The Internet of Things (IoT), an all-encompassing network of microchips implanted or attached to your body, home, car, household appliances, clothes and practically anything else you can think of, is set to revolutionize our world in the near future.
This great technological leap is creating massive opportunities for both hardware and software producers, with less than 1% of all the physical objects that might one day form a part of this fabric currently unconnected. Cisco predicts that the global IoT market could be worth over US$19 trillion in the next decade, with $860 billion corresponding to Latin America. But if countries like Mexico are to become major providers of IoT solutions then they will have to produce more talent and more companies will need to get in on the act.
Neoris’ IoT Solutions
Global business and IT solutions provider Neoris has been working on IoT innovation strategy for three or four years now, CTO Manuel Belaunzaran told Nearshore Americas. Having grown out of Cemex, Mexico’s largest construction firm, Neoris has a history of creating IoT solutions for remote control and monitoring of concrete plants, he explained. At any given time, Neoris has between 35 and 80 consultants in different areas working on IoT innovation, Belaunzaran said. These include employees in Monterrey, Mexico and in Buenos Aires, Argentina as well as some staff based in Spain.
“Some analysts calculate that by the end of 2020 there will be eight or nine billion small devices connected to the IoT. That is a huge market and it doesn’t stop there,” Belaunzaran said. “Our projection for 2030 is that there is going to be 50 trillion connecting devices. It’s a staggering amount of data that’s going to be sent. These kinds of devices will require data to be hosted and Cloud is the perfect solution for that.”
Aside from creating solutions for Cemex, Neoris also develops IoT solutions to monitor energy grids for telecommunications firms like Telefonica. Other IoT offerings it is working on include specific solutions for maintenance of industrial plants and transportation logistics, smartwatch and smart TV development, security services, healthcare equipment and even solutions for more efficient management of vending machines.
“Our main focus is on the U.S. market, because the United States is always one step ahead in terms of innovation and technology,” Belaunzaran, although he noted that Neoris’ solutions are also broadly suitable for the global market. “There are companies in Latin America that want to have the newest technology so we have very specific cases where customers here in Mexico approach us and ask us to produce solutions that involve IoT for certain industries such as mining for example,” he added. As for when the IoT will really take off? Belaunzaran said we will see some significant projects happening this year, though 2016 is when he expects many more companies to embrace this new technology.
Mexico’s Talent Shortage
Ricardo Medina, a Mexico City-based business development manager with 24 years of experience working with businesses such as Microsoft, Blackboard, IBM and Telmex, believes the IoT presents great opportunities for Mexican developers, but only if the country can produce the necessary human talent to meet the needs of the market. Having grown concerned by the lack of IoT development work taking place in his country and the drastic shortage of developers trained in IoT technology, he founded Megahabilidades, a company that provides specialist training, develops IoT prototypes for software developers and creates its own IoT prototypes.
“A great challenge we have is that not one university in Mexico is formally producing human talent prepared to work in IoT. So we’re going to start a project with the Secretariat of Public Education to train 5,000 students in the development of IoT prototypes,” Medina told Nearshore Americas. Aside from training young students, Megahabilidades will also coach seasoned professionals who lack expertise in IoT. “Some of my clients are software companies that don’t know how to develop for IoT. It’s a new form of working so we need to train not only students but also people who already work in software businesses,” Medina explained.
One of the companies that Medina has been helping with IoT training and infrastructure is BrainUp Systems, a Mexico City-based tech firm founded in 1997. Emphasizing the importance of “constant innovation,” BrainUp Systems Director General Guadalupe Sanchez told Nearshore Americas, “We realized there was a very strong trend toward the Internet of Things and a whole world of opportunities because you can create solutions for connecting almost anything you can imagine.”
The company is currently working on its first IoT project: “a cheap and simple home-security apparatus” featuring input from sensors and security cameras, Sanchez said. “We chose a small project that will enable us to enter the market quickly. Maybe it won’t make us millions but it will give us the expertise to develop more IoT solutions,” she explained. “It’s a first step toward gaining knowledge of methods for IoT development, which requires much greater expertise than app or software development.”
One of the biggest challenges has been the shift toward “creating technology because a lot of the time in Mexico we’re more accustomed to adapting technology than creating it. Implementing this cultural change within our business and the people who collaborate with us is a challenge,” Sanchez said. Finding the talent has also been difficult, she added, “because it’s something that’s only just emerging here. Obviously if you break down each individual task we have people who can make sensors and people who can do the programming, but the complete knowledge of how to do an IoT project is difficult to find.”
The only organizations giving seminars and providing training in IoT in Mexico are “the big brands like Google, Dell, Microsoft, IBM, SAP and Oracle,” Medina said. However these companies are obviously focusing on developing solutions centered around their own products and services, he noted. Beyond those technologies there is an alarming lack of development occurring in Mexico, he warned.
While most of us have seen relatively little practical implementation of IoT technology to date, Medina believes it will take off very soon. “Towards the end of the year and from the start of 2016 onwards I think we’re going to start seeing many, many benefits based on this technology, like intelligent cars, appliances, clothes and homes,” he said, in agreement with Belaunzaran. “The impact is going to be enormous in the short term.”
First Mexico, Then the World
While Mexico could become an important producer of IoT solutions for the United States and the global market, Medina is convinced that developers should first concentrate on the domestic market as they test out the new technology. “I’ve always believed that the development of the industry as a means of accelerating competitiveness has to happen locally. You have to impact the local ecosystem before impacting external markets. If we’re going to talk about smart cities then we have to transform our cities first. If we want to develop prototypes for intelligent homes then we have to experiment first in our own homes,” he said.
At Megahabilidades, Medina explained, “what we’re doing is inviting businesses to develop IoT solutions that meet the local needs of wherever they’re from in Mexico. Then, once these solutions are proven, we can export them.” Once Mexican developers have become more familiar with the technology they can begin to provide solutions for the rest of the world and in particular the United States, he added. “When you consider the nearshore market, it’s always hugely attractive to be so close to the world’s biggest consumer of IT. If we manage to carry out high quality projects and if we can find the way to offer the development of IoT prototype projects based on international standards like CME or Scrum and Agile methodologies then we’ll be able to offer them very easily to the rest of the world.”
While acknowledging that Mexico has a “historic opportunity” and is projected to do big things in IoT innovation, Medina reiterated his concern over the lack of vision and preparation that he’s witnessed in the industry. “We have a great risk,” he said. “Mexico is the second biggest consumer of videogames in the Americas after the United States. But we consume infinitely more than what we produce. If we don’t get our act together and start working seriously in fomenting human capital and developing IoT prototypes then we’re going to condemn ourselves to be consumers instead of producers, like what happened with videogames.”
Making sure this does not happen requires broad cooperation, Medina added, affirming that the government, universities, the private sector and even civil society all share responsibility for fomenting the necessary human capital. “That’s why I think what we’re going to do with the Secretariat of Public Education is so important,” he concluded, “to launch campaigns to prepare human capital in order to be able to carry out more IoT projects.”