IEEE ComSoc Technology Blog

A new FCC report shows that while many U.S. Internet service providers (ISPs) increased performance between 2012 and 2013, not all of them delivered the speeds that they advertised.  The FCC report found the average speed for subscribers is now 21.2 megabits per second- up roughly 36% from the average in 2012. Aside from Centurylink, the other DSL providers showed little or no improvement in broadband speeds. 

Note: The author has had AT&T U-Verse for 2 years during which time the speeds have not improved.  June 20, 2014 (today) test results:  12.69M b/sec downstream and 1.93M b/sec upstream. No change within last 2 years, but above the advertised speed range for the access tier I subscribe to: 

AT&T U-verse High Speed Internet Max:   6.1 Mb/sec – 12.0 Mb/sec

http://www.att.net/speedtiers

For 10 years prior to U-Verse, I had Pac Bell/SBC/AT&T DSL which topped out at 3Mb/sec downstream and was NOT nearly as reliable as U-Verse Internet access.  All over the same old twisted pair copper going into my home.

Upload speeds varied greatly among broadband providers, since according to the report most consumers tend to download far more data than they upload. Frontier and Verizon, which market fiber-based services, offered upload speeds as fast as 25 Mbps and 35 Mbps, respectively; no other provider offers upload speeds of more than 10 Mbps. (AT&T doesn’t advertise download speed ranges for U-Verse on their website).

The FCC plans to write to the CEOs of the DSL providers and other companies that failed to consistently meet their advertised speeds, to find out why. An agency official singled out Windstream for having among the worst performance.

Consistency of speeds is also a problem, as some ISPs delivered approximately 60 percent of the speeds they promised 80 percent of the time to 80 percent of customers, according to the report. This is the first time the commission measured speed consistency in its annual report on the topic, and the results concerned FCC Chairman Tom Wheeler.   “Consumers deserve to get what they pay for,” Wheeler said in a statement announcing the report Wednesday. “I’ve directed FCC staff to write to the underperforming companies to ask why this happened and what they will do to solve this.”  

Please refer to this chart showing consistent download speed vs advertised speed 80% of time/80% of subscribers.  All major U.S. Internet Service Providers (ISPs) are included:

The FCC report states that “Cablevision delivered 100% or better of advertised speed to 80% of our panelists 80% of the time during peak periods, and about half the ISPs delivered less than about 90% or better of the advertised speed for 80/80. However about one-third of the ISPs delivered only 60 percent or better of advertised speeds 80 percent of the time to 80 percent of the consumers.”  This is a metric that the FCC expects ISPs to improve upon over the course of the next year. Do you think that will occur?

Those ISPs using DSL technology show little or no improvement in maximum speeds, with the sole exception of Qwest/Centurylink, which this past year doubled its highest download speed within specific market areas. The reason for this may be that DSL, unlike cable and fiber technologies, is strongly dependent upon the length of the copper wire (or “loop”) from the residence to the service provider’s terminating electronic equipment, such that obtaining higher data speeds would require companies to make significant capital investments across a market area to shorten the copper loops. On the other hand, both fiber and cable technologies intrinsically support higher bandwidths, and can support even higher speeds with more incremental investments.

The FCC’s primary conclusions from this study:

1. Many ISPs now closely meet or exceed the speeds they advertise, but there continues to be room for improvement.
2. New metric this year – Consistency of speeds – also shows significant room for improvement.
3. Consumers are continuing to migrate to faster speed tiers.
4. Improvements in Speed are not Uniform Across Speed Tiers Tested
5. There were sharp differences in Upload Speeds

The FCC report says that increasing consumer demand for broadband access is causing congestion on networks due to video streaming services like Netflix. As that demand increases, companies using digital subscriber line (DSL) service (based on copper wires) cannot compete with the growing speeds of cable and fiber Internet.  An official said the FCC plans to act on that issue later this year after obtaining more information. 

Providers using fiber-based broadband connected directly to consumers’ households delivered 113 percent of advertised download speeds and 114 percent of advertised upload speeds, making it the best traffic option available. But telecom companies have not invested in expanding fiber-optic networks, which is the only way to compete with Internet speeds offered by cable companies, says Harold Feld, senior vice president of consumer advocacy group Public Knowledge.  “We are ultimately heading to a cable monopoly because on the technology side the other technologies cannot keep up,” Feld says, citing arguments made by Susan Crawford, a former tech policy adviser for the Obama administration who is now a visiting professor at Harvard Law School. “We see people want faster speeds, and that DSL as a technology cannot keep up unless companies make very significant investments.” 

This study may help the case for AT&T to purchase DirecTV, as the telecom giant has argued it needs money to upgrade its DSL network. Comcast networks performed well in the study, which may potentially weaken its argument that its customers need more Internet services through the purchase of Time Warner Cable. 

References:

FCC Report

http://data.fcc.gov/download/measuring-broadband-america/2014/2014-Fixed…

FCC Charts – Measuring Broadband America

http://www.fcc.gov/measuring-broadband-america/charts

Articles

http://imarketreports.com/fcc-finds-dsl-speeds-arent-keeping-up-with-cab…

http://online.wsj.com/articles/fcc-report-on-broadband-speeds-dsl-lags-b…

http://www.usnews.com/news/blogs/data-mine/2014/06/19/fcc-reveals-incons…

Comment from Ken Pyle (viodi.com):

I find it interesting that at least two cable companies announced major increases in their speeds this week. 

Comment from IEEE DIscussion Group Member George Ginis (3 points):

Infonetics Research released excerpts from its 2014 Ethernet and IP MPLS VPN Services report, which analyzes the market for wholesale and retail Ethernet services and managed and unmanaged layer 2 and layer 3 IP MPLS VPN services.

Worldwide revenue from Ethernet and IP MPLS VPN services last year totaled $62.6 billion, a 12% improvement from 2012, according to Infonetics. The market research firm credited cloud-based services for the increase. “Both segments are growing at a healthy clip and will continue to do so, with Ethernet services growing about twice as fast as IP MPLS VPNs through 2017,” said Michael Howard of Infonetics.  See below for more quotes from Mr. Howard.

