Utilities – from risky business to smart, successful connectivity
Guest post by Angus Panton, Director of Power and Communications at software quality specialist, SQS Group Ltd.
Utilities are driving much of the action in consumer M2M – but it's a disruptive technology for suppliers and needs careful quality control.
Players in the world of M2M communications are focusing on one of the fastest growing application sectors: energy and utilities. Consumer-based equipment such as smart meters and internet-controlled heating controls will be rolled out to possibly hundreds of millions of homes to help save energy and give people smarter options for managing their lifestyles.
Major consumer electronics players are now making moves into smarter home technology, such as Apple with its HomeKit – a suite of tools to control most home devices from iPhones and iPads. This will be big business indeed, and there is likely to be a flood of apps for the consumer utilities market in particular. By 2023, two-thirds of the 30 billion smart, wirelessly connected devices in homes and industry worldwide will be for utilities, as recent research by Analysys Mason shows.
Already, markets such as the UK, Germany and the US are seeing the introduction of remote and automatic central heating controls run from mobile devices, enabling consumers to manage their energy costs using web-based technology that has driven so much innovation and convenience in other areas such as mobile commerce and social media.
Take the UK, where three players are active in wireless home heating controls: Hive, owned by energy giant British Gas; the Google subsidiary, Nest Labs; and German firm tado. Each uses mobile device apps to simplify the process of running home central heating from anywhere. Functions include:
automatic response to weather patterns;
firing up the heating from a location app when a resident is heading home; and
learning from a householder's manual tweaks to replicate them automatically.
For energy suppliers, empowering users to keep on top of their consumption using smart, connected devices is rapidly becoming a differentiator in the largely commodity-based utilities market, and in turn can provide suppliers with a potential goldmine of marketing, customer data, operational opportunities and substantial revenues.
And for society the potential prize is huge in terms of cutting and controlling energy consumption. British Gas estimates, for example, that as many as 7.8 million homes are being heated every year in the UK while no one is at home.
But like other areas in the new world of IoT, there are various technological and regulatory hurdles that carry risk for utilities entering the market. Should the security of the system be breached or should the installation fail to fulfil claims for its performance then consumers may lose trust. To add pressure, suppliers may have regulators and governments breathing down their necks as demands for energy savings take hold.
The pace of growth of smart technologies in energy will depend on combining faultless performance with ease of use and security to ensure customer confidence. Naturally, companies are keen to have assurance that applications they offer to the market will work as advertised – and this technology poses particular disruptive challenges given the interconnection issues across networks, as with any complex IT system.
As Adrian Tuck, vice chairman of the ZigBee Alliance, which develops M2M standards, says: “I believe we are about to go through a revolution in the energy space every bit as big as the telecoms revolution.”
Scaling up for smart meters
As well as smart home devices, a powerful spur to M2M growth in the energy sector is coming from the rollout of smart energy meters. Along with consumers' sensitivities relating to security, the sheer size of the programme – from the immense installation task through to the meter's operation – carries huge potential for positive or negative impact on consumer acceptance of smart connected devices. In the UK, replacing 53 million conventional domestic power and gas meters in about 30 million premises by 2020 will be Britain's biggest home energy technology change for more than 40 years.
A smart decision has been made in the UK, as a licence to manage the communications infrastructure for the Smart Metering Implementation Programme has been granted to a special company, the Data and Communications Company (DCC). But there is trepidation within the energy industry. For example, as Neil Pennington, smart programme director at energy firm RWE npower, said recently at an industry seminar: “Testing must be robust – end-to-end across industry parties and the DCC, and in live situations. If interoperability is not consistent and systems and processes not failsafe, it risks undermining consumer confidence.”
The imperative to test rigorously is clear. Large energy suppliers must be ready for DCC interface testing in autumn 2015. They have huge rollout profiles that will run to installing tens of thousands of meters a week.
Even before smart metering is in play, the installation programme carries significant risk. Any programme that involves home visits increases reputational risks from poor service. According to consultant Ernst and Young: “With so little upside, the energy supplier is looking carefully at the costs and risks.”
Quality to the fore
Arguably installation will be the first “big data” challenge in the smart metering programme. The task will involve upgrades in their information technology including changes in Enterprise Resource Planning (ERP) systems, asset management, job scheduling and handheld devices.
Interfaces and back-end systems will have to be tested to ensure they can handle the accelerating load as it increases through rollout. Much complex integration and operation acceptance testing will be required and will need careful management.
