The future of IIoT: Smart city, utility and telecom ...€¦ · telecom convergence OCTOBER 2016. ETRE REPRT 2 4+81+1010+38+6++483 Executive Summary This report provides a 360-degree

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The future of IIoT: Smart city, utility and telecom convergence

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Executive Summary This report provides a 360-degree view of the 5G, Industrial In-

ternet of Things (IIoT), and smart city ecosystem. To build this

report, we completed an online survey comprised of partici-

pants from what we consider to be the three main stakehold-

ers, utilities (n=80), telecom (n=106), and government (n=30).

Respondent demographics include:

• Telecommunications representatives made up 48% of the

survey respondents, while utilities and government repre-

sentatives made up 38% and 14%, respectively. (Figure 1)

• Approximately 81% of all respondents’ organization head-

quarters were located in North America. The remainders

were located in Central or South America (10%), EMEA

(6%), and APAC (3%). (Figure 1)

• Individuals who represented organizations with an annual

revenue of $1 billion or more made up approximately 35%

of the survey participants.

• Approximately 36% of survey respondents held a job

responsibility at the director level or above.

The Smart City Ecosystem• 5G, or 5th generation networks, are the next generation

of communications technology that will enable connected

devices to communicate faster, with more flexibility and

programmability, while simultaneously using fewer resourc-

es than ever before.

• The industrial devices of the future—autonomous vehicles,

smart meters, electronic shelf labels, smart grids and oth-

er connected assets and devices—comprise what is known

as the Industrial Internet of Things (IIoT). These types of

assets rely on an unparalleled level of machine-to-machine

communication and connectivity that take real-time data

analysis and processing capabilities to the next level.

• Smart cities will enable us to unify 5G, IIoT, and other

key technologies. They offer interoperability for devices,

increased functionality, efficiency, and a seamless experi-

ence, all while maintaining security and safety for citizens

and industry.

Figure 1: Survey Demographics

Telecommunications48%

North America81%

State or Federal Gov. 4%

APAC 3%

Local or Municipal Gov. 10% Central or

South America 10%

Utility38%

EMEA6%


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• Connectivity technology (41%), technology (e.g. battery

life, cost) (33%), and standards (33%), are the top three

areas holding back deployment of 5G and the IIoT.

Recommendations Formulate a clear political agenda. A project implementing new

technologies requires clear political will and strong support from

both local government and city administration. Cities, utilities

and telecom providers need to find ways to make it easier to

deploy innovative approaches for smart city communications.

Create special smart city consortiums. Create a specific

decision-making entity of government officials, transport and

utility providers, key decision makers, and thought leaders to

help drive change.

Bundle responsibilities. Smart-city projects require involvement

from numerous departments of the city administration, local

companies, and organizations. Cities need to help solution

providers by mapping these partnerships, defining roles and

responsibilities, and serving as central points of access for

negotiation and information.

Engage citizens and local businesses. Smart cities projects

should include citizens, business, and academia to help form a vi-

sion of how cities will benefit from smart city solutions. Relevant

departments and regulators should commit to this vision and

deployment roadmap. This would give clarity on what is expected

and help address the current fragmentation of the market.

Focus on trials. Large-scale trials of whole systems should be

implemented, with a focus on business models and deployment,

rather than just technology. The tipping point can be the first

application, and organizations should focus on the business

value of the application and ensure that the infrastructure put

in is justified as the easiest way of launching that application.

One project can justify infrastructure that can then help with

launching future projects more easily.

Design for flexibility. Organizations should consider how their

technology investments can adapt for the future and evolving

use cases.

Trends • The survey revealed that 96% of utility respondents agree

that smart cities are an important tech trend, and 87%

believe smart cities are critical to their organization’s

future success. Although they still agreed, these metrics

were lower for government and telecom representatives.

• Overall, both government and telecom respondents

agreed that 5G and IIoT are overhyped, but utility

respondents did not.

• 93% of the government respondents and 75% of utility

respondents said their organization is already working on

smart cities in some way.

• Government organizations appear to be focusing their cur-

rent efforts primarily on EV charging infrastructure (29%),

micro or nanogrids (22%), and renewable and distributed

energy resources (20%).

• Utilities are focused on developing renewable energy

(70%), including both large and small scale generation

distributed and renewable energy; building distributed

energy resources (61%), like battery storage and rooftop

solar; and smart grids (55%).

• On a scale of 1- 5—where 1 = no role and 5 = a significant

role—respondents ranked wired communication the high-

est (4.0/5.0), followed by wireless sensors (3.9/5.0), and

5G (3.8/5.0) as key components for smart city efforts.

