IoT: the next digital revolution?

The sustained growth of the IoT is well established. According to the GSMA study, the number of IoT connections is expected to triple between 2018 and 2025, reaching 25 billion worldwide. The areas that will benefit from this growth are very diverse: energy, transport, urban planning, automotive, agriculture, health, etc. In France, the State and local authorities are trying to encourage the many projects underway and to come, in order not to miss this new digital revolution.

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What is IoT?

The International Telecommunication Union (ITU) defines the Internet of Things (IoT) as a "global infrastructure for the information society, which provides advanced services by interconnecting objects (physical or virtual), using existing or evolving interoperable information and communication technologies".

In concrete terms, the IoT refers just as much to:

  • Connected physical objects, which have interaction ports with their environment (sensors, antennas, embedded electronics)
  • Electronic communications networks, which allow the data from objects to be transported
  • Computer elements, which provide the capacity to store and/or process data.


IoT: the new digital revolution?

Infographie: IOT et Les objets connectés s'invitent chez les Français | Statista

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Towards a new IoT market

Representing 57% of global sales of connected objects, the 2.9 million connected objects dedicated to the home are still the most successful in France in 2017 in the sector, with an increase of 42% in one year (figures 2017). This market is itself dominated by security devices (e.g. alarms, cameras, etc.), followed by household appliances. Wearables (e.g. connected watches) increased by 16% with 1.6 million devices sold in 2017. Finally, the market for connected objects is completed by both the health sector, still in its infancy but with sales increasing by 57%, and the "gadgets" market (e. g. drones), with 460,000 objects sold for a 22% growth.

Reasons for IoT's success

Several factors can explain the success of the IoT:

  • Lower costs for storage, computing and communication technologies
  • The maturity of networks. For data to be usable at any time and in real time, a network is needed to connect objects to each other and to storage and analysis platforms. Depending on usage, two types of networks coexist in a complementary way. On the one hand, low speed networks, which are long range such as LoRa and Sigfox and short range such as Zigbee. On the other hand, high-speed networks, long-range networks such as 4G and wifi, and short-range networks such as Bluetooth.
  • The diversity of the offer. While start-ups were the first to enter the market, major manufacturers (e.g. Microsoft, Samsung, IBM, Suez, etc.) are now investing massively in the sector. Samsung announces that 100% of its devices will be connected by 2020.
  • The interconnection of connected objects. The connected objects only have added value for the consumer if they are interconnected with each other. The strength of the IoT lies in its ability to simultaneously process data of different kinds. This information is exploited either through project-specific platforms or by using shared tools in the cloud.
  • The rise of artificial intelligence (AI). Thanks to the new processing capabilities of AI, the potential uses of IoT are increased tenfold (e.g. predictive maintenance). Increasingly efficient, current AI technologies offer important data processing capabilities that allow the implementation of ambitious event prediction or data analysis projects in the light of a large number of variables.


IoT actors

The IoT is a nebulous group of economic actors, from different sectors, who together constitute this new market. Its main actors are:

  • Designers and manufacturers of connected objects,
  • The manufacturers of the computer components of these objects,
  • Operators and managers of data transmission networks,
  • The managers of the data collection and processing platforms,
  • Designers of software interfaces between objects and users,
  • Service providers who collect, analyze, and use user data provided by connected objects,
  • Public regulators, ensuring compliance with laws in terms of respect for life and private data, as well as security standards for connected objects.


Data processing: real added value of the IoT

The French Electronic Communications and Posts Regulatory Authority (Arcep) conducted a series of hearings in 2016, which revealed a consensus that the majority of the added value of connected objects in terms of income is based on the processing of data collected for their use in the production of services.

Consequently, the place of data is central to the IoT's economy, and its valuation is based on two dynamics:

  • In a closed circle, like a private actor who deploys a network of connected objects and the associated operating platform, directly benefiting from the information processed in an effort to optimize and improve its service or processes. This data is its property, it is not shared because of its potential sensitivity or strategic interest.
  • In open mode, when measured data are publicly made available on open platforms, called "Open Data", in order to promote open for the benefit of the community (called "open innovation").

The form of the data made available depends on the level of competence and need of the actors concerned, or on the strategy for data sharing. The data can be provided as raw data for processing without the need for upstream interpretation, or as data that is processed and presented using graphs on a supervision table, known as a "Dashboard".

IoT: a risk for personal data?