Software quality is now playing an increasingly important role in the value of organisations, and the sheer pace of change in the energy sector puts such quality into sharp relief. For companies facing such major and looming deadlines, testing cannot be done late in a project lifecycle as it may well be too late to address defects, increasing the cost exponentially.
Energy sector business strategists will surely differ in their interpretation of what is needed for success in a digital utility market. But crucial requirements for the industry and its customers will be assured effective, resilience and reliability in the technologies. And customer experience needs to be assessed equally rigorously because ease-of-use can be as potent in influencing perceptions as sound performance.
The importance of assured performance and usability in connected devices to the development of the energy industry is a responsibility that the testing industry is keenly sensitive to. IoT offers energy firms a real opportunity to connect better with its customers. For the energy sector, confidence in smart, connected technology will be the fuel it needs to achieve, and benefit from, the pace of change the market will surely demand.
Smart home device under test
A UK energy utility venturing into the remote energy control market with a new device needed confidence that the product would enhance its reputation by fulfilling customer expectations.
The company needed assurance that the device was reliable, easy to operate and a sound reflection of its commitment to customers. SQS was selected as an independent quality partner to provide expert testing advice based on its utilities sector experience.
SQS provided comprehensive reporting via a “quality barometer” throughout the development of the energy control device. Specific testing included early testing to ensure that operation was intuitive and reliable as well as the device was easy to use, and engaging the utility company closely during a peak simulation exercise – with the IT infrastructure architect and database administrators present at test runs.
Repeat testing on a range of browsers was carried out and testing on different mobile screens was vital. Testing on the prototype version was manual to prevent any incorrect images or content being missed. Non-functional tests included failover and disaster recovery with a priority being to ensure user settings were preserved in either instance.
Ultimately, the utility company had confidence to be one of the first to launch a new, efficient, reliable and secure remote energy control service successfully.
About SQS
SQS (Software Quality Systems) is the world's leading specialist in software quality. This position stems from 30 years of successful consultancy operation. SQS consultants provide solutions for all aspects of quality throughout the whole software product lifecycle driven by a standardised methodology and deep experience in various industries. Headquartered in Cologne, Germany, the company employs approximately 4,000 staff. For more information, see www.sqs.com.
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Semtech Announces Microchip as an Adopter of LoRa™ Technology to Target IoT
LoRa RF platform now available for IoT applications through expansive ecosystem.
Semtech Corp. (Nasdaq: SMTC), a leading supplier of analog and mixed-signal semiconductors, today announced that Microchip Technology Inc. (Nasdaq: MCHP) has adopted Semtech's long-range LoRa™ RF technology. Microchip is developing LoRa technology-based solutions that target Internet-of-things (IoT), machine-to-machine (M2M), metering, security, and industrial-automation applications, among others.
Microchip, a leading provider of microcontroller, mixed-signal, analog and Flash-IP solutions, is already an IoT/M2M market leader, offering end-to-end IC solutions that include certified wireless modules, sensors and eXtreme Low Power PIC
u-blox acquires IP for industrial Wi-Fi
6 Aug 2014 - u blox, a leading provider of wireless and positioning semiconductors and modules for the automotive, industrial and consumer markets, today announced that it has acquired Antcor, a developer of Wi-Fi baseband intellectual property. The acquisition consists of a purchase of 100% of the shares of Antcor Advanced Network Technologies S.A. at a price of EUR 5.2 million (CHF 6.3 million), excluding an earn-out which offers the sellers the possibility to participate in certain future revenues of the company.
The transaction gives u-blox immediate ownership of advanced Wi-Fi core technology that will enable the company to develop ruggedised communication solutions tailored to demanding environments.
"The acquisition of Antcor's technology and expertise significantly strengthens our chip design capabilities for short range wireless communications," said Thomas Seiler, CEO, u blox. "Their technology is a perfect complement to our wireless communications and global positioning activities and expands our ability to deliver robust, end-to-end M2M communication solutions to our customers,"
About u-blox
Swiss-based u-blox (SIX:UBXN) is a leading provider of wireless and positioning semiconductors and modules for the automotive, industrial and consumer markets. Its solutions enable people, vehicles and machines to locate their exact position and wirelessly communicate via voice, text or video. With a broad portfolio of chips, modules and software solutions, u-blox is uniquely positioned to allow OEMs to develop innovative solutions that enable mobility quickly and cost-effectively. Headquartered in Thalwil, Switzerland, u blox has offices in Europe, Asia and the USA.