• Survey respondents feel that government entities, at both

the state (50%) and municipal (48%) level, and technolo-

gy providers (47%), will play the largest roles in making

smart cities a reality.

• Technology providers and telecommunication providers are

the top two groups needed to make 5G and IIoT a reality.

• Utilities (46%) selected ensuring future energy demand

is met as the top smart city benefit; government officials

(46%) selected increased asset life as the top smart city

benefit; while telecommunications providers (42%) select-

ed safety/surveillance as the top smart city benefit.

• Looking at the impacts of 5G and IIoT, healthcare (42%),

smart cities (42%), connected homes (38%), and smart

buildings (38%), are the verticals destined for disruption.


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Introduction

Networked devices are at the heart

of building smarter cities. Connecting

a smart phone to the Internet is one

thing, but connecting an industrial

asset—like a transformer or a stop

light—is another. The Industrial In-

ternet of Things (IIoT) and the con-

nection among industrial devices are

critical to making smart cities a real-

ity, but connecting industrial assets

is complex when dealing with mul-

tiple industries, standards, protocols

and interests. It takes more than the

convergence of technologies; it takes

the convergence of many stakehold-

ers, including telecommunications,

utilities, government, and technolo-

gy providers. This research provides

a 360-degree view of this ecosystem,

and addresses:

• The future of IIoT and smart cit-

ies—what does it look like?

• What are communities doing to-

day with their IIoT and smart

city efforts?

• Explore next-generation IIoT

technologies, particularly 5G

• Who are the key stakeholders

needed to make IIoT a reality for

building smarter cities?

• What are some of the challenges

and opportunities of bringing

these stakeholders together?

• What sectors may be disrupted by

emerging technologies?

Smart cities, IIoT, and 5G…Their

Definitions and Relationships

Today cities across the United

States are witnessing astonishing

population growth. By 2050, the

Organisation for Economic Co-op-

eration and Development (OECD)

estimates that 70% of the world’s

population will live in an urban

environment. With the massive

influx of people, comes a host of

new challenges which include the

need to:

• Rethink energy consumption

• Bolster wireless and wired

connectivity

• Enhance public safety

• Improve healthcare

• Increase operational efficiency

• More effectively manage our re-

sources to promote sustainability

and savings

Solutions to many of these chal-

lenges are underway today, but smart

cities will enable us to unify them to

form a cohesive and dynamic envi-

ronment. Smart cities offer interop-

erability, increased functionality,

and a seamless experience, all while

maintaining security and safety for

citizens and industry.

Smart cities Are All About Leveraging the

Right Connections

A recent report by Cisco and DHL

announced that there will be more

than 50 billion connected devices by

2020. The proliferation of connected

devices will give way to a myriad

of new choices and opportunities

for manufacturing, transportation,

healthcare, utilities, retail, security,

and just about every other industry.

The industrial devices of the future—

autonomous vehicles, smart meters,

electronic shelf labels, smart grids

and other connected assets—com-

prise what is known as the Industrial

Internet of Things (IIoT).

These types of assets rely on an

unparalleled level of machine-to-ma-

chine communication and connec-

tivity that take real-time data pro-

cessing and analysis capabilities to

the next level. IIoT technologies will

require not only high speeds for data

delivery, but also low latency among

connected devices. Combined, low

latency and high transfer rates will

ensure higher levels of reliability

and accuracy through reduced delay

among the sending and receiving

ends of connections.

A key enabler of IIoT technologies

will be 5G, or 5th generation com-

munications network technology,


5

which is a ubiquitous solution to

enable business and connected de-

vices to communicate faster, while

simultaneously utilizing less power

and fewer resources than ever be-

fore. Carriers suggest that by 2020, 5G

technology will offer speeds that are

10 to 100 times faster than current 4G

technologies. With speeds that fast,

an entire movie can be downloaded in

a fraction of a second, or divert an au-

tonomous vehicle from a life threat-

ening scenario in a split second. The

immense capacity of the 5G network

will enable it to take on a multitude

of roles that were once too burden-

some for its slower predecessors.

The vision of smart city develop-

ment is to install innovative and

converging technologies such as 5G

and IIoT to create an ecosystem that

will improve our overall day-to-day

experience, and ultimately provide

tangible value to industries and con-

sumers. Below are several key areas

that will generate the most value to

industry through the convergence

of IIoT and 5G in the development of

smart cities:

Track-and-Trace Devices. Busi-

ness asset management involves

tracking a multitude of objects

during day-to-day operations. IIoT

enables objects to be managed more

efficiently through track-and-trace

devices, yielding the object’s location

in high precision at any given time.