ETHERNET AND IP MPLS VPN MARKET HIGHLIGHTS
.    The combined global Ethernet services and IP MPLS VPN services markets totaled $62.6 billion in 2013, up 12% from the year prior
.    Keeping the momentum going are cloud services accessed via IP VPNs, Ethernet services, and mobile backhaul transport over Ethernet services
.    Revenue from Ethernet services delivered on 10GE and 100GE is forecast by Infonetics to grow 300% between 2013 and 2018
.    In 2013, Asia Pacific made up the biggest share of Ethernet services revenue and will continue to do so through 2018

“Ethernet services continued to gain momentum in 2013, easily outpacing IP MPLS VPN services. Both segments are growing at a healthy clip and will continue to do so, with Ethernet services growing about twice as fast as IP MPLS VPNs through 2017,” reports Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research.

Howard adds: “Software-defined networking (SDN) and network functions virtualization (NFV) technologies will change the way service providers operate their networks and, more important, how they deliver services. The biggest change will come in the types of security services offered over IP MPLS VPNs and Ethernet services-for example, firewalls, SSL VPNs, intrusion detection, parental controls-and the pace at which they’re made available.”

From a related Infonetics report excerpt:  “Historically, data centers have been protected by big-iron security solutions and complex webs of security appliances and load-balancing infrastructure,” says Jeff Wilson, principal analyst for security at Infonetics Research. “But as more providers virtualize their data centers and roll out SDNs and NFV, we anticipate a fairly significant revenue transition from hardware appliances to virtual appliances and purpose-built security solutions that interface directly with hypervisors, with SDN controllers via APIs, or orchestration platforms.”

Read more at: http://www.infonetics.com/pr/2014/2H13-Data-Center-Security-Products-Market-Highlights.asp  and

http://www.infonetics.com/pr/2014/Ethernet-and-IP-MPLS-VPN-Services-Mark…

REPORT SYNOPSIS

Infonetics’ annual IP MPLS VPN and Ethernet services report provides market size, forecasts through 2018, analysis, and trends for wholesale and retail Ethernet services (Internet and WAN access, E-LINE, E-LAN services) by speed, and managed and unmanaged layer 2 and layer 3 IP MPLS VPN services. Data is presented by country (U.S., Canada) and region: North America, EMEA (Europe, Middle East, Africa), Asia Pacific, CALA (Caribbean, Latin America) and worldwide.

More info at:  http://www.infonetics.com/pr/2014/Ethernet-and-IP-MPLS-VPN-Services-Market-Highlights.asp

To buy report, contact Infonetics: www.infonetics.com/contact.asp

NFV WEBINAR
Join Michael Howard June 19 at 11:00 AM EDT for NFV: An Easier Initial Target Than SDN?, a free, live event for operators exploring use cases, lessons learned, and recommendations for developing NFV projects. Attend live or access the replay at:
http://w.on24.com/r.htm?e=793989&s=1&k=BA88F4D4A551DA1913530B000C135707

AT&T’s GigaPower -which competes with Google Fiber- is currently available in Austin, TX.  This Tuesday, AT&T received approval from the city of Winston-Salem, N.C., to begin building out its FTTH based GigaPower service.  That comes two months after AT&T announced it was in talks with the North Carolina Next Generation Network to bring high-speed fiber to the state. Winston-Salem is one of six cities in North Carolina expected to receive AT&T’s GigaPower service.  Another is Durham, NC, which was announced today:   http://about.att.com/story/att_uverse_with_gigapower_fiber_network_coming_to_durham.html

The company expects GigaPower construction and deployment to begin in other communities this year.  Metro areas being explored for GigaPower include:  Atlanta, Augusta, Charlotte, Chicago, Cleveland, Dallas, Fort Lauderdale, Ft. Worth, Greensboro, Houston, Jacksonville, Kansas City, Los Angeles, Miami, Nashville, Oakland, Orlando, Raleigh-Durham, San Antonio, San Diego, San Francisco, San Jose/Santa Clara, St. Louis.

This blog from Eric Small, AT&T Vice President of Fiber Broadband Planning, explains some of the more technical aspects as to how the company is rolling out GigaFiber: http://blogs.att.net/consumerblog/story/a7791741

Technical Outline of GigaPower Process:

·         U-verse with GigaPower enables residents who sign up to enjoy speeds of up to 300 megabytes per second

o   Within the next year, AT&T plans to boost speeds to up to 1 gigabyte per second

·         Traditionally, fiber network connection that starts at AT&T’s central switching office. Fiber cable from the office runs to a VRAD equipment box in the neighborhood, which then uses existing copper wires to transmit U-verse signals to homes

o   GigaPower bypasses the VRAD by using a passive optical splitter which runs fiber directly into homes

·         Armored fiber ‘drop’ cable connects the customer home to the network

o   Drop cable connects to the Optical Network Terminal (ONT) outside of the home. A CAT5e or CAT6 cable connects the ONT to the U-verse residential gateway inside the home.

o   Cable splicing is done in the factory instead of the field, saving time and money and enables higher quality connection

Reference:

More information on GigaPower can be found at:  http://about.att.com/mediakit/gigapower

Addendum:

As part of it’s proposed acquistion of DirecTV, AT&T told the FCC and Justice Dept:

“AT&T commits to deploying high-speed broadband to 15 million new customers as part of the transaction, but only two million will receive high-speed fiber connections.”

AT&T said its U-Verse product, which supplies high-speed broadband and pay-TV services to almost six million customers, could at best cover only a quarter of the nation’s TV households.

http://online.wsj.com/news/articles/SB2000142405270230364270457961871127…

Infonetics Research released excerpts from its 1st quarter 2014 (1Q14) Microwave Equipment report, which tracks time-division multiplexing (TDM), Ethernet, and dual Ethernet/TDM microwave equipment.