About Antcor
Antcor is a leading provider of software baseband IP for the communications and connectivity chip industry. Founded in 2004, Antcor is a privately-held VC backed company with headquarters in Athens, Greece.
Source: u-blox & PRNewswire
M2M Visions of 2020
By Jeffrey O. Smith, PhD, Chief Technology Officer and EVP, Numerex
Ten years ago, while executing a keynote presentation at an M2M industry tradeshow, I showed a live demonstration of remote monitoring of a "real" system inside of a virtual world. I commanded my avatar to push a button in the then-popular Second Life and a video inside that virtual world showed a real-life robotic bunny's ears falling. We’ve come a long way since then but I still believe we will know M2M is successful when nobody notices it.
Certainly there are overly hyped M2M applications that will inevitably play out to be less dramatic than predicted. But when technology is simple, embedded and invisible, that’s when we’ll see greatness.
Imbedded Lifestyle
By the year 2020, connected devices will become the reality we’ve been waiting for. Our cars will report how much fuel we used, meters will control our thermostats, pedometers will unlock our refrigerators only when we’ve walked the required amount of daily steps. Doctors and caretakers will know something is wrong with our organs before we do. We will be inundated by more ISM short range protocols than we can imagine embedded in our shoes, pacemakers, medicine bottles, wallets, eyeglasses, watches, dog collars, trash bins and more. Sensors will be embedded in bridges and ceilings and roads. Bluetooth Low Energy, ANT and mesh networks, ultra-low-power, short-range wireless technology designed for sensor networks, will provide connected "dust" that reports petabytes of information back through gateways requiring petaflops of computing power.
Radio Communications
By the third decade of this millennium, we will also see the continuation of the evolution of board to module to chip. The integration of short range ISM radios such as WiFi, Bluetooth, ZigBee and Z-wave on these modules will proliferate. Radios will become more application specific with software embedded for wireless and wired protocols such as Modbus over Ethernet and ZigBee over 802.15.4. I also believe Java will abandon Linux and will go bare metal in order to improve on resources, energy, and startup time.
Greater Security Required
The transient effects of large numbers of M2M devices and the coordination of those devices in situations of anomaly will become more important as the number of devices will outnumber handsets ten-fold. These devices will have both publishing and subscription capabilities, communicating on a peer to peer basis. As these devices are deployed, the complex interaction between them and the network will cause perturbations that could have a detrimental effect on the network, much like "packet storms" in IP networks.
This pending social network of machines has implications for security, too. If we subscribe to other companies, the government, or even a sensor crowd source of information, how do we know it is secure and accurate? Security will be the next important leap forward in M2M.
Desire Drives the Future
Looking forward to 2020 and beyond, these predictions (and perhaps all others re: M2M’s future) boil down to two key areas of human desire: Our desire to explore and make sense of our universe and our desire to manage our lives more efficiently (and add longevity).
As a result, we will continue using big data in search of the "God Particle" that makes sense out of everything. And "digital noise," will continue to have a strong influence on society and culture. Device lifecycle management will be more important than ever as humans will be truly interacting and subscribing to information from sources which we do not control.
Are M2M security solutions necessary for IoT?
Guest post by Eva Enanoria, LeadingQuest.
As more equipment manufacturers and developers, particularly for consumer appliances, are catching up with the evolution of the Internet of Things (IoT) and as most of these devices become M2M connected, new technologies and solutions are beginning to emerge, further speeding up the growth of IoT and facilitating a much smoother adoption process for industries and consumer sections. We are moving into a world where everything will be connected eventually. Several reports have indicated how huge the IoT will become. Today, the market is already big and it is expected to grow even more in the next couple years – up to 5 billion devices connected via a cellular network could be operational in 2020.
All the same, with every new technology comes questions, compatibility issues and security hazards. M2M communication and the IoT is not an exception. M2M connections come with security requirements that needs to be in place to ensure that connections are safe, information is safeguarded and privacy is kept, making them invulnerable to hacking, manipulation and other network threats, thus M2M security solutions are vital.
Agreeing to a report from AdaptiveMobile, there are five specific security threat points. The first point is the nature of M2M solutions, where devices can be unchecked for long periods of time. Security consultant, Chathal McDaid said:
“Many of these devices will see little human intervention for weeks or even months, so exploited vulnerabilities may go undetected for a considerable length of time, increasing their impact.”
The second threat they pointed out is the lack of patches for these solutions. This may also be brought by the lack of openness in the system. Most of these solutions do not have an open-source platform, where developers can create patches for bugs that become a potential security threat. Take for instance, healthcare applications. The role of these devices is to perform and are expected to work for expressly long-life requiring little possibility of upgrading the system.