For example, a logistics company

might utilize track-and-trace devices

on their shipping containers to en-

sure proper transportation and han-

dling. IIoT will increase efficiency

and transparency between business-

es and their customers.

Predictive Analytics. IIoT opens

a window of opportunity to gain crit-

ical insight into the probability of

events to occur in the future. Asset

health management can save time

and money utilizing for example,

sensors on an electrical transformer

that may track various metrics about

the device’s current state (e.g. tem-

perature, voltages, currents). This is

useful data that organizations can

analyze to predict when the device is

likely to breakdown.

Network Virtualization. When

linking multiple smart city elements

together—including both civilian

applications and IIoT—at some point

there will inherently be a need to

adapt and make changes to models,

data flows, decision making and other

factors that make a smart city func-

tion. 5G deployments will operate on

virtual networks that decouple infra-

structure from digital logic such that

a carrier can remotely reprogram and

control the network’s characteristics

and the functionality on demand. A

prime demonstration of the value of

virtual networks is to solve the den-

sity issue that results when too many

devices attempt to connect to a single

cellular network in one area during

large events. Rather than physically

replacing or adding infrastructure to

meet new needs, virtual networks can

be programmed to reallocate network

space and make room for additional

connected devices.

Behavioral Tracking. Usage be-

havior tracking utilizes the connect-

edness of IIoT to store vast amounts

of data and subsequently perform

an analysis of the data to identify

trends in the usage or consumption of

a product or service. Take for exam-

ple the analysis of data from a smart

grid, which could yield valuable in-

formation about customers with high

energy usage. When complemented

by an integrated customer service

platform, the system could automati-

cally issue notifications to customers

about targeted energy efficiency pro-

grams that might help reduce their

high energy bills.

Heterogeneous Networks (Het-

Net). An important distinction be-

tween 5G and networks like LTE,


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CDMA, or GSM, is that 5G is not a sin-

gle network but the next generation

of networks—it is actually a flexible

and ubiquitous network of multiple

networks. 5G will include tens if not

hundreds of networks like Sigfox,

LoRa, WiFi, or LiFI that our devices

will nimbly navigate between based

on location and network strength. Ul-

timately, the HetNet will provide us-

ers with the flexibility and enhanced

autonomy that will be required to

support IIoT.

Network Slicing. You can envision

5G networks like data highways. In

the left lane, critical information,

such as an autonomous vehicle’s lo-

cational data, travels at high speeds

over an extremely reliable connec-

tion to stop the car before a fatal ac-

cident. In the far right lane, less crit-

ical Fitbit sleep cycle data is slowly

streamed to your computer from the

night before. Somewhere in between

the outer most lanes are where the

rest of your data—like your emails,

phone calls, text messages, surveil-

lance footage, smart meter data, and

other data types—travel at various

speeds across the net. The advan-

tage of 5G networks is that in real

time, data is sliced and sorted into

its appropriate lane with the flexi-

bility to switch lanes or networks as

needed to become more efficient at

transmitting data.

Why Get Connected?

Connecting to the internet enables

IIoT devices to be accessed through

supporting applications from virtual-

ly any device, any location, and at any

time. This enables operators to check

in on their devices in full detail. In

addition, an internet connection pro-

vides the device with real-time data

regarding its location, environment,

and just about anything else you

could think of.

Smart cities Connect More

than Technology

Technology can only take us so far.

To better understand the roles of 5G

and IIoT in the future of smart cities,

we need to understand the organi-

zations that must come together to

bring smart-city concepts to fruition.

Often the conversations around smart

cities center around municipal gov-

ernments, but we’ve found that other

groups need to be considered as well.

In this paper we address telecommu-

nications providers and utilities, as

they will provide much of the foun-

dational communications for smart

cities through IIoT, 5G and smart grid

communications networks. Zpryme

conducted an online survey for these

groups and received feedback from

219 respondents:

• Federal, state and local govern-

ment (n=30)

• Utilities (n=83)

• Telecommunications providers

(n=106)

Government Representatives

Effective governance is a prerequi-

site for the development of smart cit-

ies. In a broad sense governments set

the stage for smart cities by creating

long-term goals with clear objectives

that embrace innovation and pro-

mote sustainability for their commu-

nities. But urban challenges are com-

plex. Government plays a critical role

as a coordinator, founder, and regula-

tor for smart city development. They

bring different stakeholders and

interests together, cultivate a single

platform for collaboration, provide

funding, and ensure that common

standards are met.

