Winds of Change

Safety and Security in the times of the Internet of Things

12.03.2018 - Shopping for analogue video cameras is a real challenge today. Virtually every camera on the market is digital, be it from traditional vendors or from newcomers who have never deve...

Shopping for analogue video cameras is a real challenge today. Virtually every camera on the market is digital, be it from traditional vendors or from newcomers who have never developed analogue in the first place. And while cameras have clearly led the trend towards digitization and standard based networking in the security industry, door controllers, fire panels, public address and intrusion detection systems were not slow to follow. Connected and centrally managed security solutions are just too promising, enabling higher security levels through event correlation as well as faster and more targeted incident response. Using existing IP networks instead of proprietary communications links adds the opportunity to lower both investments and operating expenses as does central management of the entire connected solution. Digitization has been the most dramatic change in the security industry in more than a century, but the journey has only just begun. Enter the Internet of Things (IoT).

While most security solutions consist of networked subsystems today, the majority still represents a closed solution with maybe a few external connections for remote monitoring, remote maintenance and alarming purposes. The IoT will dramatically change this situation, and it has already started to do so. With everything being connected to everything, new applications will arise and new risks will have to be addressed. Already today we see cloud security services being offered, which can be very efficient for small and even for larger enterprises. On the other hand we have recently seen how malware like Mirai and IoT Reaper can hold internet enabled cameras hostage and add them to a botnet designed to perform massive Distributed Denial of Service (DDoS) attacks against individual organizations or entire networks.

Just as it does in other industries, the Internet of Things (IoT) is rapidly transforming the way vendors of safety and security systems do business. While today most customers look at connectivity as an enabler of the IoT, Ethernet connectors and IP stacks are really just a prerequisite – IoT is much more than just connected systems or a central management system. As Dr. Aleksandar Mitrovic, Senior Vice President Engineering at Bosch Security Systems, puts it, IoT will in essence change the entire business model in the industry with vendors transforming from hardware suppliers to service providers. “While hardware quality and features are the main differentiators today, within a couple of years we will see software-based features and analytics becoming equally important”, says Dr. Mitrovic. “Software will enable new applications, and artificial intelligence will allow our customers to gain deep insight into their business processes and thus to improve them. We are at the beginning here, but services like remote monitoring are already on the verge of becoming mainstream, and there are first applications publicly available which go beyond security - such as Bosch’s in-Store Analytics solution for retailers.”

Three steps towards IoT
From today’s perspective, embracing IoT is actually a three step endeavor for traditional vendors of security solutions. The first step is adding connectivity to the products, and most vendors have gone a long way here. Connectivity, however, does not necessarily mean that each and every product needs to be equipped with an Ethernet or WiFi interface and a new software stack. While cameras benefit greatly from this kind of connectivity, other sensors such as fire and intrusion detectors can still do without, given they are suitably connected to IP enabled controllers, e.g. via LSN (Local Security Network).

While the first step to IoT – connectivity – is mainly an engineering task which is well understood, the second becomes a bit trickier. It is about identifying business opportunities, developing applications and bringing meaningful data from the security systems into the backend to enable and support those. A good example for this could be a remote maintenance application which is fed by real time data such as the pollution level of fire detectors and can thus predict a failure before it actually occurs. If a similar application has access to all health data of a security solution and is based on appropriate algorithms, it can calculate optimized maintenance windows and reduce the number of service calls and onsite assignments. A number of such, mostly cloud-based services is currently available from a variety of vendors, but there is still a long way to go to reveal the full potential of remote services.

In the third step, finally IoT opens up a completely new world for vendors of security systems. In addition to acting as a hardware vendor and based on real time and/or statistical data in the cloud backend, they can and probably will have to transform into service providers and develop a wide range of applications which can go way beyond security – with data analytics being the main enabler. Applications such as people tracking or crowd detection can still be used for safety and security purposes, but we start to see completely new business applications based on data analysis – mainly in the retail space today, but others will certainly follow.

