Stephenson blogs on Internet of Things
Internet of Things strategy, breakthroughs and management
I guest blogged today @ INEX Advisors today on one of my favorite Internet of Things principles: how thinking collaboratively has to replace I-win-you-lose-zero-sum-game thinking if companies want to really profit from the IoT.
As before, I cited GE as one of the few big companies that’s seizing a strategic advantage in the IoT world by practicing this approach.
Holy Clayton Christensen! Another wave of “disruptive innovation” is on its way, and this time the Internet of Things is responsible!
I’m confident that the IoT is going to bring about radical change throughout a wide range (if not all…) of vertical markets in the near future, through new realities such as giving everyone who needs it access to real-time information or by making preventive maintenance simple through real-time data from products such as jet turbines (General Electric is, again, a leader…).
However, for concrete evidence of how the IoT will change things, perhaps the best industry to look at is auto insurance, where the IoT is facilitating a fundamental shift in marketing, from the prior practice of basing premiums on proxy indicators such as a student’s grades or a person’s credit rating (leading to the heinous — and expensive — crime of “driving while poor,” LOL).
Progressive Snapshot
Instead, what is emerging worldwide (especially in Europe) is “usage-based insurance” (UBI), where the rates are based not on guestimates, but the driver’s actual behavior!
Insurance & Technology reports that the transition will only accelerate in the future.
“‘In five or ten years, all insurers will have dynamic driving data, so all will be able to offer discounts,’ says George Ayres, vice president of global sales for Verizon Telematics. ‘There will be no more asymmetry in terms of what they know about customers, so price alone won’t be as effective [for acquiring and retaining customers]. …The insurers who are out front on this idea are realizing [that soon] all will [have to] start to provide much wider breadth of services to keep those captured through price.’
“These services can be as simple as sending additional driving data to the driver’s smartphone, or as complex as auto insurance bundled with a customer relationship solution that sends alerts for scheduled maintenance.”
What a transformation!
Smart business leaders will start paying close attention to the features of the Internet of Things, and begin planning now on how to get ahead of the curve on making certain they are the beneficiaries of disruptive innovation — not the victims!
There’s a new Deloitte white paper that echoes a theme I’ve been repeating since 1990: smart businesses eliminate inefficiency by eliminating environmental waste.
I predict that the Internet of Things will speed that trend by allowing real-time data sharing throughout the supply chain, further increasing its efficiency.
The white paper, “The Evolving Supply Chain: Lean and Green,” says that:
“Leading companies are now finding that a green supply chain doesn’t just improve the public’s perception of their company and brand; it can save money by using resources more efficiently and reducing waste. It can also help to manage risk by insulating a company from shortages and price shocks, and by reducing the chances that a supplier will do something that gets them in hot water.”
It continues by identifying five key factors to reduce:
“Leading companies create value by modifying their supply chains to manage five key inputs and outputs: energy, carbon, water, materials and waste. These five resources are ubiquitous throughout the supply chain and thus offer vast potential for improved efficiency and cost reduction. Energy is expensive to use; carbon, in the form of emissions, represents dollars gone up in smoke; scarcity and commodity inflation are driving up the price of water and materials; and waste is a potential profit thrown away.”
In my speeches on the “Zero-Waste Economy,” I used to suggest that executives that were contemptuous of tree-hugging environmentalists and could care less about generating wastes should just substitute the work inefficiencies for waste. What hard-nosed company could justify inefficiency?
It’s great to see that the message is finally getting mainstream acceptance, and I really do think that the IoT will boost supply chain efficiency and thereby reduce environmental impacts by allowing everyone in the supply chain who needs operating data to share it simultaneously and in real time.
So there’s really no excuse any more for not practicing smart environmentalism, is there?
PS: To get the specifics about how to translate smart environmentalism into profits, check out Gil Friend’s Natural Logic. He’s got the operating manual.
(BTW: thanx to @TheloT, always a great source of IoT info, for Tweeting this!)
I was impressed when a Harvard research team created a 3-d printed battery the size of a grain of sand, but this is a REAL gamechanger!
CIO reports that a team of University of Washington researchers have created a new technique, ambient backscatter, which:
“…leverag[es] existing TV and cellular transmissions, rather than generating their own radio waves. This novel technique enables ubiquitous communication where devices can communicate among themselves at unprecedented scales and in locations that were previously inaccessible.”
