As the term Internet of Things (IoT) becomes as colloquial as “smartphone” or “texting”, one can’t help but to think about the implications to modern life. It is undeniable that it is the biggest economic opportunity in the world since …well, the Internet (although I always considered computers as being “things”). The concept that devices (aka things) can sense stuff in their environment, send data autonomously, and act on commands at a relatively low cost is what makes it so disruptive and intriguing. There is no surprise that companies like Apple, Microsoft, Alphabet (the company formerly known as Google), and Amazon have been gobbling up startups and investing oodles of cash into it. This is a technological transformation similar to the digital era that changed the way we read, listen to music, or watch movies. Besides these are the companies best suited to drive the trend. There will be hundreds of other smaller companies in this industries developing devices, software, sensors, and network elements. But these 4 have to be at the epicenter of the action.
In the humble opinion of this obscure blogger, there are 4 elements worth analyzing that are affecting this new trend: The evolution of technology, the “things” themselves, the data they send or receive, and the system to make the whole thing do something useful.
- Technology Evolution: This answers the question of why now. Moore’s law, Metcalfe’s law, and the development of fast wireless is making it all economically and physically possible. In essence, a lot of processing can be done in very small sizes and at a very low cost. It is now cost and size effective to have electronics in almost every “thing” to sense the environment and transmit data. None of this will even be thinkable without the right scale of technology. The right scale is happening now.
- Data: “Things” sense data and autonomously transmit it. A “thing” can send identification data, status data, environmental data, location data, actionable data, or a combination of these. A message saying “the third fridge in the ice cream section is malfunctioning” can be an example. A message like this can be sent to a store operator’s device so s/he can go and physically check the fridge and fix the problem. But if there is a feedback loop, a system can remotely trigger an action to correct it automatically. In other words, data can be just informational, actionable, or a command itself. The data is captured by sensors that are meaningful to the object: Temperature for a fridge and weight for a truck are examples. An intelligent system will then make sense of the data by analyzing it and then propose or trigger an action. Sense, connect, analyze, and do something about it. Simple, right?
- The “things”. These are the “what”. I like to classify them according to seven major environments where “things” are. The individual, home, vehicles, public places, the workplace, the enterprise, and infrastructures. The data is different across all these and, more importantly, it is used for different reasons. The first four imply a direct relationship with individuals and they are inter-related. In all of them, for example, we’d like the temperature to be comfortable so an automatic thermostat may be enough. An individual may have control over the temperature in his/her car, but not in the mall or the office. So there is no need for these thermostats to interact with each other. However, if you google (or is it alphabet now?) the restaurant for your business dinner, wouldn’t you want it to seamlessly show up in your car’s navi so you can drive there, and then on your phone for the last few steps? Or would you like your playlist to continue from your home, to your morning run, and then your car? These require an integration beyond just their own environment and the end user needs to be the center of the experience. The connected enterprise, workplace, and infrastructures are a bit different. In these cases the “things” are the core of the operations. My simple ice cream fridge example above is one of those. These will generate a significant ROI for companies, so they will most likely develop faster. More on this in future posts …
- Architecture. This is where the debate gets not only nerdy, but interesting. The industry is toying around with 3 basic architectures: Smartphone centric, cloud centric, or environment centric (based on a local hub or a mesh of objects in the environment). In my opinion, there always has to be something in the environment managing and connecting all the “things” even when the smartphone is not there, so lets consider that a given. But there are pros and cons to a smartphone vs. a cloud architecture. And as it often occurs when new technologies are being launched, the control of the experience is the battleground. It is in the best interest of the smartphone players to have it be the center. Apple or Alphabet (through the Android ecosystem) will thrive in this environment. For the strong cloud providers, like Microsoft or Amazon, cloud is the way to go. But from the user’s point of view a combination is the best option. So the word “centric” needs to not be that relevant. Again, companies like Apple and Alphabet have a great presence in both the smartphone and the cloud. In addition to that, their hubs, AppleTV and Google’s OneHub will complete the offering. Microsoft and Amazon do not have enough presence in the personal device but are very well positioned with cloud services and hubs, so they will also be strong players.
To paraphrase Dr. Carl Sagan, there a billions upon billions of “things” out there that need to sense, get connected, monitored, and acted upon. Some estimates put it in the trillions of dollars of economic activity. Consumers will benefit significantly with a seamless and open architecture. What made the Internet so successful is, in part, the openness. One would hope that the “things” will also be as open. If this market is to be as big as predicted, we will need a lot of large companies and lots of smaller ones to make it work. Openness will make it happen.
Mr Cook, Mr Nadella, Mr Bezos, and Mr. Page, I hope you agree when you read this. If you don’t, let’s discuss.