Building the Internet of Things. Kranz Maciej

change has been constant. Every three to seven years, organizations had to reinvent themselves. Companies that missed one technology transition could possibly recover if they scrambled to catch up. Those that missed two, however, most likely perished. Interestingly, according to The Boston Consulting Group, when you look at the roster of S&P 500 companies from 50 years ago, only 19 percent are still in existence.2 The rest have perished.

      As the S&P 500's mortality shows, we're so used to change that we barely notice it occurring. Remember tape recorders, CDs, VHS tapes, and answering machines? The advent of each changed society in substantive ways. When I asked my children about CDs and VHS tapes, I got blank stares. What about home telephones? I recently met a teenager who didn't recognize a telephone busy signal when she heard it; she had never experienced the phenomenon. When it was explained, she was baffled. Everyone has voicemail and call waiting, she insisted. Tape recorders, CDs, VHS tapes, and answering machines are maybe 30 years old, and yet they're not only obsolete but also now forgotten. Their replacements are now integrated into your smartphone. Society and business keep moving forward.

      This is as good a point as any to tell you about me, your author. Obviously I'm a father with a bunch of kids, but what's important to you is my experience with IoT. My IoT journey started 12 years ago as a manager at Cisco when several of us flew to Cleveland and started working on industrial Ethernet switches together with Rockwell Automation. It was a challenging assignment for our team, encompassing a completely new set of requirements, certifications, and accommodating so many ruggedized systems versions, but we got things to work. A few years later, we decided that the time was right for Cisco to focus on the industrial networking segment, and we created the Connected Industries Group, which I ran. We also decided to adopt the IoT term to describe the phenomenon of everything connecting to everything. Anyway, this is how I started.

      From there our plan for IoT was to expand our ruggedized infrastructure portfolio, develop vertical solutions expertise, build a partner ecosystem to augment our own skills – even then we realized that IoT would be bigger than any one organization could do on its own – and offer a platform for real-time analytics and vertical applications. We also evangelized IoT to the rest of the industry with the goal of getting them excited about its potential so that together we could turn the IoT vision into a huge market opportunity for everybody. Judging from the latest independent industry projections of billions of connected devices in just a few years and trillions in revenue, it has worked out pretty well to date. The important part, however, is that we have started to deliver on that promise. Now, if you haven't done so already, I hope that after reading this book you will join us as well by introducing your organization to IoT and participate in the IoT economy.

      Today, the pace of change is more than a constant; it's the new status quo. The Millennials now entering the workforce know only unrelenting change. To them it's a way of life, one that will likely continue for the rest of their lives. But no matter our actual age, we are all part of a generation poised to encounter revolutionary change. That's why I call what we're experiencing in every business segment Generation IoT.

      So how does your business survive in this environment? How do you avoid the mortality we've seen among the S&P 500? That's what this book is about – understanding this emerging change that has just begun to sweep over us and finding a strategy that will ensure your business and your career not only survive but thrive. The winners in this new era will recognize the changes occurring around us and be willing to adjust and re-learn, over and over again. They are Generation IoT.

      So how do we spot these winners? You belong to Generation IoT if you embrace open standards, open collaboration, open communications, and open, flexible business models and you're willing to assemble a comprehensive partner ecosystem to build and deploy agile, flexible business solutions. The losers, however, will insistently stick to the old ways of doing business or try to do it all themselves. We've seen them many times in the past. They run their operations on proprietary or semi-standard technologies and adopt business models that lock in customers, ultimately destroying whatever value they initially delivered.

      Need another example of IoT-led transformation? How about Ford Motor Company, a major U.S. automaker? It hasn't been long since the company together with its peers was on the ropes during the financial crises. Today, Ford has smartened up and changed processes. Of its 40 vehicle assembly plants, 25 now use IoT technology to speed communications within and between them. Plants around the world are now connected to the Ford enterprise network. Moreover, its next-generation automated vehicle scheduling system manages production in real time, handling more than 2 million variations. As a result, Ford is selling more cars than ever before. Thank you, IoT.

      First Step on IoT Security Journey

      The ability to deal effectively with security threats is the number 1 make-or-break factor for IoT adoption. Without it, companies will be reluctant to implement IoT and thus not benefit from the growing number of powerful use cases emerging across all industries.

      The industry recognizes the challenge and is making it the top priority. IoT security is starting to be integrated into the very fabric of both industry and public infrastructure, including fundamental areas such as transportation and logistics, power grids, water supplies, and public safety. However, much more needs to be done. We still lack skills, education, and awareness. Many companies continue to be in denial, still relying on a discredited physical separation approach to securing their plants and infrastructure. The OT and IT divide prevents the companies from implementing modern and proven security best practices.

      So how should organizations start to approach IoT security? According to Verizon's “2015 Data Breach Investigations Report,” most security breaches exploit well-known vulnerabilities where companies have not applied available fixes. The first step, therefore, is to implement existing best practices by following these three sets of guidelines:

      ■ Adopt a single policy-based security architecture built on an open, unified approach with automated, risk-based self-defense and self-healing capabilities.

      ■ Converge around standards. Vendors and enterprises alike need to leverage IT industry standards and best practices in OT and to fill in the gaps between industry-specific and horizontal standards organizations.

      ■ Collaborate. OT, IT, information security teams (CiSO), together with vendors and consultants, must work together on common architectures, incorporating not only OT requirements into the IT provider's product portfolio but also supporting form-factors, up-time requirements, and integration with legacy industrial protocols. Security isn't your differentiation; it's your foundation. Therefore, let's learn and share together.

      Yes, IoT is different than IT in many ways: it is more distributed, more heterogeneous, and more dynamic. There are many new IoT scenarios that require brand new approaches to security. We will explore them in more detail in Chapter 9. But the first step on the IoT security journey is to leverage 30+ years of experience and best practices that IT security systems give us. So let's not reinvent the wheel.

      A Revolutionary Economic Opportunity

      Many of us view IoT as the next stage of the Internet/Web that uses the Internet protocol–based (IP-based) distributed cloud to connect anything to anything. According to Vernon Turner, senior vice president of enterprise systems and IDC Fellow for The Internet of Things, “Think of IoT as a network of uniquely identifiable things that communicate using IP connectivity without human interaction.” Pretty straightforward, huh? Some people, including me, extend this definition into what some call the Internet of Everything (IoE), a term first coined by Cisco, or even to the digitization of smart assets. IoE brings together the people, processes, data, and things that make networked connections more relevant by turning information into actions. For the purposes of simplicity and clarity, this book refers to both IoE and IoT as IoT – in effect, treating the two terms as synonymous.

Here's an easy way to think of what's going on: The first stage of the Internet connected people to networks, data, each other, and processes. With IoT, we're now connecting anything with anything – or, if you prefer, everything with everything. In short, anything that can be digitized can be part of IoT. The business

2

Reeves, Martin, and Lisanne Pueschel. “Die Another Day: What Leaders Can Do About the Shrinking Life Expectancy of Corporations.” The Boston Consulting Group's bcg.perspectives, July 2, 2015. https://www.bcgperspectives.com/content/articles/strategic-planning-growth-die-another-day/