The next point, according to AdaptiveMobile, is that mobile M2M devices are static devices, mostly embedded and are not easily gotten rid of. Replacing these devices for upgrades can be costly and impractical. Why fix something that is not broken right? However, the lack of patch mentality comes into place once again. Another point is that it can be difficult to include M2M security solutions integrated with some single-task M2M devices. Lastly, the effect of these threats could be more profound depending on the nature of the attack or threat. A security breach against a bank or an account may be an unpleasant. But imagine the kind of attack that could be done on a heart monitor.
AdaptiveMobile said that 100% prevention must be the target and not the cure, which is the traditional approach in digital computing. This means that new M2M security solutions at a network level must be created and delivered.
McDaid said:“With 86% of consumers stating that they see potential risks in M2M technologies, the general public is clearly aware of the challenges present in this new world of communications. To protect subscriber trust in these services, and the core technology, operators must protect them from any security flaws or exploitation from third parties. If operators secure the communications, then subscribers can rest assured that their protection is taken care of.”
Context Information Security, a provider of technical security consultancy, on the other hand, believes that complementary solutions will help ensure that various machines and appliances connected to the network will not create any security risk to the consumers. Context has worked with LIFX on developing a firmware to rectify security issues with their Wi-Fi enabled, energy efficient LED light bulbs. Context also encrypted the network traffic using an encryption key derived from Wi-Fi credentials as well as secure on-boarding of new bulbs onto the network.
Complementary solutions at the same will enable manufacturers to make an assessment on their products security levels before these products are made available to the market. This should help save operational cost and in effect increase customer satisfaction. “In some cases, these vulnerabilities can be overcome relatively quickly and easily… In other cases the vulnerabilities are fundamental to the design of the products. What is important is that these measures are built into all IoT devices from the start and if vulnerabilities are discovered, which seems to be the case with many IoT companies, they are fixed promptly before users are affected.”
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Internet of Things Accelerating Demand for Intelligent Gateways, According to New Research by VDC
The rampant growth of connectivity spurred by the Internet of Things and the spread of cloud-based business models are leading many end users to seek gateway solutions facilitating the deployment of new applications and services.
A recent study by VDC Research shows that the market for intelligent gateway devices featuring a software platform enabling new applications or services will see substantial growth over the next five years. The Internet of Things enables a swath of opportunities for new value-add and commercial software and services, many of which are launching and gaining traction in several different industries. In fact, results from VDC's annual end-user survey of embedded engineers indicates the majority of businesses supporting M2M & intelligent gateway applications plan to deploy cloud services through gateways in the next 12 months. The specific gateway requirements of range, power, latency, and others between applications will lead to more vertical solutions than general-purpose devices.
“Growing networking requirements and opportunities for new B2B and B2C business models will drive the market for Intelligent Gateways,” says VDC analyst Dan Mandell.
“The software platform, which greatly benefits from the scalability of cloud computing and storage, is a chief point of differentiation among vendors of comparable industry solutions.”
“From a technical standpoint alone, M2M and intelligent gateway devices are increasingly sought to provide more support at the edge of embedded networks that are strained by progressively more connected devices and infrastructure.”
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Sierra Wireless Reports Second Quarter 2014 Results
Record revenue of $135.0 million; 23% year-over-year growth.
Second Quarter 2014 highlights:
++ Record revenue of $135.0 million, an increase of 23.2% compared to Q2 2013
++ Non-GAAP earnings from operations of $3.7 million, an increase of 149%, compared to $1.5 million in Q2 2013
++ Non-GAAP EPS of $0.08, an increase of 167%, compared to $0.03 in Q2 2013
Sierra Wireless, Inc. today reported results for its second quarter ending June 30, 2014. All results are reported in U.S. dollars and are prepared in accordance with United States generally accepted accounting principles (GAAP), except as otherwise indicated below.
Jason Cohenour, President and Chief Executive Officer, said:
“In the second half, we expect to deliver continued revenue and profitability growth, while also pursuing additional strategic acquisitions to expand our leadership position in the machine-to-machine (M2M) market.”
Revenue for the second quarter of 2014 was $135.0 million, an increase of 23.2% compared to $109.6 million in the second quarter of 2013, and an increase of 11.4% compared to $121.2 million in the first quarter of 2014.Revenue from OEM Solutions was $116.6 million in the second quarter of 2014, up 22.6% compared to $95.1 million in the second quarter of 2013.Revenue from Enterprise Solutions was $18.4 million in the second quarter of 2014, up 27.0% compared to $14.5 million in the second quarter of 2013. On a consolidated basis, organic revenue growth, which excludes contribution from the recently acquired In Motion Technology and AnyData businesses, was 16.8% compared to the second quarter of 2013.
