combining the four pillars of innovation within the ... paper... · develop and implement new...

Machina Research White Paper for ThroughTek

Combining the four pillars of

innovation within the Internet of

Things in one platform

Emil Berthelsen, Principal Analyst

February, 2015

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Machina Research//White Paper © Machina Research, 2015

Executive Summary

The Internet of Things is made up of four significant pillars of innovation: smarter connected

products, cloud service architectures, advanced data analytics, and quicker application development

technologies.

Each of these innovations has started to contribute to changes in businesses and IT processes.

Brought together in one platform, the Internet of Things becomes a market-changing tool for

retailers, service providers, consumer electronics OEMs and system integrators enabling new

products and services, delivering new revenue streams, operational efficiencies and improved

customer engagement models.

Smarter connected products

Enterprises have recognized significant opportunities in the Internet of Things. Smarter connected

products are allowing (amongst others) retailers, service providers, and consumer electronics OEMs

opportunities to provide customers with products and integrated services, allowing new business

models, creating new and longer customer engagement and promising new revenue streams.

Machina Research forecasts close to 38 billion connected devices by the end of 2023.1 and we are

already well into the growth curve. Enterprises have started to move beyond the smaller trial and

proof-of-concept scenarios to exploring and launching significant networked device solutions.

Service providers such as ThroughTek are also driving and enabling this rapid growth, managing

more than 5 million devices with over 75 million connections per month on their platform.

As more and more devices become smarter, embedded with advanced chips and modules,

opportunities to deliver new and innovative services will follow. The main challenge for platform

providers in this market will be to create as open, flexible and scalable environments as possible.

Cloud service architectures

Integral to the growth of the Internet of Things are cloud service architectures. Without the ability to

quickly scale services and manage growing data requirements, the Internet of Things will not meet

the requirements of enterprises and customers.

Being able to deliver quicker and easier integrations, enabled through the cloud, or accessing

available service modules are significant benefits. However, one of the most important contributions

cloud services have made to data and applications has been the introduction of substantially more

flexible and cost effective business models for the storage and processing of data, turning this entire

opportunity into reality.

1 From Machina Research Global M2M Forecast Database. The forecast of 38 billion by the end of 2023 includes M2M devices, PC, tablets and handsets.

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Advanced data analytics

The Internet of Things will not deliver on its promises without data analytics. IoT and data analytics

are two sides of the same coin: devices producing the data, analytics securing the value from the

data.

Retailers, service providers, consumer electronics OEMs and system integrators are definitely aware

of the opportunities from smarter, connected devices and recognise that the value add and richer

applications will come from data analytics.

Application development technologies

The game changer in the Internet of Things will be the combination of analytics AND the ability to

develop and implement new applications quickly. IoT platforms will need to avoid becoming closed,

stand-alone, and siloed solutions.

IoT platforms will need to encourage and deliver integrated and open architectures on a single

platform. The openness of the platform will require an ability to address the diversity of devices and

connectivity technologies as well as provide APIs and SDKs for further and future development.

This White Paper shares the significant advantages for retailers, service providers, consumer

electronics OEMs and system integrators of a single flexible and scalable IoT platform. Bringing

together the four innovations of smarter connected products, cloud service architectures, advanced

data analytics, and quicker application development technologies in one platform delivers a cost

effective, quicker and substantially easier route to market.

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1 A world of smarter, connected devices

Enterprises have recognized significant changes in the opportunities in the Internet of Things. In a

world of smarter connected devices, products such as home lighting, home cameras, heating and air-

conditioning systems, entry access systems and personal monitoring devices are set to become

increasingly integrated into new and innovative services. Such services will include home

environmental settings that respond to the proximity of home owners to the home, access and

security cameras that work in unison to enhance home security, and home lighting which responds

to home owner preferences and interacting intelligently with TV and audio sources.

Figure 1: Global machine-to-machine connections by connectivity technology 2015-23 [Source: Machina Research M2M Forecast Database, 2015]

Two important building blocks appear in most M2M and IoT solutions: the devices and, where

necessary, a gateway. Depending on the nature of the M2M and IoT application, devices may either

connect directly via some wide area network to the enabling platform, or as is the case in home

solutions, connect via local area networks to a home gateway (or controller). In either model, the

build of the device will need to include capabilities to transfer data across a range of networks using

different protocols, recognized either by the receiving platform or gateway. In the rich home

environment of protocols these may include Zigbee, Wi-Fi, Bluetooth, Z-Wave as well as a range of

proprietary protocols.