However, the success of IoT depends on the support and trust of users who must be able to maintain control over the use of their personal data. The transparency of projects and their ambitions, and the security of objects and networks are essential. The challenge is therefore to find a balance between meeting these conditions (which can be costly) and the costs of implementing IoT projects themselves.

In Europe, the General Data Protection Regulation (DGPS) has been regulating the use of users' personal data since 2018. Its main articles impose:

  • A harmonised framework, rules for the protection of private data in the European Union (EU),
  • An extraterritorial application, of the text for companies not domiciled in Europe but processing the personal data of European resident citizens,
  • An "explicit" and "positive" consent by the user for the use of his personal data,
  • The right to erasure,
  • Notifications in case of data leakage,
  • A privacy impact assessment of any project that collects or uses personal data,
  • Sanctions, up to €20 million or 4% of worldwide annual turnover for companies that do not comply with this text.


How to encourage the deployment of IoT?

At European level

Within the EU, the Horizon 2020 programme launches the IoT European Platforms Initiative (IoT-EPI), with a total budget of €50 billion.

Thanks to a partnership with 120 companies in the sector, this initiative aims to help more than 100 selected IoT projects, by investing between €30,000 and 150,000 per project.

At the French level

In France, it is the Direction Générale des Entreprises (DGE), in partnership with the thematic network French Tech #IoT #Manufacturing, which encourages the development of the IoT around two main axes:

  • Support for distribution stakeholders, based on a charter to promote start-ups manufacturing connected objects
  • Support to the sector, through calls for projects or even their financing (e.g. the Cité de l'objet connected to Angers).


Some recommendations to communities

We propose here, mainly for local authorities, some non-exhaustive recommendations regarding the implementation of an IoT project.

First of all, it is important to specify the community's position within any IoT project. Is the objective to develop as a Smart Territory or simply to help in the realization of a specific public service?

Then, it is necessary to take into account field data on current needs and characteristics. The establishment of internal community working groups is an approach that is increasingly being observed to define the key axes of an overall strategy before the design of the IoT project.

Once these data have been taken into account, the local authority must benchmark existing solutions. If nothing matches, the community should assess its need to find a partner for experimentation or even assistance in the development of new companies that can meet its needs.

If the adapted solution corresponds to an existing and mature technology, the community must consider the economic model to follow: what return on investment and what part of this investment should it take? The local authority will have to check whether it would not benefit from national or European aid in its project.

Once these issues are known and overcome, the community must consider the future management of this project: will it be necessary to use other services, for example? If this were the case, the community could issue a public call for tenders.

Technical considerations of IoT projects

Beyond the financing and governance issues of IoT projects, they are based on technical realities to be taken into consideration.

Technical criteria for selecting connectivity elements:

The IoT consists primarily of multiple sensors and network technologies to convey data flows to meet the various needs to be met. Seven criteria can be used to characterize the ideal technical solution to be implemented:

  • Coverage criteria: if a radio technology is selected, the coverage of outdoor, indoor and underground antennas should be carefully considered and compared with the range of the connected object to ensure the correct transmission of data flows. At the international level, an additional challenge lies in roaming agreements to ensure the communication of equipment through the networks of other operators. On the other hand, in purely wired technology, such as PLC or Ethernet links, the issue of coverage does not exist.
  • Capacity criterion: first, what is the average flow rate that must be guaranteed? Indeed, depending on the type of information disseminated and the frequency of measurement, the flow requirements are not the same. The capacity criterion also includes the acceptable latency time for the use under consideration. In addition, should the solution allow the connected object to be tracked in motion or is it fixed?
  • Autonomy criterion: if the connected object is not powered by the public or local electricity grid, the autonomy of its battery becomes a key element in the economic design of the solution. In addition, different battery management scenarios would have to be considered if the use of the equipment were to change during the project.
  • Reliability criterion: the issue of service quality is more or less complex to address depending on the environment in which the IoT network is located. However, network availability and message acknowledgement are critical elements of any IoT project.
  • Cost criteria: the right "quality of service / price" ratio is a major issue in IoT projects. In other words, it is a question of finding a balance between the cost of the various network equipment (sensors, antennas, repeaters, server or supervision software), the implementation costs (civil engineering, connection, operating costs) and the benefits of the new services offered (economic and social benefits).
  • Criterion for opening up networks and protocols: The risks and opportunities are not the same between proprietary and standard networks. In particular, the desired degree of interoperability is an element to be included in the strategic orientations of IoT projects.
  • Security criteria: since data represents the core of the added value of IoT projects, network security is an essential aspect to be addressed, even if it can be highly technical. Security rules are to be defined from the design phase of the IoT system architecture to be deployed, by deciding which security protocol to implement, which authentication rules to apply, etc. While light security would be acceptable on a small-scale experiment, it must be truly robust in the event of a massive deployment.