MICROWAVE EQUIPMENT MARKET HIGHLIGHTS:
.    Microwave equipment revenue totaled $1 billion worldwide in 1Q14, down 17% sequentially, and down 7% from the year-ago quarter
.    Revenue for every microwave product segment-TDM, dual Ethernet/TDM, Ethernet, access, backhaul, transport-declined in 1Q14 from 4Q13
.    Backhaul continues to dominate the microwave market, while access and transport remain stable niche segments
.    Ericsson held steady atop the microwave equipment revenue share leaderboard in 1Q14, while NEC leapfrogged Huawei to claim the #2 spot
.    By 2018, the average revenue per unit (ARPU) for Ethernet-only microwave gear is anticipated to fall to around half its 2013 value

MICROWAVE REPORT SYNOPSIS:
Infonetics’ quarterly microwave equipment report provides worldwide and regional market size, vendor market share, forecasts through 2018, analysis, and trends for Ethernet, TDM, and hybrid microwave equipment by spectrum, capacity, form factor, architecture, and line of sight. Vendors tracked: Alcatel-Lucent, Aviat Networks, Ceragon, DragonWave, Ericsson, Exalt, Huawei, Intracom, NEC, SIAE, ZTE, and others.

ANALYST NOTE:

 “The proliferation of LTE-A upgrades and small cells deployments was not enough to stop the microwave equipment market from sliding downward in the first quarter of 2014, a casualty of continuing pricing pressures and inter-technology competition with wireline backhaul alternatives, particularly fiber-based solutions,” notes Richard Webb, directing analyst for mobile backhaul and small cells at Infonetics Research. “The seasonal decline was much more severe than usual, suggesting a deeper malaise in the market.”

Webb adds: “Even with the arrival of 5G towards 2018, the microwave backhaul market may be arriving at the limit of demand for increasing backhaul capacity from the cell site, as many will be more than adequately future-proofed by this point.”

To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp

RELATED REPORT EXCERPTS:
.    China’s huge LTE rollouts and EU network upgrades push carrier capex to $354B this year
.    China Mobile increases capital intensity 6% year-over-year
.    Carriers going gangbusters with WiFi and Hotspot 2.0
.    Small cell market on track to increase 65% this year
.    Alcatel-Lucent, Huawei and Cisco get top marks from operators in mobile backhaul survey

According to  Dell’Oro Group, the point-to-point Microwave Transmission equipment market declined 10 percent during the trailing four quarter period ending in the first quarter of 2014.

“Demand for microwave transmission equipment has been under pressure for quite some time with little relief in the first quarter of 2014,” said Jimmy Yu, Vice President of Microwave Transmission research at Dell’Oro Group. “We think things will improve as we enter the second half of the year, but this is largely dependent on improving conditions in two of the primary microwave market regions, Europe and India. On a brighter note, packet microwave sales achieved another quarter of positive growth. We estimate that for the trailing four quarter period ending in 1Q14, packet microwave revenue grew 13 percent year-over-year,” Yu added.

In-line with market demand, nearly all major microwave vendors experienced a year-over-year revenue decline. Among the top vendors, Alcatel-Lucent’s microwave revenues faired the best, growing slightly above zero percent due to their strong market position in the Packet Microwave segment.

Infonetics Research released vendor market share and analysis from its 1st  quarter 2014 (1Q14) Service Provider Routers and Switches report.

CARRIER ROUTER AND SWITCH MARKET HIGHLIGHTS:
 .    The global carrier router and switch market, including IP edge and core routers and carrier Ethernet switches (CES), totaled $3.2 billion in 1Q14, down 13% from 4Q13, and up just 2% from the year-ago quarter
 .    Revenue for all product segments-IP edge and core routers and CES-declined by double digits sequentially in 1Q14
 .    Likewise, all major geographical regions (NA, EMEA, APAC, CALA) are also down from the prior quarter, though all but N. America are up from the same period a year ago
 .    The top 4 router and CES vendors stayed in dominant positions in 1Q14, but positions 2-4 played musical chairs: Cisco maintained its lead, Juniper rose to 2nd, Alcatel-Lucent rose to 3rd, and Huawei dropped to 4th
 .    Infonetics is projecting 5-year (2013-2018) CAGRs of 4.3% for edge routers, 2.9% for core routers, and 0.7% for CES

CARRIER ROUTER/SWITCH REPORT SYNOPSIS:

Infonetics’ quarterly service provider router and switch report provides worldwide, regional, China, and Japan market share, market size, forecasts through 2018, analysis, and trends for IP edge and core routers and carrier Ethernet switches. Vendors tracked: Alaxala, Alcatel-Lucent, Brocade, Ciena, Cisco, Coriant, Ericsson, Fujitsu, Hitachi, Huawei, Juniper, NEC, UTStarcom, ZTE, and others.

RELATED REPORT EXCERPTS:
 .    China’s huge LTE rollouts and EU network upgrades push carrier capex to $354B this year
 .    China Mobile increases capital intensity 6% year-over-year
 .    Networking ports hit $39 billion; 40G booming in the data center, 100G taking off in the core
 .    SDN and NFV moving from lab to field trials; Operators name top NFV use case
 

ANALYST NOTE:
 “Last quarter, we identified the ‘SDN hesitation,’ where we believe the enormity of the coming software-defined networking and network functions virtualization (NFV) transformation is making carriers be more cautious with their spending. This hesitation reared its head in the first quarter of 2014, where global service provider router and switch revenue increased only 2% from the year-ago quarter,” notes Michael Howard, principal analyst for carrier networks and co-founder of Infonetics Research.
 
“We believe the current generation of high-capacity edge and core routers can be nursed along for a while as the detailed steps of the SDN-NFV transformation are defined by each service provider-and many of the largest operators in the world are involved, including AT&T, BT, Deutsche Telekom, Telefónica, NTT, China Telecom, and China Mobile,” continues Howard. “And there is intensifying focus on multiple CDNs (content delivery networks) and smart traffic management across various routes and alternative routes to make routers and optical gear cooperate more closely.”