Working with more than 30 integrated circuit manufacturers such as Qualcomm, Intel, Broadcom,

Hisilicon, TI, NXP, MediaTek and Ambarella, ThroughTek looks to make this connection as simple and

economical as possible. With over 100 different Systems on Chips (SOCs) pre-configured to work

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with the Kalay Platform, ThroughTek has simplified the process for retailers, service providers and

consumer electronics manufacturers to launch products which can then seamlessly connect to other

devices and ultimately the Kalay platform.

In one significant move, having pre-configured over 100 SOCs and enabling quicker connections,

ThroughTek assists retailers, service providers and consumer electronics manufacturers reduce

overall launch times of products and services.

As more and more different devices by different manufacturers are introduced in, for example, the

home environment, enabling this degree of simple interoperability benefits retailers, service

providers, consumer OEMs and ultimately customers.

In bringing together and connecting all the different devices into one platform, Kalay Connect

ultimately opens up the opportunity to design services across all devices. Through fully documented

and published external application programming interfaces (APIs), developers can design new and

innovative services for these smarter connected devices, and ensure that these are intelligently

implemented and managed through the platform.

One such service is the Kalay platform’s unique and simple ability to establish secure connectivity

between two devices without having to go through a cloud server all the time.

Using a unique identifier (UID) assigned and managed by the Kalay platform for each individual

device, the platform is able to establish a secure and direct connection between, for example, a

home camera and a mobile phone via P2P. Consumers will only need to scan a barcode and input a

password in their smartphone to connect either a controller or a standalone device, all managed

within the application. This connection will manage the direct transmission of data from the device

to the smartphone. The solution supports Linux, Android, Windows, iOS and RTOS amongst others.

In a world of smarter, connected devices, retailers, service providers and consumer OEMS will

become more and more involved in designing and enabling new services. This will require platforms

that are highly agile, flexible and scalable, supporting the diversity of devices, protocols, and

applications that will be designed and implemented. Time to market and suitable price points will

remain important factors, and most important, delivering robust and secure connectivity will be key.

2 Adding value to your services from the cloud

Enabling smarter, connected devices to connect to the cloud via the Kalay Platform opens a host of

opportunities for retailers, service providers and system integrators to design, integrate and deliver

new services to customers.

Within the cloud-based services of the Kalay Platform, ThroughTek delivers a significant range of

ready-made modules which retailers, service providers and system integrators can make use of in

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designing new services. A few of these modules include Video Surveillance as a Service, Logic Engine,

and ThroughTek Push Notification Service (TPNS):

VSaaS (Video Surveillance as a Service) provides a one-stop service which includes P2P real-

time live viewing, cloud recording and potential integration of video analytic tools. One

example using this service is that of the connected IP camera where video recordings are

triggered once sensors have detected movement, and service providers could charge user

monthly fee for the cloud recording and video playback services.

Logic Engine is in effect a service that allows customers to define interdependent tasks

between smarter, connected devices and third-party applications based on shared data,

applied data analytics rules and execute commands. As an example, integrating weather

information from Yahoo Weather, Wunderground, and World Weather Online may help

manage home air-conditioning and heating systems.

ThroughTek Push Notification Service enables customizable push messages including

scheduled and targeted push messaging in rich notification forms such as videos and images

in particular. The module works on different push networks such as Apple Push Notification

Service, Google Cloud Messaging and Baidu.

Built as a framework to add value to the services of retailers, service providers, consumer electronics

OEMs and system integrators, the cloud based service architecture of Kalay with all its modules

certainly provides this. With available APIs and SDKs, customers may opt to combine these available

and modular services from Kalay with their own developments,

As mentioned, delivering cloud-based service modules allows Kalay to offer highly scalable and

flexible service options to its customers. In the next section, the paper will look in more detail at the

benefits from data analytics but before moving away from this range of cloud services, it is worth

noting that the Kalay Box service offers the ability to quickly and easily connect with other personal

cloud services such as Dropbox, Google Drive and social networks, and delivers a highly scalable

cloud storage facility, allowing customers easy access to a private personal storage solution that

would compete with portable hard drives and USB flash drives, and allow as an example, data from

an IP camera to be stored in the cloud similar to that of a Network Video Recorder (NVR).

Before delving into the topic of analytics as a third pillar in the internet of Things, the issue of

security should be mentioned as it emerges whenever topics of data and cloud services are raised.

Platforms in this space should certainly provide:

Intrusion detection systems on both devices, controllers and networks to prevent

malware function

DDoS protection before attacks shutting down the services

Strict rule-based firewalls block for all unnecessary access and threats

Around-the-clock monitoring to detect anomalies in network traffic

And in terms of data communication, one approach taken by Kalay involves:

HTTPS connection for device-to-cloud and cloud-to-cloud services

128/256-bit AES, XTEA encryption for device-to-device data transferring

Auto-generate AES key using ECDH (key exchange algorithm)

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Authentication mechanism using ECDSA (digital signature algorithm)

Packet scrambling with supported devices

With server and data security, cloud service architecture provides a secure and robust framework for

the management and development of IoT services.

