By Charlie Ashton, Director of Business Development at Wind River

The Internet of Things (IoT) is a topic that’s been increasingly coming up when we talk with telecom service providers about their Network Functions Virtualisation (NFV) plans.

Some say the IoT will be a drag on network resources. Others consider it a major opportunity for innovative new services. Perhaps it’s both.

Forecasts for IoT devices active by 2020 range from 25 billion (Gartner) to 75 billion (Morgan Stanley).

In any case, there’s no doubt that the number of new devices connecting to service provider networks will jump exponentially. So what’s the implication for service providers and the network itself as these IoT devices come online?

First, it’s important to understand that the majority of “IoT-enabled” devices actually don’t need an internet connection at all, though they may be generating data which potentially requires network capacity.

Sensors used in applications like home security, industrial control, connected cars and health monitoring typically connect locally with peer devices and/or with gateways. Mostly, it’s the control systems that require an Internet connection.

This reduces the number of devices connecting to networks by at least an order of magnitude, though we’re still talking about billions of new connections by 2020.

Once it reaches a service provider network, IoT traffic will present unique challenges.

Compared to regular internet traffic, the IoT will support so many different use cases that service providers will need to cater for a range of needs (from chatty, low-bandwidth connections to high-bandwidth persistent connections).

NFV is key to providing the flexibility to address these diverse requirements.

Experts disagree widely on the bandwidth impact of the IoT. Some project the overall amount of IoT traffic will be negligible compared to today’s video-heavy internet traffic.

Others believe that once the IoT becomes pervasive, new use cases will emerge and traffic will explode.

Rather than raw bandwidth, the biggest network-related issues will be security, privacy, availability and latency.

As IoT devices become more prevalent, their usefulness will lie in their awareness of increasingly personal information, as in the case of health applications.

Service providers will need to implement sophisticated security systems to satisfy both consumer and enterprise customer needs.

Network availability will be critical for many IoT applications, such as in critical infrastructure systems like industrial control, emergency, healthcare and security are going to be sending time-critical traffic.

For these systems, the network must be up and typical enterprise-class availability (three-nines or 99.9 percent up uptime) won’t be adequate.

These services demand the six-nines reliability (99.9999 percent uptime) achieved by telco-grade networks.

The latency (and jitter) of service provider networks can have a strong impact on the usefulness of IoT applications.

If you’re driving a connected car and expect traffic light sensors to react to your presence, a one second delay at 70 miles an hour means that you’ve travelled 100 feet. A lot can go wrong in that moment.

Quality-of-Service (QoS) segmentation will allow service providers to position (and price) different service levels for different use cases.

All these issues point to the need for highly reliable, low-latency, secure infrastructure platforms in service provider networks optimised for IoT traffic.

So how can a network be more than a “dumb pipe” and add real value using data from IoT devices?

One way is by intelligently determining when and what data is upstreamed.

Sophisticated gateways will segment their IoT traffic between information that must be transmitted to the cloud in real-time and data that can be stored and transmitted during low-cost bandwidth, for offline analysis.

This allows intelligent gateways to avoid constantly pumping massive amount of data “northbound,” overwhelming the network and storage infrastructure. It also enables them to provide different QoS for different payloads.

A revenue-generating opportunity is the use of analytics to monitor and predict customer behaviour, while assessing the state of the network.

This can lead to automating the upselling and pricing of services, such as temporary bandwidth expansion or ultra-low latency connections.

Finally, service providers are also talking about the value of “contextual knowledge.”

Between their network infrastructure and their OSS/BSS systems, they capture continuous information about customers’ location, characteristics of their network traffic and even the applications that they run.

They have a unique business opportunity to turn this knowledge into value-added services.

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