The Internet of Things promises to usher in fundamental changes in all sectors of the electrical industry. Jacob Harris takes a closer look at the technology to see how contractors stand to benefit.

The Internet of Things (IoT) is coming and, whether we like it or not, this new level of connectivity is destined to make a significant impact on all sectors of the electrical industry. From residential products that perform simple remote monitoring tasks to complex industrial systems that increase productivity while reducing expenditure, the IoT is promising to be a truly disruptive technology that will fundamentally change the way we live and work.

“The overall concept of the IoT is that everything, no matter what it is, can be connected and controlled. What we are seeing residentially is an absolutely huge array of cost effective, wireless products to do home automation,” says Perth-based home automation integrator Ryan De Rozario.

“These products cover what we have always been able to do with automation but at a much more accessible price point, making them attractive to a wide range of people – not just those building luxury homes.”

If opportunities presented by the uptake of IoT technologies are to be leveraged effectively however, contractors will need to adapt their skill-sets to include a higher level of knowledge regarding communication protocols and the like.

“Better knowledge of how IoT devices interface is going to become a key driver and a change, not just in skill-sets, but also in business approaches will be required. As these different devices become more connected, the importance of partnerships and platform approaches between businesses also becomes more important,” says director process automation offer management and business development Schneider Electric Pacific Brad Yager.

“We need these various systems to integrate. If we don’t have open standards and open dialogue between the people producing these separate systems – vendors, installers, electrical contractors and asset owners – it’s not going to work.  So different methodologies of business practice will become a key skill-set required going forward as well and the ability to interface the physical devices themselves.”

According to Brad, industry demand for contractors with IoT knowledge is there now. Demand for IoT technologies across all sectors is increasing almost exponentially although whether or not the market can accommodate that demand is yet to be seen.

“With the introduction of products that give users the ability to monitor their power consumption in real-time, consumers are going to see a baseline of electricity consumption when everything’s switched off because of standby mode. This will cause people to start choosing different products based on their standby consumption – not just the consumption when they’re using it – and contractors who can articulate that change of thinking to consumers are going to get more work than those who can’t.”

Before we know it, the IoT will become the new normal. 20 years ago it was uncommon to see someone with a mobile phone, now almost everyone owns not just a mobile but a smart phone. Soon enough, the IoT will be ingrained in everything.  Everything we buy, produce or install will be IoT enabled.
Residential

As the role of the IoT in the residential electrical industry expands, knowledgeable contractors are well positioned to take full advantage of this growing market. But in order to leverage this effectively, a thorough understanding of the IoT and the technologies that underpin its operation is of paramount importance.

Effective installation of an IoT framework hinges on a reliable network built with quality hardware. Unlike the network types most people are familiar with, such as Ethernet and WiFi, many of the major IoT players use either ZigBee or Z-Wave networks for their wireless devices. It’s the implementation of these networks contractors who are interested in working in the IoT space should become accustomed to.

Indeed, a comprehensive understanding of networks is a fundamental requirement when implementing IoT technology. According to Ryan, if a contractor can’t deliver on the network hardware and setup then they won’t be able to deliver an IoT solution.

“We certainly wouldn’t consider touching an IoT install unless we were wholly responsible for the design and implementation of all network hardware. When something falls over, the last thing the client needs is two contractors warring over where the fault lies – and it can get quite grey with networks. The best thing a contractor can do for a client is take complete ownership of the network when the provided solution relies on it. “

As the number of consumers familiar with the IoT increases exponentially, so too should business opportunities for electrical contractors.

“We are finding customer awareness of the IoT is rapidly gaining traction. People are starting to ask more about what their houses are capable of. This isn’t just the young tech savvy demographic either, we find baby boomers are now becoming very interested in what they can do with their new favourite, easy to use toy – the iPad,” says Ryan.

Even contractors who decide that providing the IoT and network solutions isn’t for them should make sure they are running hardwired data infrastructure to anywhere they have installed fixed devices and ensure they allow adequate connections for wireless access points.

“With the likes of Samsung and Apple behind it, the IoT isn’t a flash in the pan; estimates on what the industry is worth globally in the next 10 years are well into the trillions. If it was my business, I would want a slice of that pie!”

Commercial

In addition to being a rapidly growing market within the residential electrical sector, connected devices are becoming big business for electrical suppliers and commercial contractors.