GAAP RESULTS
Gross margin was $43.3 million, or 32.1% of revenue, in the second quarter of 2014, compared to $36.5 million, or 33.3% of revenue, in the second quarter of 2013.
Operating expenses were $49.6 million and loss from operations was $6.3 million in the second quarter of 2014, compared to operating expenses of $40.4 million and a loss from operations of $3.9 million in the second quarter of 2013.
Net loss from continuing operations was $8.2 million, or $0.26 per diluted share, in the second quarter of 2014, compared to a net loss from continuing operations of $6.7 million, or $0.22 per diluted share, in the second quarter of 2013.
NON-GAAP RESULTS
Gross margin was 32.2% in the second quarter of 2014, compared to 33.4% in the second quarter of 2013.
Operating expenses were $39.8 million and earnings from operations were $3.7 million in the second quarter of 2014, compared to operating expenses of $35.1 million and earnings from operations of $1.5 million in the second quarter of 2013.
Net earnings from continuing operations were $2.6 million, or $0.08 per diluted share, in the second quarter of 2014, compared to net earnings from continuing operations of $1.0 million, or $0.03 per diluted share, in the second quarter of 2013.
Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) were $6.8 million in the second quarter of 2014, compared to $4.9 million in the second quarter of 2013.
During the quarter, the Company decided to reduce the scope of its 2G chipset development activities, resulting in restructuring costs of $1.0 million associated with staff reductions and an impairment of $3.8 million in related assets. These staff reductions will be fully implemented by the end of the third quarter of 2014 and the Company expects an annualized reduction in operating expenses of approximately $1.2 million.
Cash and cash equivalents at the end of the second quarter of 2014 were $168.4 million, representing an increase of $17.1 million compared to the end of the first quarter of 2014. Cash generated from operations during the second quarter was $11.7 million.
Financial Guidance
In the third quarter of 2014, we expect revenue to grow sequentially and on a year-over-year basis, a modest sequential improvement in gross margin percentage and similar operating expenditures compared to the second quarter of 2014, resulting in the following Non-GAAP guidance for the third quarter of 2014.
Q3 2014 Guidance
ConsolidatedNon-GAAP
Revenue
$137.0 to $140.0 million
Earnings from operations
$4.9 to $6.2 million
Net earnings
$3.8 to $4.7 million
Earnings per share
$0.12 to $0.15 per share
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The installed base of active cargo tracking units will reach 4.1 million by 2018
According to a new research report from the analyst firm Berg Insight, the number of active tracking devices deployed in cargo loading units including trailers, swap bodies, intermodal containers, air cargo containers, cargo boxes and pallets reached 1.5 million worldwide in Q4-2013.
Growing at a compound annual growth rate (CAGR) of 22.3 percent, this number is expected to reach 4.1 million by 2018. The North American trailer telematics market accounts for 60 percent of the total installed base in this sector today.
The top providers in the North American trailer telematics market including Omnitracs, Skybitz, ID Systems, Orbcomm and Spireon together have an installed base of well over 600,000 active units today. In Europe, Idem Telematics, Mecomo, Schmitz Cargobull and Novacom Europe are major trailer telematics solution providers with over 20,000 active units each. Orbcomm, Envotech, Zenatech, PearTrack Systems, Honeywell and Savi Technology are major providers of intermodal container tracking solutions. OnAsset Intelligence and Moog are examples of actors which offer specialised solutions for real-time tracking of air freight cargo.
Technology advancements make it economically feasible to track ever smaller logistics units and in the future it will be commonplace to track not only trailers and shipping containers but also individual pallets and cargo boxes.
Johan Svanberg, Senior Analyst, Berg Insight, said:“Logistics and transportation companies need to be ready to take advantage of the increasing amount of data generated by cargo tracking solutions in order to effectively improve productivity and customer service levels.”
Regulations related to cargo transport have furthermore a significant impact on the market environment. Numerous countries worldwide have introduced regulations and programs related to cargo security, tax collection and handling of special cargo such as food, dangerous goods and animals.
Mr. Svanberg noted:
“Smart tracking solutions can help stakeholders to efficiently comply with this myriad of regulations and programs.”
Download report brochure: Trailer and Cargo Container Tracking
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