To buy the report, contact Infonetics: http://www.infonetics.com/contact.asp

Editor’s Comment:

We’re not at all surprised by this lackluster growth in carrier switch/router market.  We think it won’t get any better any time soon.  That’s because of all the confusion caused by vendors touting their “SDN/NFV” solutions which don’t interoperate with any other like vendor.  Moreover, we see carriers moving to higher speed inter-office optical interconnects with fewer high performance switch/routers and optical ports needed.

Multi-Layer Capacity Planning for IP-Optical Networks, published in the Jan 2014 IEEE Communications magazine does a good job explaining how carriers might save 40-60% of routing ports, transponders and wavelengths in the core network and up to 25% in metro/regional networks.  The authors are from Cisco and two well regarded carriers -DT and Telefonica. 

One of the key findings:  “Applying this methodology to two real data sets provided by two large European network operators, showed significant savings in the total number of required router interfaces, transponders, and wavelengths, on the order of 40–60 percent in the core. In addition, if MLR-A is applied to the aggregation region, it should provide an additional gain up to 25 percent in metro/regional interfaces.”

If that’s the case, then fewer switch/routers will be sold to global carriers in the near future. Furthermore, prices are likely to drop precipitously due to white labeled/ODM built switch/routers that are compatible with various SDN/NFV/Open Networking schemes.

Scott Thompson’s report/edited by Alan J Weissberger:

Introduction:

Cisco Live! 2014, the company’s premier annual developer/customer event in the  U.S., seems to have helped frame Cisco as a company that is carefully  and conscientiously navigating a rapidly shifting communications  equipment landscape. The company appears to be gaining a reasonable  amount of momentum with its new products and architectures, including  its Nexus 9000 platform and CRS-X, and it appears that Cisco has  joined the SDN “revolution” with a credible architecture story. While  we expect there may be potential for near-term upside to consensus  estimates, we remain cautious. We continue to believe that the  longer-term architectural impacts of SDN could challenge Cisco’s  business.

Nexus 9000 is the product to beat:

Cisco’s new Nexus 9000 platform seems to be one of the switches to beat in the data center networking space. We suspect Cisco has found a way to use the platform not only to deliver industry-leading pricing for 10G Ethernet     ports, but also to lever the product’s higher density and optical capacities to keep revenue consistent with Nexus 5000 and 7000 run-rates.

Cisco believes the gross margin mix on the newer products it recently released, or is about to release, is higher than past products. If immediately accretive, we believe this could help bolster management’s ability to keep consolidated GMs above 60%. The Nexus 9000 has several different configurations based around the Trident II chipset. While stand-alone Trident II silicon is standard in the low-end 9000 platform, Cisco’s custom ASICs add functionality such as VXLAN routing, extra memory, and expansive VLAN capacity to scale to several times the size or previous TCAM capacities. This flexible configuration not only blurs the lines between the switching and routing lines but also       provides a full range of cost points, potentially able to lead the industry on price and protect Cisco’s market share with less impact to margins than we had at first expected.

Cisco’s Sales Team:

Cisco’s sales team is poised to gain traction with the Nexus 9000. It has been several quarters since the Cisco sales team has had an industry-leading networking product to ignite the sales engine. We expect the Nexus 9000, and the series of products that are likely to follow, represents a product that could drive a significant switching upgrade cycle. These types of cycles often drive margin share gains for Cisco, and we expect this to be no different.

Competitors likely to come under pressure from Cisco’s expected aggressive pricing and sales tactics could be Juniper, Brocade, and to some extent Alcatel-Lucent and Ciena.  Time will tell how aggressively Cisco will cannibalize its existing product, but industry trends appear to encourage it.

Cisco shifts its focus to software-centric solutions:

 Cisco Live marked a notable change in Cisco’s product strategy, from mostly hardware to a more hybrid combination of hardware, software, and cloud applications. With bold statements such as “infrastructure is a commodity,” CEO Chambers foreshadowed a shift in key product offerings: software and infrastructure as a service that delivers       holistic solutions instead of stand-alone products.

We expect the Cisco ONE suite and smart licensing to be available in Fall 2014, with sales beginning to ramp as early as 2015.

Will white box (low-cost,non-branded ODM bulit hardware) be a threat to Cisco in the next 6-18 months?

Although we believe white box may not take a sizable portion ofmarket share away from Cisco, we believe it will likely put greaterthan-expected pressure on pricing. We believe this to be one of Cisco s main gross margins challenges in 2014 and 2015.

Will new and unexpected entrants into the data networking space take market share from Cisco in the next 2+ years?

Significant technical and strategic shifts are affecting the IT landscape. We expect Cisco to be threatened, and we expect these to become threats to an increasingly large number of IT players as technology shifts drive the industry toward consolidation.

Introduction:

In our fourth and final article on TiECon 2014, we summarize the Internet of Things (IoT) market opportunites and advice for entrepreneurs, as described by Sandy Carter, IBM VP & General Manager of IBM Ecosystem Development during her TiECon IoT keynote speech on May 16th. Consistent with the theme of TiECON, Ms Carter addressed where IoT entrepreneurs should concentrate their time and what they need to do to succeed.

Sandy contrasted the common vs. unique aspects of the IoT, identified three customer use cases and several common roles, examined consumer vs. enterprise focus, and suggested where new innovation and investment can produce material improvements over the next several years.  It was a very well researched and clearly presented talk.

Presentation Take-aways:

As one might expect, investment and opportunities in the IoT are expanding rapidly.  And that will continue for many years.  By 2020, it’s forecast that $300B in incremental revenue will derive from IoT products and services (source of that forecast was not identified).

Three items are needed for the above IoT forecast to be realized, according to Ms Carter:

• Focus on domain knowledge expertise, value drivers, and design (focus on outcome- not the devices(s)).
• Integrated solution that includes data analytics and cognitive computing along with monitoring sensors.
• Ecosystem that includes many different types of vendors, service providers, software suppliers and system integrators.