3 Advanced data analytics delivers richer services for customers

A major innovation in the Internet of Things is the increased sharing and analysis of data. Data

analytics is not new but in the Internet of Things, the scale, speed and diversity of data, generated by

growing estates of networked devices in subnets of things2 provides game changing business models

and services.

As illustrated in Figure 2, products are becoming smarter and moving away from being isolated to

being connected. With these developments, an increasing amount of data from devices is now

available and information technology has started to play an increasing role in operational

technologies. With the Internet of Things, this convergence of operational and information

technology is certainly taking place, and behind it is the processing and analysis of data. Take the

example of a home security camera. Previously, this would record images over a given period, and

store them in a highly efficient operational manner. With the convergence of operational and

informational technology, these recordings have now become more intelligent, capturing only

images where changes may have occurred, and combining potentially other sources of data

(temperature, movement sensors, and lighting) to ultimately deliver the highest quality security

images.

With smarter, connected devices, cloud services and data analytics, retailers, service providers and

consumer OEMs are a stage where the delivery of products with integrated services has emerged as

a new business model, captured in the term ‘servisation.’

2 For an early view on the concept of Subnets of Things, read Machina Research White Paper, “Big Data in M2M: tipping points and subnets of things “ published in February 2013

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Figure 2: The changing business models in IoT [Source: Machina Research, 2014]

Data analytics can add value in a number of ways. It can provide customers with insights on the

performance of connected devices, and where trends or issues may be identified early on, allowing

for a degree of preventive action. It can also enable such services as Logic Engine (see Section 2,

above) to perform automated actions based on data from other smarter, connected devices and

third-party applications. Analytics at this level is not what could be termed ‘advanced’ but delivers

practical if-this-then-that routines such as dimming lights when certain programmes appear on the

television screen, or increasing room lighting and heating as the home owner approaches his or her

home, or allowing for the limited entry access to homes for delivery people.

In contrast, advanced data analytics is about analysing multiple data sets to either predict or

optimise business outcomes and processes. In many cases, advanced analytics will involve complex

algorithms or machine learning approaches that analyse and improve on those algorithms when

working with data. One such example is the cloud recording application with video analytics. In this

use case, recorded video is analysed to acquire shopper demographics based on appearance such as

age, gender and behaviour, providing valuable customer information and ultimately improving

product placement, inventory, and the overall shopping experience. All without compromising

customer privacy.

Creating improved services for customers remains a constant goal for all enterprises. With such a

diverse range of sources and types of data from all sorts of sensors and other edge devices, the

analytics tools required will need to be agile, flexible and highly scalable. Delivered as a cloud-based

service, these tools for data analytics will need to be continuously developed and accessible for

retailers, service providers and others to design new services with. ThroughTek, in launching data

analytics as a service is well onto this path for its customers.

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4 Arrival of data and applications in IoT

The emergence of the mobile phone introduced a massive change in communications. More

recently, the emergence of smart phones have introduced users to a range of new applications, once

again adding many new features to customers of mobile communications.

A similar trend is underway in IoT, extending the basic functionality of connected devices. This trend

sees a shift from simply monitoring and communicating with connected devices to developing and

designing new applications based on the data generated and shared by these devices. In effect, the

focus of the market has moved from focusing on connecting and managing devices to that of

managing data streams and building applications. In practice though, all components need to work

in unison to deliver the main benefits in the Internet of Things.

Bringing all these innovations in IoT together is where the value of an integrated architecture and a

single platform emerges. In a platform where applications can be easily developed with SDKs and

made accessible through available APIs, the opportunities to design and deliver cross platform

applications becomes substantial. This not only creates additional opportunities for developers but

creates a more exciting and dynamic market for customers.

Cross platform applications, easily integrated through available APIs and developed with SDKs,

become a significant advantage for retailers, service providers, system integrators and anyone else

wanting to develop IoT applications. Understanding this dynamic and adopting an appropriately

flexible platform will allow stakeholders to better exploit not just the opportunities of today but

ensure also a quick and secure entry to the market in the future.

5 Enterprises will need to consider flexible and scalable IoT platforms

Combining the four IoT innovations of smarter connected products, cloud architecture services,

advanced data analytics, and application development into one framework will deliver huge benefits

for enterprises and consumers.

Machina Research has identified that such IoT platforms will need to be scalable, agile, and flexible.

These platforms will need to handle unexpected rates of growth and diversity in devices and data,

and will need to be flexible enough to adapt to the changing requirements of new applications.