Our online survey was completed

by 22 local or municipal government

officials and eight state or federal

government representatives. (Figure

2) These individuals were primarily

located in North America. (Figure 3)

This surveyed group was comprised

of 53% managers or professional staff


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and 27% at the director level or above.

(Figure 4) Over half of our respon-

dents worked for a government that

had $500 million or more in annual

revenue. (Figure 5)

Utility Representatives

Utilities and cities are changing in

similar ways; they are quickly moving

from centralized top-down structures

to distributed horizontal structures,

and with that comes the opportunity

for collaboration. In many ways, the

goals of the utilities and governments

overlap. Utilities are more prevalent-

ly refining their role and adopting

Government Demographics by the Numbers

Figure 2: Organization Type

Figure 4: Functional Area of Expertise Figure 5: Organization Annual Revenue

Figure 3: Headquarters Location

Local or Municipal

73%

North America 73%

State orFederal 27% Central or

South America17%

Under $100M 20%

$1B+ 20%

$500M - $999M 33%

EMEA 10%

100M - $499M 27%

ProfessionalStaff 23%

IT/Software 10%

Executive 10%

Other7%

Administrative 3%

Director17%

Manager30%


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new models that focus on upgrading

infrastructure and promoting energy

efficiency, rather than building new

generation. By doing so, they are es-

sentially laying the foundations that

will enable smart cities to flourish.

We had 83 survey participants from

the utilities sector, and most for a

North American organization (87%).

(Figure 6) In terms of size, nearly

half of utility respondents worked

for an organization with an annual

revenue of $1 billion or more. (Figure

7) We had a good mix of job levels

with 70% of our utility respondents

in the realm of managers or profes-

sional staff, and 22% at the director

level or above. (Figure 8)

Utility Demographics by the Numbers

$1B+ 44%

$500M - $999M 26%

$100M - $499M 19%

Under $100M

11%


North America 87%

Central or South America 5%

EMEA 3% APAC 5%

Figure 8: Functional Area of Expertise


Manager 34%

Director 16%

IT/Software

7%

Executive 6%Other 1%

Figure 7: Organization Annual Revenue

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Telecommunication Providers

Communication among connected

devices—including machine-to-ma-

chine and machine-to-human—is the

most valuable and inherently critical

piece of developing smart cities. It is

the role of the telecommunications

providers to facilitate this connection,

making it possible to share data seam-

lessly and efficiently.

Telecommunications providers

made up the largest responding group

of our survey with 106 participants.

Of these 106 individuals, 83% worked

for an organization based in North

America. (Figure 9) A little over half

of these organizations grossed $100

million to $999 million in annual reve-

nue, while 32% generated $ 1 billion or

more. (Figure 10) Approximately 58%

of our telecom provider survey partic-

ipants held a manager or professional

staff role, and 27% held the title direc-

tor or above. (Figure11)

Telecommunication Providers by the Numbers


Figure 11: Functional Area of Expertise


Manager 30%

Director 16%

IT/Software

15%

Administrative 3%

Executive 4%

Other 4%

Figure 10: Organization Annual Revenue

North America 83%

Central or South America

9%

EMEA 6%APAC 2%

$1B+ 32%

$500M - $999M 28%

$100M - $499M 29%

Under $100M

11%


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STUDY ANALYSIS

Key Stakeholder Views of Technology

With all of the discussion around

smart cities, 5G and IIoT, we were

excited to see how our key study

groups viewed the overall progress

towards smarter and more connected

communities. We queried our survey

participants about the benefits of

smart cities, their views of the tech-

nology, and about how critical these

concepts are to future success.

Smart City Benefits

There are many hot areas for smart

city technology, and certainly many

verticals will see positive impacts

as they undergo digitalization. We

asked our survey participants to

rank what they thought to be the top

smart city benefits. Although there

are many areas where the three ma-

jor stakeholder’s goals align, there

are certainly areas where they don’t.

The three groups will inherently

realize different benefits based on

their goals and use cases so it comes

as no surprise that each sector had a

different top benefit.