The IoT opportunity exists by vertical industry segment rather than a single monolithic market (which confirms what all IoT market researchers have said to date).  The top ranked IoT industry verticals (in order of revenue opportunities) are: auto, healthcare, industrial, retail, asset management, utilities/energy, home monitoring & control/building automation.

When selling IoT solutions, vendors and service providers must target the right buyer within the company they’re trying to sell to.  For example, the IoT solution provider should determine if it is the facility manager vs IT manager vs department head.  Value driven use cases will also be important for the IoT provider to demonstate solutions for the industry segment(s) relevant to the targeted customers.

IoT Integrated solution opportunities identified were:

• Data collection at $87B
• Analystics at $237B
• Cognitive Computing at $370B
• Data analytics that are optimized for each customer was said to be a $180B opportunity in 2016.

Note: The timeframe for the first three forecasts were not mentioned during Sandy’s keynote.  The source noted on the slide was an Harbor Research report: Where will value be created in IoT,  April 7, 2014.  When attempting to search on line for same, we could only find a 2013 forecast from that firm: 

http://harborresearch.com/wp-content/uploads/2013/08/Harbor-Research_IoT-Market-Opps-Paper_2013.pdf

IoT Collaboration Examples:

1.  IBM is working with Honda to collect data related to battery performance in electric vehicles (EV) on the road.  The objective is to analyze massive amounts of data to better determine how those EV batteries operate.  To improve battery life and perfomance, the data will be optimized for decision making.  That will result in increased EV performance and enhanced customer satisfaction.

Other IoT opportunities for EV were said to be: device performance, maintenance contracts, warranties/recalls, and customer service.

2.  IBM is working with the Flint River Basin Partnership to collect, analyze, and optimize data from various sensor readings. The objective is to make more informed irrigation scheduling decisions to conserve water, improve crop yields and mitigate the impact of future droughts. That will be done by analyzing and optimizing unstructured sensor data to predict irrigation needs based on weather conditions or crop health. The result of this collaboration will be the deployment of innovative conservation measures to enhance agricultural efficiency by up to 20 percent.

An extension of the above opportunites would be to utlize mutliple protocols and technologies to collect and analyze data from many different devices.  Then to merge and reconcile that unstructured data from multiple input sources.

3.  Streetline (http://www.streetline.com/company/in-the-news/) has been working with the city of Los Angeles on an optimized parking solution.  The system collects and analyzes parking spot data and makes decisions to optimize parking spot usage.  This has reduced traffic congestion and resulted in increased motorist satisfaction.  It’s also generated more parking revenue fo the city of L.A.

Note: Sandy predicted that over 100B sensor readings would be made daily by 2020 (she didn’t say whether that was global or just for the U.S.)

Suggested IoT Ecosystem Value for Entrepreneurs:

• End to end technology and business monitoring
• Raise capital/ procure investments
• Scale globally- using one or more partner companies or a network of companies
• Mentoring as a recipe for success
• Cloud connect your thoughts (meaning that part of the solution is data analytics/number crunching/cognitive computing in the cloud)
• Address security and privacy concerns in the provided IoT system solution

The connected car was presented as an IoT ecosystem example.  The IBM Watson Cloud, with over 1700 developers, was given as an example of IoT cognitive computing (probably the best cloud solution available in this author’s opinion). For more information on Watson:   http://www.ibm.com/smarterplanet/us/en/ibmwatson/ecosystem.html

Summary and Conclusions:

What really matters (reiterated):  

• Focus with domain knowledge as driver of value.  Concentrate on long term growth, revenues and profits.
• Offer an Integrated solution: collect, analyze, optimize data.
• Build an ecosystem with mentoring, capital and global scale.

Bottom line:

To succeed in the IoT marketplace a company must provide an integrated solution (likely with one or more partner companies) that collects, analyzes, and optimizes unstructured data from “things.”  Then design, operate and manage.

From her keynote speech, it’s clear that Sandy Carter recognizes the opportunities available in leveraging the Internet of Things (IoT) for both established corporations (like IBM) and entrepreneurs alike.  She also provided valuable insight into what it takes to be successful in this large, emerging market.

Introduction:

Cloud-based services have already evolved to support the Internet of Everything₁ (IoE).  But what about use cases in which no roundtrip to a server in the Cloud is called for?  What about the “Internet of Things near or close to me”?

Rob Chandhok, SVP of Qualcomm Technologies Inc. and President of Qualcomm Interactive Platforms, discussed IoE use cases for direct peer connection and communication among devices and apps that are physically near the user. Proximal networking, in which the Cloud is accessed only when it makes sense and only by one member of the network, opens up a vast array of new possibilities for developers, entrepreneurs, and brands alike.

Rob is responsible for Qualcomm  strategies that address how people can take advantage of and benefit from the Internet  of Everything, wearable computing and augmented reality as Qualcomm drives the next level of user experience in a massively interconnected and mobile-centric world.

Note 1.  Qualcomm doesn’t seem to distinguish between the Internet of Things (IoT) and the Internet of Everything (IoE) as per this article.  Qualcomm states on its IoE web page:

“When smart things everywhere are connected together, we will be able to do more and be more. This is the Internet of Everything (IoE), a paradigm shift that marks a new era of opportunity for everyone, from consumers and businesses to cities and governments….”

“Qualcomm is creating the fabric of IoE for everyone everywhere to enable this Digital Sixth Sense.”

Presentation:

The Internet of Everything (IoE) is already here and it will get a whole lot bigger.  There’s been a massive surge in connected things that’s already begun.  Gartner Group (and others) have forecast 25B permanently connected things by 2020.  Over half of those connected devices will be non-handsets, such as lights, speakers, security cameras, plug-in electric vehicles, and various types of home/industrial appliances.

There’ll be new connections, new device capabilities and enhanced user experiences.  That translates into awareness (capturing data about you and your environment), connectivity (exchanging information to/from the cloud), and interactivity (relevant, seamless information and control).  Physical layer protocols (e.g. WiFi, Zigbee, Blue Tooth, 3G/4G) for wireless connected devices should be able to change without changing the software/firmware in them.