Most vendors today sell a lot of their hardware without even knowing which end customer or which application their products are going to. Bosch’s Dr. Mitrovic predicts: “In an IoT world, we will not only know where our products have been installed. Our customers will also be able to rely on us when it comes to monitoring, managing and upgrading products across the entire lifecycle. They will also have the option to benefit from our cloud-based analytics capabilities as an enabler for advanced business applications.” The windfall profit of such a development will also be increased customer loyalty, given that privacy and data security issues are properly addressed by every vendor.

New opportunities come with new challenges
So there will be lots of new business opportunities, and this is obviously good news for the established vendors. But every coin has two sides, and their challenge will be to maintain a leadership position while new players enter the market. In the telecommunications sector, the advent of Voice over IP has shown dramatically how fast newcomers can get a strong foothold in times of rapid change, while some of the former market leaders simply disappeared – even those with multi-billion businesses. As major parts of the hardware will become standards-based and more of a commodity over the next years, agile new players will be able to quickly leverage intelligent technologies and offer advanced services without even caring about the underlying hardware. This is why it will be essential for the established vendors to realize that IoT is not just a new technology which you introduce a year sooner or later than your competitor. It is actually a complete paradigm shift that will entirely change the market.

While transforming from hardware vendors to service providers, two things will be essential for every player in the security industry: data and analytics. Data are obviously the foundation of next generation services, as can easily be seen when you look at Google, Facebook and the like. But without sophisticated analysis it will be hard, if not impossible, to leverage those data and offer customers a real benefit. This is the prime reason why Bosch includes video analytics capabilities as a built-in standard in the majority of its network camera portfolio today, as Dr. Mitrovic points out. “However, you cannot rely on the sensors alone to offer such capabilities”, says the Bosch expert, pointing at fire detectors or intrusion detection sensors. “Here you will have to implement analytics in the back-end, which will usually be cloud-based. And even with intelligent cameras, new applications will depend on correlated information from multiple devices, again requiring additional analytics in the cloud.”

Data analysis opens up a wide range of new applications and thus business opportunities for safety and security vendors. Again, video based applications such as movement analysis or crowd detection come into mind first, but think what you can do with real-life data from access control or fire detection. Predictive maintenance based on continuous health monitoring can save customers real money and avoid outages, but such data can also be used for applications way beyond security. Usage data from access control systems and temperature information from fire detectors can help to optimize HVAC (Heating, Ventilation, Air Conditioning) operations and energy consumption, while video data may be perfectly suited to improve store or even airport layouts.

After introducing connectivity to our products we are now in the process of digitizing business processes around our products such as described above. The next step will be creating high value ecosystems across manufacturers. “For Bosch, IoT goes beyond connectivity only. Our breadth of technology expertise in numerous fields puts us in an unparalleled position to foster cross domain ecosystems and operate cross-application ecosystems,” Mitrovic said. “We are working, together with numerous industry partners, on an open, cross domain, cross manufacturer IoT ecosystem. Details on this platform will be covered in one of our next publications.”

Privacy and data security must be addressed
Collecting, storing and processing customer data will thus be one of the main pillars of safety and security vendors’ future business. This development will open up new opportunities, as we have seen, but it will also come with a new set of challenges. In the Internet of Things, privacy and data security are major concerns, and vendors who cannot guarantee that their customers’ data are safe may easily disappear. Specifically, the EU’s General Data Protection Regulation will set new and very strict standards here as of May 2018 with huge penalties of up to 20 million Euros or 4 % of global annual revenues arising on the horizon.

This means that all cloud based service offerings will have to be secured with best of breed technologies and that privacy and data security need to become design principles of any connected product. Hijacking of surveillance cameras, as it has happened in the recent past with consumer products, is simply not an option in serious security applications. “Our mission is to use our customers’ data to their benefit alone”, explains Bosch’s Dr. Mitrovic. “This is our ruling IoT principle, and it is a corporate policy binding all of Bosch's business areas – be it automotive, safety and security, home appliances or power tools. As we strive to anchor IoT in our DNA, privacy and security of customer data will always be our top priority.”


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