Step by step toward the Internet of Things

Everyone’s talking about machine to machine (M2M), the Internet of Things (IoT) and Industry 4.0. But is it all just hype, or is it really the fourth industrial revolution? Ralf Nejedl, Senior Vice President of B2B & ICT at Deutsche Telekom AG and responsible for Deutsche Telekom’s M2M business in Europe, knows how things really stand with M2M, IoT and Industry 4.0.

Ralf, M2M, IoT and Industry 4.0 are often mentioned in the same breath in the media. What exactly do the terms have in common and how do they differ?
The terms are sometimes used to mean the same thing in public discussion. By M2M we understand the automated exchange of information between devices such as machinery, vending machines, vehicles or containers. In the “Internet of Things”, this exchange of information is complemented by the computing power integrated in the “things.” Industry 4.0 describes the digitization of production technology. The goal is the “smart factory” that uses resources more efficiently and also integrates customers and business partners in production and the value creation process.

There’s a lot of hype about Industry 4.0, M2M and IoT at the moment. Why?
Decision-makers have now realized the potential harbored by these concepts. Managers know that costs can be cut and new business models developed with M2M. M2M has now arrived in all layers of business, politics and society and has huge future potential. A study by Cisco comes to the conclusion that the Internet of Things will create additional value added of 19 trillion dollars worldwide by 2020.

M2M and IoT are sometimes referred to as the fourth industrial revolution. Do you think that’s an exaggeration or is the label perfectly justified?
I don’t think it’s over the top. M2M and IoT really do have the potential to bring about radical change on a large scale. According to Cisco, 99 percent of the things that can be networked are not yet connected with each other.

That means enormous potential is lying untapped. If all these devices are interconnected and then also equipped with their own computer intelligence, the possibilities are almost unlimited. Production and the associated service processes can be completely redesigned and made more efficient.

What obstacles are there to the use and penetration of M2M and IoT solutions?
One very big obstacle is that many think in way too large dimensions in relation to M2M and IoT. Decision-makers often assume that these technology concepts necessitate reengineering of a company’s entire processes.

That’s a fallacy. The opposite’s true: It’s advisable to proceed step by step with M2M and IoT. Define a self-contained process for which an M2M/IoT solution is to be used. Define a specific objective the solution is to achieve for the company. Launch a pilot and learn from it. And plan and conduct the rollout leveraging the experience gained from the pilot.

What are the most important criteria for using M2M profitably? What cardinal errors is it best to avoid?
A company shouldn’t touch everything at once. Networking as many devices as possible with each other and equipping them with complex sensor technology reaps little benefit. A system like that generates a lot of data, but to what purpose? There’s the risk that a company can no longer see the wood for the trees.

M2M and IoT projects are more successful if they’re given top-level priority. That’s because such projects, even if they relate only to an isolated process, nevertheless influence many other areas of business. In addition, it’s necessary to start by defining the area for which IoT or M2M is used and formulate objectives.

What are the most interesting sectors and industries for M2M and IoT at the moment?
IoT and M2M can be used profitably in all sectors. Some areas of the economy are already well advanced in applying these technology concepts. That’s true of the transportation and logistics industry, for example, which was very quick to address the issue of telematics applications for increasing efficiency.

Healthcare is a further sector in which M2M and IoT have already been introduced. For example, Deutsche Telekom’s subsidiary in Greece, OTE, has implemented a solution for a hospital there that has helped it improve asset management. The application supplies precise data on what equipment is available at which hospital. That means the hospital’s operators can use their existing equipment more efficiently. Thanks to this solution, no medical device is left neglected in a storeroom to gather dust.

Smart city is a further area in which M2M and IoT package solutions have huge potential. So too is the automotive sector, which plays a key role in Germany in particular. However, as I said, the early adopters are from transportation and logistics.

What does Deutsche Telekom’s M2M portfolio look like and in which direction will it be further developed?
Deutsche Telekom’s offering caters very well for the needs of the three above-mentioned sectors. However, the solutions we offer can be used in all sectors. You can divide our portfolio into three stages. In the first stage, we deliver connectivity, in other words, the foundation for M2M and IoT.

In the second, we provide a management platform. It enables you to manage connectivity. Just to give you an example: If a car manufacturer wants to network its products, it will not activate each individual SIM card separately for a car. Instead, it will want to activate a large number of SIM cards – a thousand, say – at once.

In the third stage, we provide customers with a complete solution that delivers the benefits to them. One example of that is the “networked combine harvester” implemented by Deutsche Telekom together with the manufacturer Claas. Thanks to this solution, the combine harvester “knows” when its grain tank is full, for example, and then automatically calls a tractor with a trailer. The whole application makes the logistics chain at the field more efficient and so more cost-effective.

We also offer the solutions from the third stage – especially those for SMEs – together with partners. They often have better knowledge of the problems and needs of the individual sectors and, along with us, can offer creative and innovative solution concepts.