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John O'Rourke, president and CEO of Sigit Automation, at an oil well site near Calgary on May 21, 2015. (Todd Korol for The Globe and Mail)
When a category five tornado ripped through Moore, Okla., on May 20, 2013, John O’Rourke’s small crew of six workers found themselves in trouble.
Mr. O’Rourke runs Calgary-based Sigit Automation, a small company that does IT work on oil and gas wells. Communicating through regular channels was nearly impossible after local cell and phone networks were knocked out by the devastating twister that killed 24 people and injured another 350. Luckily, his two half-ton trucks were equipped with fleet tracking equipment from GEOTrac Systems Inc. GEOTrac’s gear enables remote workers to send and receive text messages on a dashboard-mounted navigation device, through a satellite-powered GPS network, meaning no cell signal is required. After a few frantic hours, Mr. O’Rourke’s workers managed to get to safety.
It’s a dramatic example of what the array of signals technology sometimes called the Internet of Things can do for businesses. Simply defined, IoT is about connecting objects, from trucks to refrigerators and hydro meters, to the Internet. Data gleaned from the sensors and systems applied to these objects can then be used to monitor, control or redesign business processes.
The projections are huge: Networking equipment titan Cisco Systems Inc. believes IoT represents a $19-trillion (U.S.) global market and predicts that 50 billion devices will be connected to the Internet by 2020.
Most often Canadians hear about IoT in the context of wearable devices: things like the FitBit that promise to improve health and wellness, or more fully featured devices like Apple Watch and Google Glass that also extend such smartphone functions as messaging or Web searching. But while consumer technology is a hot area, IoT will likely have a greater impact in the less sexy parts of the economy: manufacturing, resources and energy, utilities and civic services.
Research from IDC Canada projects spending on IoT in Canada will reach as high as $6.5-billion (Canadian) by 2018, up from $2.8-billion in 2013. Tellingly, this year marked the research firm’s first attempt to forecast a Canadian market for IoT, and it acknowledges a lack of historic comparison could skew the predictions.
“Canada is actually lagging in IoT growth, behind both the U.S. and Asia-Pacific,” says Nigel Wallis, an IDC Canada Internet of Things analyst. “Everyone wants to be a fast follower, not a leader.”
Mr. Wallis says Canada is among the world leaders in tele-health, which connects remote communities with medical experts at big-city hospitals like Toronto’s Hospital for Sick Children or Mount Sinai. GEOTrac and other fleet services have captured about a third of the oil and gas market in Canada. But there are more examples where we lag behind: When it comes to factory automation, Germany, Japan and some parts of the United States are in the lead, and Western Europe is further advanced with intelligent monitoring of emergency response workers.
A recent IDC survey highlighted one of the key issues with IoT: acceptance. Mr. Wallis says about 15 per cent of Canadian executives surveyed understand the case for IoT, and another 20 per cent think it has the potential to transform their entire enterprise. However, 42 per cent remain on the fence, largely because they have no way to calculate return on investment; the solutions are too new or at least new to their industry.
While those executives stay on the sidelines, the world’s technology firms are sprinting to own the market. Global giants Cisco, GE, IBM and Intel are in competition with Canadian players like BlackBerry Inc., which unveiled its IoT solution market in January. The Waterloo, Ont.-based company pitches its security reputation as part of its platform for connected vehicles, as well as shipping and asset tracking. At the same time, a constellation of smaller startups are racing to develop niche solutions for manufacturers, restaurateurs, building managers, utilities, oil drillers and smart homes.
Mr. Wallis describes four feverishly expanding segments: makers and installers of physical sensors; connection providers (land line, wireless, telecoms, etc.); storage and security hardware and software (server farms, the cloud) to hold on to and encrypt all the collected data; and finally the data analysis software. Some companies do all that in one solution; others focus on one piece of the spectrum.
“There are Canadian companies in a whole bunch of those different plays,” he says. Knowing how many of them there are at any given moment is tracking a moving target: “Globally, every three weeks there’s either an acquisition or a new company started up.”
‘A massive shift’
Depending on your preference, you could call these systems IoT or Machine to Machine (M2M) or even The Internet of Everything (Cisco Systems’s twist on the slogan). The concept has been around for decades: In one of the first examples, students at Carnegie Mellon connected a Coca-Cola machine to the Internet back in 1982 (so they could check if their soda would be properly chilled). But even as the concept turned into reality in the past decade, the predicted IoT boom has yet to reshape the economy.
“I don’t think there’s a lot of naysayers, but this is still a massive shift,” says Stephen Gardiner, managing director of Accenture Digital in Canada, which consults on and helps implement IoT systems. “The integration of sensors, devices, connectivity and analytics into a business process … that’s very difficult for many of our clients to accomplish on their own.”
So far, the scale of the transformation required seems to be the most daunting feature of IoT for many Canadian companies.
One of Canada’s only IoT-focussed venture funds thinks the country has one unfair advantage over some of the global players: An advanced resource economy and vast geography offer a unique testing ground for Internet of Things companies.
Toronto’s McRock Capital only recently finished raising its first $65-million but has been tracking about 350 Canadian companies working on IoT solutions. The firm focuses on industrial companies, where co-founder and managing partner Scott MacDonald believes Canadians are primed to excel.
“The next thing to do is to go into the field,” he says. “We understand manufacturing in this country, we have natural resources…. If we’re going to compete on a global stage, go after what we’re good at.”
According to Accenture’s research, companies like mining giant Rio Tinto that invest in IoT are seeing productivity increase by 20 times at major field sites. In some parts of Canada’s oil patch, the investments have already been made.
“We did IoT stuff before it was labelled that way, in oil and gas it was called SCADA [supervisory control and data acquisition],” says Yogi Shulz, a partner with Calgary-based Corvelle Consulting. “The Internet has contributed hugely to squeezing more value out of the SCADA data: 20 years ago it was hard to move that data around, the tools for analyzing were not that good. It was a nightmare. ”
He says Canada’s oil sands are rich soil for IoT applications, estimating that 80 or 90 per cent of Steam Assisted Gravity Drainage drilling (SAGD) wells are connected so engineers can get real-time temperature and pressure readings.
“When you have better data,” Mr. Shulz says, “you can produce more oil.”
Source : https://www.theglobeandmail.com/technology/internet-of-things/article24668935/