Utilities selected ensuring future

energy demand is met (46%) as the

top smart city benefit. With growing

environmental concerns, the poten-

tial for a carbon tax, an increase in

the number of prosumers, and aging

physical infrastructure, smart cities

will give utilities a breath of fresh air

and ultimately enable them to con-

tinue to maintain safe and reliable

power for generations to come. Also

concerned with aging infrastructure,

government officials (46%) selected

increased asset life as the top smart

city benefit, while telecommunica-

tions providers (42%) selected safety/

surveillance as the top smart city

benefit. (Figure 12) By combining

a variety of sources, smart cities

Figure 12: Top Smart City Benefits

Ensuring Future Energy Demand is Met

Increased Asset Life

Analytics-based Decision Making

Safety/Surveillance

Improved Visibility and Control

Citizen Choice & Engagement

23% 46% 32%

24% 28% 46%

19% 35% 36%

42% 18% 25%

31% 17% 32%

26% 20%14%

Note: Percent of respondents placing a benefit in their top three benefits

0% 13% 25% 38%

Telecom

Utilities

Government


11

offer powerful analytics tools that

can digest large sets of information

and provide key insights to improve

public safety while simultaneously

tackling crime.

The Importance of Smart cities

Approximately 96% of utility re-

spondents agree that smart cities

are an important tech trend, and 87%

believe smart cities are critical to

their organization’s future success.

However, only 66% of telecom provid-

ers agree that smart cities are an im-

portant tech trend and 85% agree that

smart cities are critical to their orga-

nization’s future success. (Figure 13)

These metrics appeared lower for gov-

ernment representatives, as only 64%

of the respondents agree smart cities

are an important tech trend and 76%

agree that it is critical to their organi-

zation’s future success. (Figure 13)

These numbers indicate that util-

ities recognize the importance of

smart city efforts, but that there is

some dissonance of opinion among

telecom and government. It is some-

what surprising that utilities would

receive smart cities more positively

than telecom providers, given that

smart cities can unlock huge oppor-

tunities to deliver massive commu-

nication networks. Since 18% of gov-

ernment officials and 16% of telecom

representatives neither agreed nor

disagreed that smart cities are criti-

cal to their organization’s future suc-

cess, it could be that they simply have

not decided the importance of smart

cities or possibly they haven’t bought

into the vision yet.

At the same time, there is clearly sig-

nificant excitement around smart cit-

ies at the moment, and things are just

heating up. Results from our survey

show that utility respondents are split

nearly 50/50 (49%) on whether smart

cities have been overhyped, while

84% of government officials agree

that smart cities are an overhyped

concept, and about 64% of telecom of-

ficials agree about the hype. (Figure

14) Although most of the large play-

ers in the industry realize the value

of smart cities and have already set

up smart city-focused teams, many of

our respondents fall into a group that

is familiar with the rollout speed of

technology, up and down cycles, and

Figure 13: Respondents that Agree with the Importance of Smart Cities

Smart cities are an important technology trend

Smart cities are critical to my organization’s future success

Utilities

Telecom

Gov.

0% 25% 50% 75% 100%

96%

87%

66%

85%

64%

76%

Figure 14: YES, Smart Cities are Overhyped!

Gov. Telecom Utilities

90%

68%

45%

23%

0%

84%

64%

49%


12

deployment of these projects, not

deploying the projects themselves.

Current Smart City Efforts

Even though they have their

doubts, our survey results show that

93% of government respondents said

system capabilities that lead them to

take a more conservative view.

The Importance of 5G and IIoT

While most of our respondents

agreed that 5G and IIoT are import-

ant tech trends, they are clearly

buzzwords that have created a lot of

hype in the industry. Interestingly,

the majority of both government and

telecom respondents believe that 5G

and the IIoT are overhyped (Figure

15), but utilities do not. It may be that

utilities are already using these tech-

nologies and have been able to realize

their value more easily.

One use case that has been ad-

dressed by many utilities is capturing

unknown system losses through in-

stalling new sensor devices, a prime

example of the benefits of IIoT. In

fact, 95% of utility respondents feel

that the IIoT is critical to smart cities’

future success. (Figure 16) Telecom

providers and government respon-

dents also agree that 5G and IIoT are

critical pieces of developing smart

cities, but to a lesser degree than util-

ity respondents; which again displays

conservative views on the behalf of

telecom and government respondents.

Smart City Deployment

We’ve covered how our respon-

dents are embracing these topics

and what drives them to invest;

now let’s explore their deployment

stage for government organiza-

tions and utilities. We did not ask

telecom carriers about their smart

city deployment because they

would primarily be supporting the

Figure 16: Respondents that Agree about the Importance of Technology

Figure 15: Respondents that Agree about the Overhype of 5G and IIoT

0%

0%

25%

25%

50%

50%

75%

75%

100%

100%

95%

91%

80%

80%

74%

76%

50%

39%

56%

61%

83%

80%

IIoT is an overhyped concept5G is an overhyped concept

IIoT is critical to smart cities’ future success5G is critical to smart cities’ future success

Utilities

Utilities

Telecom

Telecom

Gov.