Thus, existing wireless signals are transformed into a source of power and a communication medium.
You can imagine the implications for the Internet of Things!
Among other applications, the researchers say ambient backscatter could be used for wearable devices, smart home systems, and sensor networks such as ones embedded in bridges to give advance warning of maintenance problems. It could also be used for NFC payments.
CIO reports that:
“Groups of the devices were tested in a variety of settings in the Seattle area, including inside an apartment building, on a street corner and on the top level of a car park. These locations ranged from less than half a mile away from a TV tower to about 6.5 miles away.
“They found that the devices were able to communicate with each other, even the ones farthest from a TV tower. The receiving devices picked up a signal from their transmitting counterparts at a rate of 1 kilobit per second when up to 2.5 feet apart outdoors and 1.5 feet apart indoors. This is enough to send information such as a sensor reading, text messages and contact information.
“The researchers were able to demonstrate how one payment card can transfer funds to another card by leveraging the existing wireless signals around them.”
The U of Washington team won the prize for the top paper at the Association for Computing Machinery’s Special Interest Group on Data Communication 2013 conference in Hong Kong.
What a breakthrough! It looks like Kris Pister’s “smart dust” vision will be a reality soon!
I’m hitting on the same subject, privacy and security, for two posts in a row because now there’s been an incident that really could jeopardize the future of the IoT!
Call me an alarmist if you will, but I say ignore it at your peril…
As blogged by GigaOm, ABC News reported this week on an incident where a hacker got access to a — this is getting repetitious — IoT product with laughable security.
This time, it wasn’t the main-stream media reporting just a friendly wake-up call
Foscam Baby Monitor
(literally and figuratively…) from a reporter about a vulnerability, or a general warning about possible threats to home and car: it was a story guaranteed to strike a primal fear in the heart of every parent: a threat to their infant!
Here’s what happened, according to ABC:
“A Houston couple is still shaken after saying they heard the voice of a strange man cursing and making lewd comments in the bedroom of their 2-year-old daughter.
“When Marc Gilbert and his wife Lauren entered the room, the voice cursed them as well.
“The creepy voice — which had a British or European accent — was coming from the family’s baby monitor that was also equipped with a camera. A hacker apparently had taken over the monitor.”
Are you a parent? If so, don’t tell me that wouldn’t have your blood boiling!
Oh, BTW, ABC tossed in a reminder that baby monitors can be used by potential burglars.
Once again, I’ll harken back to my days as a corporate crisis consultant to warn that this is precisely the kind of incident that is going to be repeated ad nauseum by privacy advocates and others to warn about the dangers of the IoT.
Even worse, those of who are immersed in the IoT 24/7 may not realize it, but I’d bet the majority of people worldwide still haven’t heard of the IoT. Is this the way we want them to find out about it???
So my parting advice would be to go out today and buy a Foscam baby monitor (heck, they’re probably giving them away now — who the heck would buy one?) and put it in a place of prominence on your CEO’s desk as a reminder that if you don’t take privacy and security seriously, the media will be quick to remind you…
OK, I admit to losing all sense of objectivity on this one! After all, it hits all my sweet spots:
As I wrote earlier, about GE’s collaboration with Electric Imp and Quirky, this exemplar of Industrial Age might (what could be more powerful than a GE locomotive???) really seems to get it that the Internet of Things is as much about new attitudes of collaboration and sharing data as it is about Internet technology.
GE jet engine mount
So it’s no surprise that Industry Week reports on a new GE initiative, soliciting crowdsourced designs for a new jet engine bracket that will be produced through 3-D printing.
As Christine Furstoss, technical director of Manufacturing and Material Technologies at GE Global Research, explains:
“‘For any industry to be successful, you really need to develop communities or ecosystems of partners and thought leaders…
‘No sustainable, established industry technology exists without multiple players, multiple styles of thought, multiple ways of growing … We feel like one of the best ways to stimulate that, to find the newest and best ideas, is to start with open collaboration.'”
Bravo!
Contrast that attitude with what is still all too prevalent, as summarized by Paul Horn, former senior vp of research at IBM:
“Horn remembers a time before open innovation — a competitive, suspicious era when innovative and great, transformative ideas were only allowed to grow in a tightly sealed vacuum.
‘When we built the Almaden Laboratory at IBM in the early 1980s, we put it south of Silicon Valley on purpose,’ he recalls. ‘In those days, our biggest fear was the leaking of intellectual property out into the valley.'”
