX and Security

The User eXperience (UX) domaine has only naturally linked with Quality of Experience/Service and monitoring. So I’ll be looking for how the QoS/QoE/Monitoring vendors are embracing overall User eXperience. I’ve written earlier about security companies as potential candidates for a stake in this new game, as they know exactly what is being watched by whom when it comes to premium content. In the age of abundance we have entered, a key challenge is content navigation that also means UI design, search and recommendation.

I suppose VO and Nagra come to mind first as having merged much of this, but I'll also be checking in no particular order: Witbe, Veveo, Verimatrix, Conax, Red Bee, Mariner, Jinni, Ineoquest, Genius Digital, Agama,  …

Trend 4: CDNs going local and the Cloud coming to a TV near you

Other areas where there seems to still be some low-hanging fruit to improve User eXperience include the distribution of heavy (HD) content in networks. All operators with a fixed line network are racing to bring out their own CDNs.

Broadpeak seems to be the only CDN specialist

Some Cloud services like Dropbox or Network PVRs seem obvious. The jury is still out on others as the early disappointment of Connected TV has shown. OTT service delivery platforms (SDPs) will be another thing to look out for.

In the fog we’re all stumbling around in, I’ll try to see which of the one-stop-shops like Kit Digital, Siemens, Cisco, Ericsson or Nagra have the more powerful fog lights. Of course for a best-of-breed approach you’ll need to stop by at almost all the booths.

Trend 5: declining long-term value of Pay TV?

In the early 90s nothing worked better in the home than the fixed-line telephone. The availability and reliability of basic telephone services, whether mobile or fixed has significantly dropped twenty years later. Subscribers have been happy to trade lower prices and mobility for reliability and what we used to call quality. A similar trend can be seen with pay TV services. Early “cord-cutters” are showing that trade-offs are possible here too. Subscribers will probably trade old-fashioned TV quality for better variety, lower prices and better content navigation.

To keep the value in TV, some operators will use bundling or mashing-up TV types of service with social media and communication services.

The companies I’d talk to, to get a handle on this would be those at the forefront of social media like Accedo, or already close to operator’s triple play like SoftAtHome.

Trend 6: device wars growing fiercer

In what my friend Sebastian Becker calls a new rendition of “The Empire Strikes Back”, many European Cablecos have launched powerful boxes that have little to envy from a PC’s spec sheet, as for example with Numericable's LaBox. At the same time, Google is still happily ploughing millions into various device-centric Google TV projects, and Sony says the PS4 will revolutionize media in the living room. Nobody understands what Microsoft is saying: new OTT devices still crop up in shops ranging from powerful all-in-one boxes to tiny USB or HDMI sticks, … and the list goes on.

So short term, should I need to advise any operators on device architecture, I’ll go for being agnostic.

To get some clarity on this I’d drop in to the OIPF booth to see how standards are helping.

Trend 7: SD à HD à 4K

I saw Sony’s 4K screen at IBC and am a true geek on this one. The 4K industry drive will succeed because it just feels so right in the gut, where 3D with spectacles in the living room never could. 4K or ultra-HD will start to impact on us within three years.

I’ll be keen to see who at the show is already on the ball with 4K, although it’ll be harder to get the timing right on this than just be the fist too early mover.

Trend 8: Capex can really shrink at last

I have written over a dozen business cases for TV rollouts around the world and if you’re small, the killer Capex item is the head-end but if you’re large, it’s the STB.

For the former, new centralized digital “headend in the SKY” services substantial Capex savings. You just send files to be encoded streamed or whatever your head-end requirements are.

As for the larger operators, the STB can still be a killer cost as are fancy devices like the LGI Horizon box. People are actually happy though to spend hundreds of dollars on devices that are even more powerful than any STB. Once the empire has finished striking back, I sense a trend for overall lowering of STB costs.

I’ll drop by the usual suspects here for an update on head ends (Elemental, Envivio, Harmonic, Ateme, etc.) but also try to understand where Avail TVN is at.