Today, IoE is cloud based and fragmented, with different cloud systems for each type of appliance, e.g. speakers, TV, refrigerators, washing machines, etc. This author believes this has to change if IoE is to realize its potential and be a huge market (or industry vertical markets).

A successful IoT architecture will be more complex than client/server computing. A heterogeneous IoE will bring many challenges, including: discovery, identity, adaptation, manage, interoperate, exchange information and services, security, and privacy.  Let’s take identity as an example.  It includes such capabilities as determing what servers are nearby, what interfaces and APIs are available for the devices along with other attributes.  Security involves eliminating attacks and thwarting bad actors from the public Internet.

IoE “near me,” is a dynamic subset of the IoE that involves proximity.  Towards that end, an open source software platform called AllJoyn,  https://www.alljoyn.org/  was created to provide a meaningful interaction between smart things via a common language.  AllJoyn was initially developed by Qualcomm Innovation Center, Inc. and is now a collaborative open source project of the AllSeen Alliance, It gives manufacturers and developers the tools they need to invent new ways for smart things to work together.

AllJoyn was said to facilitate and/or provide: an open connectivity framework over both wireless and wire-line networks, interoperability between connected devices/things, core services as basic building blocks, and an ecosystem that addresses many vertical industry use cases.  

Web APIs offer developers access to web service capabilities -from virtual objects to physical things.  AllJoyn APIs give developers access to the capabilities of smart devices/things.  They are also building blocks to access system resources.  An objective is to make AllJoyn the lingua franca of the IoE, analagous to the role of HTTP for the world wide web.

Going forward, innovation will be crticially important for the IoE and “Proximal Networking.”  It’s a “green field rich in opportunity for entrepreneurs with vision,” according to Rob.

References:

What it is: https://www.alljoyn.org/about

Documentation and guides – https://allseenalliance.org/developerresources/alljoyn/docsdownloads

General Info and FAQs  – https://allseenallianceorg/developer resources/faqs

AllJoyn SDKs – https://www.alljoyn.org/docs-and-downloads

An AllJoyn tutorial is available once a developer establishes an on line account at: https://www.alljoyn.org/user/register

Post-TiECON Research – Basics of AllJoyn:

Every AllJoyn application requires a BusAttachment to attach to the Bus in order to advertise, discover, and communicate with other applications.  The BusAttachment is the gateway (between a developer’s application and other applications) that handles all of the lower-level networking stacks. It provides a basis for several processes one develop in their application.

Most applications will have only one BusAttachment in which they use to interact with the AllJoyn API calls.
Other processes that every AllJoyn application must follow include:

•Advertise and/or Discovery

•Create a bus interface and bus object

•Create and join sessions

•Interact over the interface

AllJoyn application process

                                                               Figure 1. AllJoyn application workflow

Introduction:

 In this second article on TiECon 2014, we examine the key issues, technologies, standards and technical challenges for the Industrial Internet and related Industrial Internet of Things (IoT) as discussed in the Infrastructure for IoT panel session.  Note that the IoT is referred to as IoE by Cisco and also by Qualcomm.

Infrastructure for (Industrial) IoT Session Abstract:

The key components required for the Industrial IoT were detailed in this panel session.  Many questions were raised:

• Should all data be sent from devices to the cloud or is some form of intelligent decision making needed at the network edge?  
• What Physical layer interfaces are needed in IoT devices?  Note that there are many physical media types, from various types of Ethernet on shielded and unshielded twisted pair to IEEE 802.11 WiFi, IEEE 802.15.4 Zigbee, Z-Wave and EnOcean.  Will this “alphabet soup” of acronyms be dwindled down to a few Physical layer interfaces that most IoT endpoints will support?  
• Similarly, there are many services layers, from various flavors of ZigBee profiles, to legacy industrial protocols like LonWorks, BacNet, SCADA, DALI and many more.  And there are many management platforms in the works. 
• What’s needed for IoT security?  
• Given the diversity in the technical ecosystem, do we need to get to a common set of Industrial Internet standards, or is that not possible?  

Moderator:   Paul R. Teich, Moor Insights & Strategy 

Panelists:

• Carl Stjernfeldt,  Shell Technology Ventures
• Joseph J. Salvo,  Complex Systems Engineering Laboratory at GE Global Research
• Nate D’Anna, Cisco Systems

A few introductory remarks worth noting:

• Shell is using the IoT in oil drilling operations where “last mile” connectivity in the ocean is quite challenging –  9K feet under the surface of the ocean.
• GE is buliding out an “Industrial Internet,” which is a virtual network overlay on a physical network.  
• A consortium of companies (AT&T, Cisco, GE, IBM and Intel) was launched in late March 2014 to foster interoperability in the Industrial Internet.  Goals are to identify requirements for open interoperability standards and define common architectures to connect smart devices, machines, people, processes and data. 
• Cisco has a $100M venture fund to invest in the IoE and move it forward.
• There’s a huge need to get real time data from a variety of complex industrial sub-systems (e.g. a jet engine) via satellite, microwave, fiber optic long haul or short range WiFi/Zigbee wireless networks.
• Trade-off between bandwidth vs reliability is very important for the Industrial Internet and ruggedized IoT applications.

Several important questions need to be addressed for the Industrial IoT:

• There’s a lot of IoT data collected for compute/storage.  How much is actually needed and how should data decision making be made so that not all data collected is sent from industrial premises to the cloud?
• Where do IoT standards take over from customized, vendor specific solutions?  
• How will minds and machines be connected in the Industrial Internet? 

Here are the panelists opinions on these and related issues.

Each layer of the protocol stack will need flexibility to accomodate measuring, monitoring, analytics, automated decision making in the field, and other tasks.

Shell colects a tremendous amount of data in the field, but uses “intelligent pushback” to get large amounts of that data processed, analyzed with the results coveyed to a decision maker in the field (presumably, a human operator).

