What’s the buzz with the IoT? (Image: Getty/Leonie Hayden)
What’s the buzz with the IoT? (Image: Getty/Leonie Hayden)

PartnersNovember 12, 2020

The technology that’s saving businesses millions of dollars

What’s the buzz with the IoT? (Image: Getty/Leonie Hayden)
What’s the buzz with the IoT? (Image: Getty/Leonie Hayden)

The Internet of Things can create tiny efficiencies that amount to a lot of money. Ben Fahy reports on how the IoT is changing the way businesses work.

Back in the 1830s, a depressed minister from Massachusetts named Lorenzo Langstroth got into beekeeping as therapy. His hobby eventually led him to develop the moveable comb hive, an innovation that allowed honey to be harvested without destroying the colony of bees. Since then, the art of beekeeping hasn’t changed much, but Bruce Trevarthen, the founder and CEO of the LayerX group, thinks some smart technology and a bit of connectivity might be the next big bee-based breakthrough. 

ModuSense, a division of the Hamilton-based tech company/incubator, focuses on providing industrial Internet of Things (IoT) solutions, particularly for the primary sector. But when it kicked off around four years ago, Trevarthen felt that target was still too broad, so he decided to focus on improving the productivity of one sector in particular: apiculture. 

He went much further than most technologists, however. He actually learned how to become a beekeeper and put three hives on his property so he could see firsthand what kinds of problems they were likely to experience. Then he set about creating the technology that could help solve them. 

When you look at some of the numbers, you can see why he was keen to help: standard honey sells for between $3 and $10 per kg, but Mānuka honey sells for between $100 and $200 per kg, so small gains in each hive add up to a lot of money. 

(Photo: supplied)

Mānuka honey hives usually have to be placed in very remote locations which means often the only way to get them there is to drop them off by helicopter. Because they’re so difficult and expensive to access, the only option for beekeepers is to then come back a few months later hoping for the best. To address this, Trevarthen and his team developed connected scales that are placed under the hives to measure how much honey has been produced (or, in some cases, whether the hive needs to be topped up with food to stop the bees from starving) and transmit that information via the cellular network or by satellite. 

He tells the tale of a client with around 1,000 Mānuka honey hives north of Gisborne who installed a range of ModuSense sensors in its hives around two years ago. Recently, just before they were about to take the scheduled helicopter ride in to collect the hives, the scales showed the weight increasing again. That meant they were able to delay the pick-up for a few days and, in that time, they produced an additional five tonnes. That decision was worth around $1 million. 

“Data is information. And that information gets turned into knowledge and wisdom,” he says. And that knowledge and wisdom, as seen in the example above, can lead to money-making (or money-saving) interventions. 

Weight is just one metric, however. Another sensor can check that a hive is at the right temperature, while sound sensors can assess the speed of the bees’ wing beats and tell if they’re in good honey-making form. This type of analysis, he says, is just one of many examples he’s seen of precision farming gradually becoming normal farming and it’s something being enabled by “a convergence of capability” in IoT: better and cheaper hardware, better and cheaper software, and better and cheaper connectivity. 

“Things are possible now. There are so many amazing use cases,” says Trevarthen. “And the appetite to measure is going up. If you’re not measuring your resources or getting information, you just don’t know where you’re at.”

(Photo: supplied)

Get smart

According to a study by the IoT Alliance, more stories like this could equate to $2.2 billion in net economic benefit for New Zealand over the next 10 years. And while 70% of New Zealand businesses believed IoT will be transformational or strategic for their business, only 14% of businesses have actually deployed an IoT solution. 

That survey was done a few years ago, but business is all about doing things slightly better (and, in many cases, cheaper) than your competitors. And because IoT can help you do that, understanding how to harness your data is becoming a competitive advantage. 

“What you want to focus on is the data you’re going to get, not on building a device,” says Paul Caples, an IoT product manager at Spark. “The sooner you get to the analysis of data, the sooner you’re proving the business case and the value of the investment.” 

He says customers that have already started down the IoT road already understand the value it can add and want to do more, faster. And the feeling of corporate fomo is leading to competitors exploring those possibilities as well. 

“Once that cycle starts and they see the improvements, they want the next application; they want to find the next logical thing to do. It’s no different than the adoption of enterprise software in the 80s: at some point it just became the standard to have HR, payroll, or CRM software. And we’ll get to the point where businesses who don’t have [IoT] systems will be left behind.” 

Paul Caples, IoT product manager at Spark (Photo: Simon Day)

A penny saved is a penny earned

Trevarthen says the cliche of doing more with less is even more relevant now given the economic concern created by Covid-19. With boards and investors increasingly asking businesses what their next innovation and efficiency plays are, IoT is becoming more relevant. He points to a company that used to make around 150 phone calls a day to see if their valuable assets had turned up at their destination. Now that task is automated and able to be looked at in real-time on a screen. 

Asset trackers like this are no brainer for businesses, says Caples. It doesn’t matter what kind of company you are – whether you’re shipping freight, growing crops or visiting clients in a fleet car, he says you can find a use for them. 

“I was out visiting someone from a large logistics company recently to look at their operations and they were using RFID scanners. These are the scanners that show things coming in and going out and he looked up and said ‘ahhh, it’s not switched on again’. They cost about $60,000 a pop. You’d think they’d care. But it didn’t really meet their needs that well. Now you’ve got a whole range of ways to achieve those outcomes, a lot more affordably, and that’s when they start to look at IoT more seriously.” 