Gov.


13

25+25+22+21+7 37+25+22+11+4+1

their organization is already working

on smart cities in some way. Howev-

er, where they are exactly with their

deployments shows high levels of

variability. (Figure 17) Many are still

in the early stages of planning, inves-

tigation or approving budgets, while

some are deploying pilots or even

multiple applications simultaneously.

On the utility side, smart city efforts

appear to be spread out across the ear-

ly stages. (Figure 18) We see the largest

number of organizations (37%) still in

the planning or investigatory stages,

and some deploying projects (22%),

while 25% say they have no plans. We

consider smart grid technologies to be

a part of broader smart city efforts,

but have found that many utilities do

not view their smart grid efforts as

contributing to a smart city directly. If

utilities included smart grid as smart

city technologies, we’d expect the

number who selected no plans to be

much lower. Smart city technologies

are underway at utilities, but many

do not view smart grid technologies

through the smart city lens.

Status of Smart cities Initiatives

So it seems that there are some

organizations moving forward

with smart cities initiatives, but

we haven’t talked specifics yet as

to what exactly they’re working on.

Government organizations appear

to be focusing their current efforts

primarily on:

• EV charging infrastructure (29%)

• Micro or nanogrids (22%)

• Renewable and distributed energy

resources (20%)

Over the next three years the top

Figure 18: Smart City Deployment - Utilities

Figure 17: Smart City Deployment - Government

Deploying Multiple

Applications21%

PilotDeployment

25%

Planning/Investigatory

Stage25%

NoPlans7%

Approving Budgets

22%(Large Scale

Deployment 0%)

Deploying Multiple

Applications11%

No Plans25%

Planning/Investigatory

Stage37%

PilotDeployment

22%

Approving Budgets1%

Large Scale Deployment 4%


14

ranking efforts will be safe city ini-

tiatives (46%), and distributed en-

ergy resources (40%). Figure 19 pro-

vides more details about government

organization’s plans, and which tech-

nologies are moving forward.

Currently, utilities’ smart cities ef-

forts are most focused on:

• Developing renewable energy

(70%), including both large and

small scale generation distribut-

ed and renewable energy

• Building distributed energy re-

sources (61%), like battery storage

and rooftop solar

• Deploying smart grids (55%)

which include the aforemen-

tioned items plus data analytics

and communications

It should also be noted that util-

ities are highly active in the inte-

gration of EVs and data analytics

(47%). On the three-year horizon,

utilities will still be focused on data,

including data analytics (34%), and

open data and transparency (33%).

(Figure 20)

Figure 19: Government Organizations’ Future Smart City Plans

Figure 20: Utilities’ Future Smart City Plans

EV charging infrastructure

Renewable energy

Microgrids/nanogrids

Distributed energy resources

Smart grid (electric)

Smart street lights

Electric vehicles (EV)

Open data and transparency

Fiber to the home

Smart transportation

29% 17% 25% 29%

20% 28% 20% 32%

61% 17% 13% 8%

22% 39% 22% 17%

55% 17% 22% 5%

20% 40% 12% 28%

47% 18% 13% 21%

17% 13% 8% 63%

47% 34% 15% 4%

15% 19% 23% 42%

13% 13% 29% 46%

31% 33% 15% 21%

13% 42% 29% 17%

27% 32% 15% 27%

8% 20% 48% 24%

27% 22% 15% 37%

8% 25% 46% 21%

23% 27% 22% 28%

Renewable energy

Distributed energy resources

Smart grid (electric)

Electric vehicles (EV)

Data analytics

EV charging infrastructure

Open data and transparency

Microgrids/nanogrids

E-government initiatives

Sustainability plan (preferably regional level)

11% 8%70% 12%

47% 27% 13% 13%

Underway Next 3 years 3+ years No plans

Underway Next 3 years 3+ years No plans


15

Roles of Technology

Connecting more than 50 billion

devices by 2020 will be no small feat

for technology developers, although

there seems to be a multitude of dif-

ferent technologies that will lend a

hand in making smart cities a reality.

Advanced communication networks

like 4G and 5G, sensor technology—

both wired and wireless—and smart

connected assets that make up IIoT

are certainly the essential parts. We

asked our survey participants to rank

the roles essential smart city tech-

nologies on a scale of 1 – 5, where 1

represents no role and 5 means a sig-

nificant role. Figure 21 shows how our

survey participants responded for

the three-year horizon.