GE sees a strong trend of “data commoditization and lower level knowledge.”  Today, everyone has access to lots of data and information.  Future market and technical differentiation will be centered around decision making, learning what data to forget/discard and what to retain/remember.  

Managing the onslaught of incoming real time data (monitoring status, alarms and measurements) will be critical in the industrial world.  Smarter and faster edge devices that monitor complex real time systems and make decisions what data to retain and what to push back (to the cloud/data center) for number crunching.

Cisco sees a huge industrial customer demand for collecting large amounts of data.  They believe decision making is needed at the network edge – to only send relevant data to the cloud for processing.  “Make decisions locally, by smart devices at the edge of the network,” said Cisco’s Nate D’Anna.

GE sees the context of data becoming more important than the data itself, said Joseph Salvo of GE’s Complex Systems Engineering Laboratory.  There’s a need for data storage centers to only retain relevant data from connected devices with most of it discarded at the network edge.  This seems identical to Cisco’s view expressed above.  

Mr. Salvo sees a hyper-connected world with a changing role for computation and big data.  Analyzing vast amounts of data, predicting and changing system performance are the key attributes of this new computational model.  “We are at an inflection point. The next wave of productivity will connect brilliant machines and people,” he said.

Security is certainly a critical issue.  It must take into account the hardware, software, network, devices/components as well as the human factor, according to Salvo.  It must recognize the context of what’s happening in the industrial systems being monitored/controlled.  Note:  No security standards, methods or procedures were identified.

Standards help market adoption as they facilitate interoperability, mass production and lower costs.   However, there are a plethora of wireless and wire-line connectivity standards which might have to be supported for different IoT market segments.  This may create a “matrix of pain,” said one panelist.   It could be that IP (Network Layer protocol) will be the lowest common denominator that all Internet connected “things” support.  Speaking for GE, Salvo said: “The Industrial Internet wants interoperability (over vendor specific solutions).  Like USB I/O devices that auto-configure and work.”  Joe suggested that the (Industrial Internet) market will determine the best standards.  

Surprisingly, there was no discussion of the need for a robust network (for the Industrial Internet/IoT)  with lightening speed fault isolation and failure recovery.  Something that the public Internet often doesn’t provide.

GE’s Jeff Immelt:  GE believes that the Industrial IoT will accelerate the push towards Big Data.  “Industrial data is not only big, it’s the most critical and complex type of big data,” said Jeff Immelt, GE Chairman and CEO. “Observing, predicting and changing performance is how the Industrial Internet will help airlines, railroads and power plants operate at peak efficiency.”

Note on Future TiECon 2014 articles:   

Two TiECON IoT keynotes will be summarized in future articles are Proximity’s Role in the Internet of Everything (IoE) by Qualcomm and What Really Matters for IoT by IBM.

Introduction:

This is the first in a multi-part article series on TiECon 2014 – the two day annual conference of The Indus Entrepreneurs (TiE).  We summarize the Qualcomm keynote in this blog post and touch on the Internet of Things (IoT) track.  

With 4,200 attendees, this year’s TiECON was the largest of all time.  That’s a testimonial to the superb organization and planning, which produced excellent content on a variety of topics and subject areas that were of interest to technologists, entrepreneurs and private investors.  The top notch technical sessions included: keynotes, panel discussions, lightening rounds with start-ups, and break-through thinker presentations. 

This author has covered TiECon for the last several years along with TiE-Silicon Valley (SV) events of interest to IEEE ComSoc readers.   TiE-SV and IEEE ComSocSCV have had a strategic partnership since 2010.  In Sept 2013, they held a well attended joint workshop – Quantified Self: The next frontier in mobile self-tracking .

Qualcomm CEO Steve Mollenkopf’s Opening Keynote:

The opening TiECon keynote was a fireside chat with Qualcomm CEO Steve Mollenkopf, who was introduced by Anand Chandrasekher,  Sr. Vice President at the same company.  The conversation was moderated by Mohan Gyani -now a private investor, but previously President and CEO of AT&T Wireless Mobility Services.  The format was a Q &A type of “conversation.”

A 20 year Qualcomm veteran, Mr. Mollenkopf provides executive oversight to current and future technology development activities, further strengthening the company’s ability to successfully navigate an increasingly complex and competitive market for wireless infrastructure components and software.  He also serves as a member of Qualcomm’s executive committee, helping to drive Qualcomm’s overall global strategy. 

What is Qualcomm?  “We are a technology company company that invests in core technology that’s needed for big changes in the (IT) industry.  We try to be fairly flexible in the way in which we go to market, always through partners,” he said.   Technology licensing (#1) and chipsets (# 2) are the Qualcomm deliverables which generate revenues and profits for the company.

Here are a few of Mollenkopf important points, observations and opinions:

• Scale is very important when pursuing innovation.  Qualcomm’s scale (of operations and R&D investment) enables the company to pursue new areas of opportunity that smaller companies couldn’t afford to undertake.
• Corporate culture is the most strategic asset.  It gets you through periods of uncertainty.
• Need to preserve a spirit of innovation which includes being nimble (i.e. quick to change direction/iterate) and learning from one’s mistakes.
• Qualcomm tends to focus on a small number of eco-system customers, but the company has a large partner base.
• Qualcomm likes to partner₁ with other companies, because they can’t cover all aspects of the many technologies that are now coming together in the wireless/mobility marketplace.
• Qualcomm wants technology to move forward, rather than stagnate.
• Advice for entrepreneurs: embrace the uncertainty of not knowing what’s next; keep sights high; pay attention to new technologies; innovate; make changes along the way to be successful

1.  Post TiECON quote for clarification:  “We work in a particular space that requires a lot of focus, so we have a very concentrated customer base, but we have an enormous partner base. So our direct customers are really much smaller than a lot of other companies in terms of raw numbers, but we deal with a lot of ecosystem players and we try to be the behind-the-scenes partner for technology.”

