GH Rao, who heads engineering and R&D services at HCLTech, has recently returned from the annual Mobile World Congress in Barcelona. He speaks of a presentation by a telecom networking company at the summit about the possibility of a city with no traffic lights, thanks to all the cars enabled with the internet of things (IoT). “All the cars will have sensors and when they sense another car or person close by, they will slow down automatically and have the ability to take decisions in a split second,” says Rao, president, engineering and R&D services, at HCLTech.
HCLTech has developed an IoT-based parking solution for one of its customers in San Francisco. “If you have driven in San Francisco, you know how difficult it is to find parking lots there,” says Rao. HCLTech has ensured that all the customer’s parking lots are IoT-enabled and connected to a smartphone through an app. So once you start looking for a parking slot, not only will the app take you to the closest one, but also change the route map if the slot gets filled before you reach. You can also block your parking slot by paying with your credit card.
Simply put, IoT refers to the concept of connecting devices with each other and connecting them to the internet. This could include anything from your cell phone to your coffee maker to your car. For example, as your phone alarm goes off, it can intimate your coffee maker to start brewing and toaster to get your bread ready and, depending on your schedule, the car can already have the routes programmed before you start.
While conversations about the possibilities around the consumer applications of IoT abound, there is also a huge potential for industrial applications, or industrial IoT, as it is called. In fact, analysts say that business benefits from industrial IoT will be significantly higher, and hence the adoption, though it may take longer, it will be large scale.
“The technology of smart devices will change the business model for several industries and companies and change the way they do business. So, instead of selling, they will be selling outcomes,” says Sukumal Banerjee, senior vice-president, engineering and R&D services, HCLTech. “We can help companies grow their revenues and redefine business processes, especially around management of capital assets,” he adds.
For instance, for a large manufacturing company whose different business units supply heavy equipment to customers, HCLTech has developed an IoT solution to monitor deployment at the customer’s site.
Since different business units sell different parts to the customer, they could also monitor how they were working together. They were able to determine what preventive maintenance was required and what improvements were needed. They are able to get data and respond on a real-time basis.
“Thanks to process automation, some of the machines are already connected to each other. The advantage of getting them IoT-enabled is that you can develop an architecture where they are seamlessly connected and can be monitored, making real-time responses possible,” says Ganesh Ramamoorthy, VP, research, Gartner.
Engineered for a smart future
Gartner, which declared the internet of things to be the most hyped technology in 2014, expects that IoT product and service suppliers will generate incremental revenues of $300 billion by 2020. It also predicts that there will be 4.9 billion connected things in 2015, almost 30% higher than last year, and the figure is likely to reach 25 billion by 2020. The Indian government is working on a plan to create a $15 billion IoT industry having a 5-6% share of the global market and leading to an increase in the number of connected devices from 200 million to 2.7 billion by 2020, according to an IoT policy document. The government’s plan to develop 100 smart cities is likely to generate significant opportunities for companies like HCLTech.
Rao believes HCLTech’s strong base in engineering and R&D services gives it a significant advantage when it comes to seamlessly integrating machines. “There is a huge role of engineering since a lot of the basic infrastructure needs to be created in the form of gateways where you need to connect the devices for them to communicate among themselves even before you connect them to the internet. We help companies move from a chaotic situation to a seamless one,” he says.
For instance, when a leading system integrator in the home automation space wanted to enhance user experience by providing mobile interface and remote access and control, it used HCLTech’s machine-to-machine (M2M) gateway that enables the existing device to transform to a smart device with minimal impact to existing architecture.
HCLTech has one of the biggest practices in engineering services among Indian service providers, with a run rate of over $900 million (16.2% of revenues), nearly 30% higher than TCS, India’s largest IT services company. Infosys, Wipro and Cognizant do not disclose the revenues from this segment. In engineering services, the company is seeing its customers move from projects to a full-service end-to-end outsourcing model, and it bagged five large deals in this space during the last three quarters.
In fact, it sees engineering services as the next engine of growth, much like how the infrastructure management services (IMS) business scaled up for them over the past five years.
“We are extremely bullish in the way we see engineering services play out. We still aren’t at the inflection point, but it is a big market and we will continue to invest and be more aggressive in digitalisation and industrial IoT, and the convergence of different competencies required to serve these two markets,” said Anant Gupta, CEO, HCLTech, during the firm’s last earnings call to investors and analysts.
HCLTech expects IoT and M2M to drive growth in engineering services. There are significant opportunities in IoT, right from integrating all the various sensors to make devices smart to embedded software, and system level design to communication technologies, which is a significant part of its portfolio.
“Engineering services providers have an advantage because they have worked with customers to design and build the machines. So, they have the knowledge of operating technology and IT systems and can include the IoT component while designing new machines, or retrofit old machines to make them IoT-enabled,” says Gartner’s Ramamoorthy.
HCLTech has developed an IoT framework that accelerates the journey towards achieving a connected products-and-services portfolio. The framework standardises the communication to devices and the way data is collected, stored and consumed. One of its customers, a leading provider of medical instruments, wanted to collate and analyse data from its instruments deployed in clinics across geographies.
Recently, HCLTech announced one such partnership with Tele2, a leading European telecom operator, to go after opportunities in the M2M and IoT market in Europe, particularly in healthcare. Plans are on to develop a remote patient monitoring system that can be enabled through smartphones. While HCLTech will be responsible for the implementation, integration, roll-out and support of IoT solutions apart from ensuring device connectivity through its gateway product, Aegies, Tele2 will provide its IoT connectivity platform.
Building a firewall
The internet always comes with security threats and technologies that leverage the internet do leave themselves vulnerable to security threats. “Security is a big challenge and companies will invest in technologies to overcome it, but it needs continuous focus,” says Banerjee.
While hacking into a laptop or phone and the loss of personal data is a threat we are dealing with, hacking into a power or utilities plant, disrupting power or water supply, poses a significant national threat.
Rao believes that while the business benefits will outweigh the security challenges, the question of data ownership is like opening a Pandora’s box — given that so many partners are involved — and the standards to solve that problem will take some time.
Even as new standards for data ownership and security emerge, the business case for IoT adoption is stronger because the cost to make the transition is now more viable. “The technology has been available for some time but from an RoI standpoint, it now makes strong business sense since the cost of sensors has reduced drastically,” says Banerjee. The number of sensors shipped has increased five-fold from 4.2 billion in 2012 to 23.6 billion in 2014, according to a WEF report. As the world moves to an outcome-based economy, industries such as healthcare, oil and gas, utilities, auto, aerospace, equipment manufacturing and retail — where there is pressure to improve efficiency, reduce costs and improve customer satisfaction — are likely to be early adopters.
HCLTech is using its expertise in engineering services and knowledge across verticals to help clients figure out the emerging trend of IoT by partnering with them in building solutions. “While conversations around IoT have begun, I don’t think anyone can actually predict what its true potential, just like in the early days of the internet, no one saw the impact of social media. We are just scratching the surface and there is no doubt about the large-scale adoption of this disruptive technology. It is only a question of when,” says a confident Rao, ready to ride the wave when it does happen.