”Over the coming years, products that are incapable of communicating, acting on information transmitted to them or being remotely actuated will be the exception. This is set to change the landscape for electrical contractors, creating massive opportunities for those who position themselves cleverly,” says Legrand Australia chief executive Tony Berland.

Tony cites the Australian IoT @ Home Market Study undertaken by Telsyte that forecasts spending on IoT home products and services in Australia will grow from $289 million in 2015 to $3.2 billion in 2019; an 11-fold increase.

Possibly one of the largest areas in the commercial market to be affected by the IoT is emergency lighting and energy efficiency.

The IoT will make monitoring and communicating with emergency lighting much more efficient.  It is a requirement for businesses to keep records of testing of emergency lighting as per AS2293 and, according to Legrand, the IoT will provide significant advantages by enabling businesses to store test reports in the cloud and access them remotely from any location. Users will also be able to monitor and test their emergency lighting installation from anywhere in the world

In the energy efficiency sector, the IoT can provide facilities managers with real-time information on total energy consumption in their commercial installation broken down into sub-categories relevant to that installation. This information can then be used to identify potential areas of further energy savings. The IoT is also powerful in the sense that it can take all these inputs and fully automate room management while allowing for manual intervention via mobile devices.

Industrial

When the IoT is applied to industry it is commonly referred to as the Industrial Internet of Things (IIoT). It is currently making its presence felt in several industry sectors by helping to streamline operations and identify inefficiencies. In November 2015, Schneider Electric surveyed approximately 3,000 business leaders in Australia and overseas and compiled a sizable report named IoT2020.

IoT2020 identifies three key areas in which the industrial processes can be streamlined by incorporating IoT functionality.

“The first area is asset performance. We talk about the IoT but, from an industrial perspective, these connected ‘things’ we’re talking about are ‘assets’. One of the big changes in perspective that will be heralded by the IoT is an increased focus on the complete lifecycle cost of assets as opposed to their immediate, up-front cost,” says Brad.

In industry, buildings and even in our own homes this is becoming more and more relevant. The actual lifecycle costs of an asset can be much more (15-20 times more) than the upfront purchase cost and as things become more commodity-driven, lifecycle costs become more important.

The ability to monitor, measure and articulate what an asset’s lifecycle costs are and then have a measure of control over that is what becomes really important: a specific focus around performance over the complete lifecycle of an asset.

The second key area outlined in the report is operations. The uptake of the IoT, combined with an increasingly transient workforce, is causing many businesses to rethink traditional knowledge hierarchies and operational frameworks.

“We can’t rely on the models of yesteryear any longer. Businesses often used to have long-term employees who knew their company’s system back to front – they were the unofficial decision makers and the people who would bring new employees up to speed – those guys are starting to leave and the new guys coming in have only been there a couple of years and will probably be moving on in a couple of years because we have a more transient workplace. This means the smarts now have to be into the systems themselves,” says Brad.

Systems with built in smarts can provide automated direction to relatively inexperienced operators; enabling actionable insights to be made by delivering crucial information at a specific time and location.

“Getting the piece of information to the operator right when they need it – instructions to conduct a preventative maintenance task as they’re walking past the relevant machine for example – can make all the difference on whether IIoT systems make a positive impact on processes or just generate useless data. It’s not about the information itself but the actual actions the information drives,” says Brad.

The third area where industrial processes can be streamlined according to IoT2020 is the creation of an enterprise control layer that combines all the various aspects of the business.

“Previously, individual silos have all had separate supply chains – the product lifecycle people are only concerned with their department, the customer relationships department only deal with customers etc. Now we can bring all that information in and combine it at an enterprise level which is where you get some extreme value.

“An interesting example is what’s happening with supermarket milk. People aren’t buying the generic, home-brand milk anymore. They’re all buying the branded milk and the supermarkets can’t meet up with demand. However, if the supermarkets had a really smart IoT system that could have forecast that shift – if customer relationships had identified there was going to be a major shift in customer buying patterns prior and immediately, without a manual interaction, fed that information into the supply chain – there would have been milk on the shelf ready to go,” says Brad.

There can be no argument that the IoT brings a lot of rewards but there is no reward without risk. Greater connectivity inevitably creates a higher level of risk in the cyber security space.

“In the industrial IoT world, it’s the operations that need to be prioritised. So protecting the operations of all these connected devices is going to be something that becomes very important and certainly ingrained in our thinking,” says Brad.

“I think cyber security will be the difference between those who are successful and those who just try to jump on the IoT bandwagon and leave their poor customer exposed.”