Is technological change coming too fast?  “There’s a gap between what people envision and what they can deliver.  There is so much more we can do with (wireless) networks, e.g. a sea of sensors.”

How does the cloud effect Qualcomm?  “For quite some time, (desirable and effective) cloud based services have been needed to be successful in the smart phone business.  The portfolio of cloud services has driven smart phone growth.  Many mobile device components were needed for that: graphics, wireless connectivity/radios, CPU core, multi-media/video, etc.”

What about the future? “Wireless networks will need to be able to move huge amounts of data through networks and this will be a huge opportunity for Qualcomm.  We have to take advantage of that.”  

“Future cloud services will need more wireless bandwidth to and from mobile devices and connected sensors.  At the (wireless) network edge, a decision must be made as to how much data to send back to cloud servers,” Steve added.  Note that this needed intelligence for decision making at the network edge was touched upon in future sessions and is not trivial.

Mollenkopf positioned Qualcomm as a company that “provides technology for (partner) companies to succeed without making a large investment (in wireless infrastructure).  Qualcomm technology scales to a large number of developers.”  And that will produce a huge amount of wireless devices.  “We want to get services enabled on 200M (mobile) devices per quarter,” Steve added.   Summing up Mollenkopf said, “As technology gets integrated into mobile devices there will be more of a need for Qualcomm chip sets.”

Steve said that mid to lower tier smart phones will produce future growth for the smart phone market.  The high end is still growing, but it’s growth rate is not as high as it was. 

Note:  IDC forecasts that high end smartphone growth will be in single digits by 2017, while #1 maker Samsung has lowered its internal smart phone sales forecast for 2014.

Mollenkopf: “Qualcomm is getting the cost structure right for these lower priced smart phones₂.  A lot of the Intellectual Property (IP) for high end smart phones trickles down to the mid and lower end.” 

 2.  Post TiECON quote for clarification:   “We’ve been actually very successful in driving mid-tier and low-tier. Part of our business strategy is to see the transition of 2G networks onto 3G and onto 4G. And part of that is getting the cost structure right. So we’ve been, I think, fairly successful in doing that. If you look at our numbers, I think we’re actually adding customers in that area, which is good. Now if you look at the growth of the high-end segments, relative to what it was let’s say a couple of years ago, the growth rate is not as high and it’s also – it is still growing. And technology tends to be very, very important.”

               Mohan Gyani in conversation with Qualcomm CEO Steve Mollenkopf at TiECON 2014

A huge gap exists between the amount of data people want to get on their mobile devices and what can be delivered (and stored) economically.  Lots of innovation in wireless networks and services will be needed to enable the network to get much of that data moved back and forth (between the network and the device).  Innovation at the business model level will also be important here, Steve said.  Pricing of services and data by network operators is such an example.

Steve stated that the Internet of Things (IoT) was an extension of Qualcomm’s existing business as it requires both mobile connectivity and wireless LANs (e.g. WiFi, Zigbee, etc).  Note that Qualcomm now owns Atheros Communications- a leading WiFi chip maker.

“Qualcomm is building a portfolio of products to enable the Internet of Everything (IoE),” Steve said.  “Scale is very important to deliver on the very large surface area that will exist for the IoE/IoT,” he added.

What about “wearables?”  “Health monitoring and wireless healthcare in general is a great, but different opportunity for Qualcomm.  What’s needed is for the health care industry to fully embrace innovation in the IT industry.  The supply chain for wearables is an opportunity.”

In closing, Mollenkopf said what every entrepreneur is told many times, “We need to make mistakes and (quickly) learn from failures.”

Internet of Things (IoT) Track Overview:

The major IoT trends and the disruptive opportunities which they may create were comprehensively covered during the no-nonsense, commercial free, IoT technical sessions on Friday, May 16th.  We attended the IoT track, because that area has tremendous potential for use of various communications technologies- both wireless and wireline.  It is likely to be adopted by many industry verticals (i.e. market segments).  The areas that will be most impacted by IoT include: startup innovation, consumer value and enjoyment, societal benefit, entrepreneurial companies, established device and network vendors, and network/cloud service providers.  

Note: Cisco and Qualcomm refer to IoT as the Internet of Everything or IoE.

McKinsey Global Institute’s Disruptive Technologies report calls out the Internet of Things (IoT) as a top disruptive technology trend that will have an impact of as much as $6 Trillion on the world economy by 2025 with 50 billion connected devices!   Many are predicting 20 or 25 billion connected devices by 2020. 

For sure, IoT will be a huge market, but not monolithic.  Each vertical industry will have its own opportunities and challenges.   Lack of industry standards, security (business), and privacy (consumer) are the biggest obstacles for IoT to overcome and be successful.  These issues must be resolved for IoT to reach it’s promise and potential.

At Cisco Live annual conference, CEO John Chambers said the Internet of Everything (IoE) has changed the way the world looks at data and technology.  “The simple concept, as you move forward with IoE, is that you have to get the right information at the right time to the right device to the right person to make the right decision. It sounds simple, but it is very, very difficult to do, and is almost impossible to do …….”

The IoT related sessions at TiECON 2014 included the following:

• Road Through the Cloud to the Internet of Things 
• Lightning Round I  (of start-up companies)
• IoT Overview   
• Infrastructure of IoT 
• Connected Things 
• Bridging the old with the new 
• Proximity’s Role in the Internet of Everything
• Lightning Round II   (of start-up companies)
• IoT for the Masses 
• Connected Health Comes Alive
• IoT in Business 
• The Future of IoT 
• The Internet of Things: What Really Matters
• Where are VCs Investing in IoT?   

More information on the TiECON 2014 IoT track is at:  http://tiecon.org/internet-of-things

Time and space constraints necessitates coverage of only a select few of the above IoT sessions.  We’ve picked the one’s that provided new, pertinent information on relevant technologies, markets and barriers to success.  They will be covered in part II, which will be posted in a few days.

In the meantime, please comment in the box below the article to express your preferences and/or opinions.  Log in with your IEEE web account.