Bruce Trevarthen (Photo: supplied)

The whole truth 

Kennards, an equipment hire company, has invested heavily in IoT solutions to ensure their assets are looked after. It’s allowed the company to ensure their fleet is being used in the way it should be and have much clearer communications with their customers, says Caples.

“If you’ve hired out an item and there’s an expected use around that item and you see it’s working outside the bounds of what it should be doing – like the engine revving too hard or the machine being used for too long, anything outside the parameters – then you have recourse to have a conversation with the hirer and you can make clear decisions around that. It gives you visibility.” 

Rental car companies can also keep track of whether a vehicle has been taken into a restricted area. Temperature sensors can be used to make sure freight companies transport valuable goods in specific conditions. 

“If your meat needs to be kept at negative 18 degrees as it travels across the ocean, how do you know that’s happened? … Where faith fails, monitor,” Trevarthen says, perhaps capturing the essence of IoT in just four words. 

A sensor that costs around $500 can record the temperature on a long journey and Caples says trials are being conducted with printed stickers that cost about $5 and can be stuck on an asset to provide basic information. 

“As the price point for the devices drops, the market for its use increases exponentially,” Caples says, and the price of connectivity has been on a similar downward trajectory. 

Trevarthen says it’s much easier to ship a username than a tonne of milk and he’s understandably rooting for the New Zealand tech sector, especially given what’s happened to tourism. But what he enjoys about IoT is that there’s a bit more of a barrier. 

“There needs to be good software and good hardware. It’s physical and virtual and it’s also a volume play.” 

For example, there are approximately 91 million beehives around the world and he’s hoping to get his sensors into a good number of them. As such, the opportunity for other sensors to be implemented widely in large industries makes it appealing to investors, he says. 

There are approximately 91 million beehives around the world waiting to have their efficiency increased (Photo: supplied)

Safety in numbers

The Internet of Things is also helping to ensure businesses are complying with government regulations and even judging if a business is a good candidate for a loan. 

“The amount of data farmers have to provide on things like yield, effluent run-off, the amount of nutrients being deployed … that all adds into the information that banks are looking at when they’re backing these people. You have to meet compliance requirements for operating,” says Caples.  

And while that might seem onerous, new monitoring technology actually saves time because the devices collect and transmit that data automatically when it once would have had to be collected and compiled manually. So as well as enhancing efficiency, the more accurate picture that IoT offers is also helping to protect the environment and hold businesses accountable. As the old business axiom goes, you can’t manage what you don’t measure. 

Let the right ones in

Technologists often see the benefits of opening things up and removing friction, but don’t tend to see all the pitfalls. And there are plenty of concerns among security experts that some of the 100 billion devices that are expected to be connected to the internet by 2025 will be compromised.

Caples says security should be part of the procurement process and he says it’s crucial to get onto it early to make sure that any set-and-forget devices that have known vulnerabilities are patched as soon as possible. No-one wants their smart toaster to be turned into a spambot or, as Black Mirror imagined, their robotic bees to be turned into killing machines

The reliability of some IoT devices has also been an issue, especially those that need to operate in harsh outdoor conditions. But that’s changing fast. 

“Five or ten years ago, it was a problem,” says Caples. “But the devices and sensors are third or fourth generation iterations and the people making the devices have understood what sensors deliver the best outcomes.” 

A simple example is bin monitors. There was all kinds of sensor-based tech thrown at that problem. And in a lot of instances, the sensors didn’t work, they weren’t particularly accurate, and they wouldn’t last the distance. 

“Now we’re at a point that you can be confident they will work. They have the scars of real world implementation behind them. So the people who come in now, they miss a lot of those early pains.” 

When Trevarthen launched the company’s first beehive scale it was two-and-a-half times more expensive than the scale offered by its main competitor, which had a reputation for unreliability. But customers didn’t care about the price because it always worked and when the data becomes valuable enough to justify that extra cost and ensure they can get access to it, he says businesses will always be happy to pay top dollar. 

Low-power networks that mean devices can last for ages without maintenance and new chips that can harvest enough energy from their environment so that you don’t even need a battery are making it even easier for businesses to gain insights. 

Quality over quantity (Photo: supplied)

It’s a gas

Trevarthen believes the next phase of IoT will be less passive. It won’t just be about sucking up billions of data points for manual analysis and intervention. It will be about artificial intelligence and machine learning improving enough that they can make decisions for us, like turning off a water pump on a remote part of the farm to save water if it detects an anomaly, or driverless cars running on 5G that can communicate with each other applying the brakes if they are alerted to an event up ahead. Caples see a future where you may be able to get your traffic light infrastructure to the point where you don’t even need traffic lights. 

Everyone’s rightly concerned about privacy (while also freely providing their personal information to large tech companies). But Caples, whose favourite in-home IoT function is the security system that allows you to tune in and see what’s going on, believes the camera will mostly be used as an input that can detect numbers of anonymised people, or learn to look for certain events (like a driver falling asleep at the wheel) so that the system can intervene. 

Perhaps unsurprisingly, given the focus of his own business (and his beekeeping), Trevarthen has also embraced IoT in his own home. It was built around three years ago and is “automated rather extensively”. An array of Amazon Alexas are dotted around the house so that it can mostly be operated by voice while a range of sensors limit energy wastage. 

One of his goals was to never have to pick up a remote. He wanted to set the technology up so that the house would function with them in it, rather than require them to actively make the house function. And, just like his smart house, smart companies are also finding that their business functions better when IoT is built in. 

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