It is clear that wireless technology

will be a major part of smart cities,

but our survey respondents actually

ranked the role of wired communi-

cation networks in the next three

years with the highest overall score

of 4.0 out of 5.0. Historically, hard-

wired networks have offered more

security, higher speeds, and im-

proved dependability than wireless

networks, and we don’t see them go-

ing away anytime in the foreseeable

future. Aside from the aforemen-

tioned benefits of wired technology

having the greatest utility for big

businesses, wired technology like

fiber is also expected to serve as the

backbone for 5G wireless transmis-

sion for the consumer.

Sensor technologies like smart

streetlights, smart meters, wear-

ables, track and trace sensors and

other devices, both wired and wire-

less, are central to the functionality

of smart cities. Our respondents felt

that wireless sensors will play the

larger role in the development of

smart cities and gave them the sec-

ond highest rating overall, 3.9 out

of 5.0. While it seems that wireless

technologies are a key enabler for

smart cities, our respondents still

feel that wired sensors will play

some roll too, giving them a rating

of 3.2 out of 5.0.

Each generation of network tech-

nology offers substantial benefits

over its predecessors including

speed, bandwidth, intelligence,

and programmability. Look for 5G

and generations beyond to cover

the advanced needs of smart city

applications and IIoT devices. Our

respondents indicated that 5G and

4G will play a similar role for smart

cities in the three-year horizon

giving them ratings of 3.8 and 3.7,

respectively. Although we see 5G

development underway today, it is

important to note that 3G still has

about 10 years of remaining shelf

life and 4G will probably be around

for another 20 years.

Figure 21: Roles of Technology in Smart City Developments

1No Role

5Significant

Role

432

Wired Communication

Networks

WirelessSensors

5G

4G

IIoT

Wired Sensors

4.0

3.9

3.8

3.7

3.7

3.2


16

Roles of organizations

We’ve looked at what organizations

are doing with technology today and

the various roles that technologies

will play in the future; the last part

completes the puzzle by piecing to-

gether the roles of the organizations

that will be involved in these technol-

ogies going forward. Here we ask our

survey participants from the three

key stakeholders, telecommunica-

tions, utilities, and governments to

select all of the organizations that are

critical to the future of smart cities,

5G and IIoT.

Smart cities

Looking at how our survey partici-

pants responded about smart cities,

(Figure 22) many feel that govern-

ment organizations—at both the state

and municipal level—will play the

largest role in making smart cities a

reality. Government organizations

are certainly foundational to smart

city development because they are

creating incentives for new projects,

developing standardization, and driv-

ing the industry forward through leg-

islative and even regulatory require-

ments. After government entities,

47% of respondents selected tech-

nology providers as part of the most

critical organizations needed to make

smart cities a reality, which reflects

the disparity between the technology

needs of tomorrow’s applications and

today’s existing solutions.

5G and IIoT

Looking specifically at 5G and IIoT

we see that respondents’ views are on

trend with smart cities and the need

for further development of technol-

ogy. Technology providers ranked

in the top two most critical interest

Figure 22: Organizations Critical to Make Smart Cities a Reality

State Government

Municipalities TechnologyProviders

Telecom- munications

Providers

Utilities

48%

47%

44%44%

50%

48%

46%

44%

42%

50%


17

providers are responsible for facili-

tating the machine-to-machine and

machine-to-human connections criti-

cal to the functionality of IIoT.

Universities and research groups are

also common to both IIoT and 5G as a

critical group to making these tech-

nologies a reality. Universities and re-

search groups provide supplementary

development that can take a deep dive

into the specifics of these technolo-

gies and help to carve out new oppor-

tunities and applications.

Disruption Potential of IIoT and 5G

To get a better idea of which verti-

cals will see the biggest impacts from

the emergence of new IIoT and 5G

technologies, our survey asked tele-

com professionals what they thought

would see the largest disruption.

groups (Figure 23) in the develop-

ment for both 5G and IIoT with 48%

and 51%, respectively. Technology

providers like Cisco, Dell, and Am-

azon are paving the way for 5G and

IIoT, with applications like back-end

storage and analytics platforms to

manage IIoT data, and real-time data

streaming to enable things like au-

tonomous vehicles, but they still have

a long way to go.