Where one set of devices and applications will have, for example, addressed child tracking through

smart bracelets, the follow-on application and solution may relate to home security and child

monitoring at home. In these two cases, given the agility and flexibility of a suitable IoT platform,

developing a new application which would connect the child tracking with the security application

becomes a new application and service.

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For retailers, service providers, consumer electronics OEMs and system integrators, the IoT platform

needs to deliver:

Ease of management of devices and connectivity

Enable rapid development of new applications

Provide ready-made integrations and extensions to other applications and services

Enhanced security encryptions and cloud service protection

With all these requirements, the Kalay Platform of ThroughTek delivers one such solution to IoT with

additional benefits.

The Kalay Platform

The Kalay3 Platform is an innovative cloud-based solution, delivering in one unified framework, the

seamless integration and connection between smart, connected devices; cloud architecture services,

advanced data analytics and application development.

It is a platform designed for M2M and IoT applications and markets, and delivers both operational

and additional business value to enterprises and consumers. It is a market proven platform,

managing more than 5 million devices with over 75 million connections per month.

3 Kalay means ’holding hands’ in the language of Taiwan’s aboriginal people, signifying the unifying aspects of the platform.

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Figure 3: The Kalay Platform [Source: ThroughTek, 2015]

The platform and approach of ThroughTek delivers additional value to enterprises and consumers

by:

Working with over 100 SOCs to deliver quicker and more price competitive components for

smarter, connected devices to the Kalay platform

Delivering APIs for cloud services as well as additional and unique APIs for improved media

performance and easier connection setup for users through simplified UID

Enables enterprises to provide a much better service to their end customers by interpreting the

device data, streamlining operations processes, and delivering additional customer support

information.

For retailers, service providers, consumer electronics OEMs and system integrators, the Kalay

platform provides an important and significant partner in addressing IoT opportunities in Smart

Homes, Smart Healthcare, Smart Buildings and ultimately Smart Cities.

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6 About ThroughTek

Established in 2008, ThroughTek Co., Ltd. is a world leading solution provider in the IoT (Internet of

Things) & M2M (Machine to Machine) with its Kalay Platform. Based on extensive experience in the

integration of P2P connections in surveillance systems, ThroughTek applied this leading technology

to assist the entry of enterprises into IoT and M2M markets, transforming the business into an M2M

and IoT solution provider in 2012.

ThroughTek is committed to the development of online internet platform solutions and further

delivery of innovative and convenient user-oriented total solutions. Their Kalay Platform leverages a

wealth of APIs (Application Programming Interface) for a growing variety of operating systems,

quickly and easily incorporating a wide variety of devices into online application. The range of Kalay

Platform enabled applications includes surveillance, personal cloud storage, smart homes, and

consumer electronics.

ThroughTek has successfully initiated a specialized ad-hoc online (peer-to-peer) technology to

provide optimum overall solutions. Looking forward, the company is currently cooperating with IC

design companies, telecom operators, and home appliance manufacturers for continued

implementation of vertical integration into the marketplace.

Please visit the ThroughTek website at http://ww.tutk.com

7 About Machina Research

Machina Research is the world’s leading provider of market intelligence and strategic insight on the

rapidly emerging Machine-to-Machine (M2M), Internet of Things and Big Data opportunities. We

provide market intelligence and strategic insight to help our clients maximise opportunities from

these rapidly emerging markets. If your company is a mobile network operator, device vendor,

infrastructure vendor, service provider or potential end user in the M2M, IoT, or Big Data space, we

can help. We work in two ways:

Our Advisory Service consists of a set of Research Streams covering all aspects of M2M and

IoT. Subscriptions to these multi-client services comprise Reports, Research Notes,

Forecasts, Strategy Briefings and Analyst Enquiry.

Our Custom Research and Consulting team is available to meet your specific research

requirements. This might include business case analysis, go-to-market strategies, sales

support or marketing/white papers.

Machina Research’s Advisory Service provides comprehensive support for any organisation

interested in the Internet of Things (IoT) or Machine-to-Machine (M2M) market opportunity. The

Advisory Service consists of thirteen Research Streams (as illustrated in the graphic below), each

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focused on a different aspect of IoT or M2M. They each provide a mixture of quantitative and

qualitative research targeted at that specific sector and supported by leading industry analysts.

Advisory Service Research Streams [Source: Machina Research, 2014]

Machina Research’s analysts also have a wealth of experience in client-specific consultancy and

custom research. Typical work for clients may involve custom market sizing, competitor

benchmarking, advice on market entry strategy, sales support, marketing/promotional activity, and

white papers.

For more information, refer to our website at https://machinaresearch.com, or email us at

[email protected].

.

https://machinaresearch.com/

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