Trend 9: Hello TV, Goodbye TV

If the 8 previous trends have a dose of gut feeling, this one - pure conjecture - feels right. I have come to realize that many of us work in the market sector we call TMT. Before I looked it up, I assumed that one of the T’s was for TV. Maybe I’m spending Too Much Time on this, but the acronym actually stands for Technology, Media and Telecoms, no TV anywhere.

So could TV have been just a passing thing? Before IPTV there wasn’t any TV on IP networks, and now in the age of multiscreen galore and OTT, is “TV” already being pushed back out of IP networks in favour of just “video”? Maybe one day there’ll just be Sports, News and Video left so beyond the three year time-frame of this blog we can all come back to the 2017 event which will be rebranded the SNV World Forum.

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Continuing broadband boom heralds arrival of the home gateway at last

The home gateway has been talked about for long enough, but how many have actually been installed so far? Not a lot, and meanwhile its future appears to have been imperilled by the spectre of cloud services offering a safe and cheap place of unlimited capacity to store all that music and all those home videos, as well as providing the source of on demand pay TV content. But this negative equation between the gateway and the cloud is a false one, for actually the two are going to march forward together. The cloud may well be the place where personal and recorded content is stored, but the gateway will be the point of control, mediating between the external network based services and the increasingly diverse functions executed within the digital home.

This point has not been lost on the more astute vendors of both hardware and software for home gateways, as can be seen from a clutch of recent product announcements. One that stands out for me came from Arris with the introduction of its Touchstone family of wireless voice and data gateways. Arris deals in CPE and infrastructure for the cable TV industry, although now prefers to set out its stall as a broadband services company. Touchstone therefore is for cable operators only, but for the first time Arris is making as much play about the features on the home network side as on the HFC (Hybrid Fibre Coax) front. Arris describes it as a game changer, presumably both for itself and its cable TV customers. Such rhetoric can often be dismissed as marketing puff, but on this occasion it is about right. Whether the Touchstone family itself proves to be the game changer remains to be seen, but the shift in emphasis that it represents on the CPE front most certainly is. It is no coincidence that some of Arris’ largest customers such as Comcast of the US, the world’s number one cable TV operator with over 20 million subscribers, have been clamouring for this product and plan to start deploying it before the year is out.

 

On the HFC side, Arris is touting its channel bonding, which increases available bandwidth by aggregating up to 24 channels together. It was notable the strong emphasis Arris is placing on upstream bandwidth to meet increasing demand, generated partly by cloud services, for uploading content rather than just consuming it within the home. On the home networking side, Arris was trumpeting its inclusion of Celeno’s CLR260 3x3:3 chipset, which is pretty much state of the science for home Wi-Fi technology with various enhancements to the standard MIMO technology, including transmit beam forming, which involves coordination of multiple transmission antennae such that radio waves from each interfere constructively at the receiving end to boost the overall signal and hence increase both range and bit rate. Other important add ons aimed more at dealing with interference both from physical objects and radio signals are Tunneled Direct Link Setup, designed to focus available bandwidth on the actual point to point links in operation at the time, and real time channel hopping, aiming to find the best part of the spectrum at a given moment for transmission.

 

The underlying message behind developments such as the Arris gateway is the continuing proliferation of broadband services, as confirmed by the latest data from the Broadband Forum indicating that global broadband subscriptions have soared to over 624 million by the end of Q2 2012 compare with about 565 million a year earlier. The Forum itself argues that this presents a huge opportunity for broadband operators to exploit the connected home, as they control the means of service delivery. This must all be music to the ears of the few software companies that have specialized in the home gateway, notably French based SoftAtHome, which was ahead of its time with its SOP (Software Operating Platform), but it now looks as if the rest of the industry is catching up. SoftAtHome has a modular platform that is hardware independent, and supports not just existing broadband delivered services such as TV, but also what the company believes will be big emerging applications in the digital home, such as home security, environmental control, and eventually remote healthcare. This is a good place to be if, as Arris claims, the game has indeed changed to one favoring the fat home gateway as an equal partner with the cloud.