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:
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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:
The IoT is a nebulous group of economic actors, from different sectors, who together constitute this new market. Its main actors are:
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:
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".
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:
At European level
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:
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.
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:
Successful deployment of an IoT project
First, if experiments and "POCs" 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.
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.
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.
 « 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
A question about IOT subjects ? Need to remove doubts in view of a future project? Send an email to Benjamin Fradelle, Tactis Associate Director.