Successful deployment of an IoT project

First, if experiments and "POCs"[1] are rich in lessons before large-scale deployment, it is not necessary to multiply them but to think about the scalability of IoT projects from the design phase. This applies in particular to the choice of hardware and software components, which will certainly represent a larger initial investment but will allow for economies of scale in the long term.

The connectivity declined above in seven criteria must not be the limiting reagent of the emerging business, it must on the contrary be judiciously adapted to the project from its inception to enable it to meet its ambitions. The technological choices that need to be made at the beginning of the project must be made in the light of the desired functionalities, to be defined very clearly in advance.

Beyond the connectivity issue, the project's data management issue is not to be underestimated. Indeed, it is the "software bricks" that will receive the data flows, store them, process them, and make them available to the IoT network user, thus creating the expected value. The sizing of IT components is an element that can also prove to be the hinge of the project, as undersizing can considerably slow down the project, and oversizing can seriously unbalance the economic balance. The IT resource also includes interaction with the people who will be the actors of the social benefits to be generated, so its acceptance and proper use are decisive.

The business model should also be considered from the beginning of the project. While some social benefits are easily distinguishable, others may be revealed after the fact, although they should have been anticipated. But the economic viability of the project remains a sine qua non condition for its success, hence the importance of thinking about the economic model well in advance. And, as far as deployment is concerned, in the economic equation of an IoT project, technological choices will be decisive, in particular with regard to initial implementation costs and operating costs over the entire life of the project.

Finally, deployment is carried out by actors who must be chosen with care. Indeed, the establishment of such a network (data flow transmission infrastructures, interconnected with software components for data processing and availability) requires the interaction of various stakeholders, experts in their fields, whose management requires a detailed knowledge of the project and its actors. It is the challenge to entrust this mission to an external entity capable of justifying such expertise.

Tactis expertise in IoT

A leading consulting firm providing support to local authorities for the deployment of fibre optic networks, Tactis has recognised expertise in the field of connectivity.

Close to public authorities and private actors in the IoT world, Tactis aims to maintain its role as a neutral expert to advise local authorities and support the implementation of IoT projects in the territories.

Tactis' expertise is recognised in the development of electronic communications infrastructure and networks, as well as the digital transformation of territories in terms of uses and services. The combination of these two dimensions gives Tactis the ability and legitimacy to support global projects whose ambition is to build Smart Cities by putting digital technology at the service of citizens and the collective good.

With the IoT, all the vertical business lines of the territories become places of innovation: individual mobility, public transport, waste management, public lighting, energy networks, water management, etc.

The challenges are exciting and the opportunities offered by IoT are attractive, but projects can be complex to implement. Tactis' role is precisely to support local authorities in making political ambitions a reality.

First, Tactis can carry out a strategic study of opportunity and technical and economic feasibility to help clarify the community's expression of need. Subsequently, as an assistant to the contracting authority (AMOA), Tactis can be mandated to draw up the specifications and support the local authority during the public procurement procedure, whatever the form chosen.

External sources

[1] « Proof Of Concept » in English, are small-scale projects aiming to prove the good functioning of the main functionalities of a solution by testing it in real conditions

Tactis - Directeur associé - Benjamin Fradelle- Aménagement numérique des territoires

Benjamin Fradelle

Associate Director
Since 2002, Benjamin Fradelle has been developing expertise in digital spatial planning, both in terms of defining the strategy of local authorities and in the technical and economic approaches associated with public initiative networks.


Contact Benjamin Fradelle

A question about IOT subjects ? Need to remove doubts in view of a future project? Send an email to Benjamin Fradelle, Tactis Associate Director.

Tactis - Directeur associé - Benjamin Fradelle- Aménagement numérique des territoires

Benjamin Fradelle

Associate Director Tactis
Since 2002, Benjamin Fradelle has been developing expertise in digital spatial planning, both in terms of defining the strategy of local authorities and in the technical and economic approaches associated with public initiative networks.
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