It comes as no surprise that respon-

dents (66%) indicated that telecom-

munications providers will play the

leading role in making 5G a reality,

but their role in IIoT is important as

well. Approximately 43% of our re-

spondents indicated that telecommu-

nications providers will be critical in

making IIoT a reality. As we’ve men-

tioned before, telecommunications

Healthcare (42%) and smart cities

(42%) were tied as the top two indus-

try verticals destined for disruption,

followed by connected homes (38%)

and smart buildings (38%). (Figure 24)

When we look at the array of ap-

plications for IIoT and 5G, the key

element for the healthcare industry

is really offering increased flexibly

with patient monitoring. Whether

it is monitoring glucose levels in the

blood, fetal monitors, electrocardio-

grams, or temperature monitors, the

ability to collect and track patient

healthcare information is vital to pa-

tient treatment. While the futuristic

vision of a city that looks like some-

thing out of the classic TV show, The

Jetsons, isn’t quite a reality yet, we

are seeing disruption in this vertical

that puts IIoT and 5G at the epicenter.

Figure 23: Organizations Critical to Make 5G and IIoT a Reality

5G IIoT

Federal Government

State Government

RegulatoryAgencies

UtilitiesTechnologyProviders

TechnologyProviders


Providers


Providers

Universitiesand Research

Universitiesand Research

48%

37%32% 32%

32%37%38%

43%

51%66%

70%

53%

35%

18%

0%

55%

53%

28%

18%

0%

Note: Percent of all respondents that selected a particular group

Featured CompaniesF E A T U R E R E P O R T

18

When you consider all of the vari-

ous equipment and devices found in

homes and buildings— HVAC, lighting,

security, lifts, AV, communications,

parking, utility meters, vending ma-

chines, energy management, water

management, landscaping/irriga-

tion—connected homes and buildings

have massive potential to see disrup-

tion in the next 10 years. Our survey

results (Figure 24) show that respon-

dents feel that there are actually sev-

eral other verticals that will experi-

ence disruption too.

Top Areas Holding Back Deployment

Although many verticals are seeing

good pilots, and some applications

have already made it to production

grade, IIoT and 5G are generally not

the operational guts of our cities yet.

When we look at what our survey

participants selected as the key areas

holding back the deployment of IIoT

and 5G applications (Figure 25) we

can start to identify the drivers of

the tipping point.

Our respondents selected connec-

tivity technology (41%), technology

(e.g. battery life, cost) (33%), and

standards (33%), as the top three

areas holding back deployment of

5G and IIoT.

According to our telecom

respondents, some of the key chal-

lenges they are facing include:

• Spectral harmonization or

ensuring the uniform allocation

of radio frequency bands across

entire regions.

• Working with dated technology

• Bridging the gaps between

departmental siloes

• An evolving government ecosystem

• A large variety in use cases and

city objectives

The readiness of technology for

smart city deployments is a serious

concern as many telecom represen-

tatives have reported issues with,

battery life, network speeds, security,

human intervention versus nonhu-

man intervention, data collection,

analysis, and network layering.

Conclusion

There is significant excitement and

potential around smart cities—and it

is just getting started. Although there

are many areas where the three ma-

jor stakeholder’s goals align, there are

certainly areas where they don’t. Al-

though utilities, telecom providers and

cities may ultimately realize different

benefits based on their goals, these

key stakeholders must come togeth-

er to implement the communications

networks and infrastructure that are

common to all of their needs.

Figure 24: Top Industry Verticals Destined for Disruption

Figure 25: Top Areas Holding Back Deployment of 5G and IIoT

Healthcare

Smart Cities

Connected Homes

Connected, Smart Buildings

Smart Utilities

Autonomous Vehicles/Connected Cars

Smart Factories

Energy (e.g. oil and gas, pipelines)

42%

42%

38%

38%

32%

29%

25%

13%

Note: Percent of respondents placing a vertical in their top three

Connectivity Technology

Technology (e.g. battery life, cost)

Standards

Privacy/Security

Policy

Analytics

Business Case

41%

33%

30%

23%

21%

19%

12%

Note: Percent of respondents placing an area in their top three

19

Featured Companies Featured Companies

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UPCOMING 2016

EDITORIAL PROGRAMS INCLUDE:

NOVEMBER 2016

Telecom Software Series: Securing Mobility in the Age of Analytics

DECEMBER 2016

Analyst Angle Series with Senza Fili: Mobile Backhaul and Fronthaul

Connected Car Series: Connectivity and Services—Is the Industry Ready?

JANUARY 2017

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Documents

The future of IIoT: Smart city, utility and telecom ...€¦ · telecom convergence OCTOBER 2016. ETRE REPRT 2 4+81+1010+38+6++483 Executive Summary This report provides a 360-degree