I suspect that one of the biggest obstacles to full realization of the IoT’s promise will be the difficulty of leaving that old zero-sum game, my-gain-is-your-loss mentality behind!
I wasn’t aware that this latest competition, to design a 3-D printed bracket strong enough to support a jet engine on a commercial plane, is part of a 2-year crowdsourcing initiative, with approximately $20 million in prizes for products, designs and processes, especially in 3-D printing:
“‘We’re trying to find thought leaders in this area — people who may know through a technique they’ve devised or a piece of software that they’ve found or just their own experiences what is the best way to design with additive for real industrial parts,’ Furstoss explains. ‘We’re really at the birth of industrial additive technology. This is a way for us to build support for that community of makers.'”
Furstoss says the crowdsourcing competitions are no knock on GE’s own 50,000 engineers: “‘We have a platform in place that can put a student in his dorm on the same plane as our engineers,’ she says. ‘We’re making sure that people who may have ideas, may have skills, may have things to offer have an opportunity to bring them forward, no matter who they are.'”
It’s that kind of openness to not only new technologies, but also new management practices, that will give GE a huge head start over competitors that have yet to come to grips with the new reality: the Internet of Things!
There’s new confirmation that the U.S. remains dangerously behind the European Union on the twin issues of Internet of Things privacy and security. As I’ve warned before, especially in the context of the continued outrage over the NSA surveillance, if these issues aren’t solved collaboratively by the private sector and government, they threaten to derail the IoT express.
In her Stanford Masters thesis, I believe Mailyn (sic) Fidler accurately summarizes the US’s stance:
“The IoT in the United States is characterized by late but strong entry of companies to the market and by recent, but minimal, interest from the federal government. Specifically, the federal government views the IoT largely as part of the ongoing privacy and security discussion in Washington, D.C. Complicating analysis of the IoT in the United States is that the “Internet of Things” is not a generally recognized term. In the U.S., the IoT is viewed as a natural evolution of American innovation rather than as a unique field.”
http://m3.licdn.com/mpr/mpr/shrink_80_80/p/2/000/0dc/3bd/392d2fe.jpgFidler contrasts this lack of concern by the government to the EU, which, while also
Mailyn Fidler
viewing IoT privacy in the broader context of general privacy policy, has made IoT personal privacy and security a priority — more about that in a future post about the “Butler Project” report):
“The IoT has been a political priority for the European Union. Even with the recent recession, interest and funding in IoT enterprises has not slowed, and the EU has invested 70 million Euros in at least 50 research projects since 2008. In addition to the EU’s hopes that the IoT will bring economic benefits, particularly to small businesses and public institutions, the EU’s interest in the IoT reflects its concerns about who controls emerging technologies. Indeed, EU officials have stated an ambition to build an IoT ‘that will bring about clear advantages for Europe.’
However, despite the EU’s investments, a lack of legislative clarity, slow technical progress, and pressure from international strategic interactions threaten to slow EU efforts to develop a globally competitive, European-centric IoT.
The EU considers privacy a societal priority and has a history of regulating technologies to prevent privacy risks, as its Data Protection Directive indicates. The IoT is no different. The privacy risks the IoT presents, however, are discussed in the context of ongoing data protection reform in the EU. EU officials are debating how to author broad, technology-neutral guidance while, at the same time, many officials seem convinced that technology-specific guidance will be necessary. The EU’s political prioritization of the IoT fuels attempts at lobbying for IoT-specific regulation, as the myriad, overlapping attempts at IoT guidance demonstrate. The IoT’s advancement, then, is mired in this larger debate about the future of technology policy.”
Even with this greater focus, Fidler says the EU hasn’t made as much progress as might be hoped. Only 1 of the 33 2010 Cluster of European Research Projects on IoT explicitly investigated security, and, in a study the same year of IoT standards, only 2 or 175 explicityly investigated security — and none have addressed IoT cybersecurity.
In other words, they ain’t great, but we’re worse (in fact, among US agencies, only the FTC seems to give a fig about the IoT). Pathetic.
Fidler’s report also covers China. You can bet that privacy and security aren’t high on their priority list, LOL.
The EU, while perhaps lagging behind on IoT technology, may get the last laugh on the privacy and security issues. As we’ve seen with successful suits against Microsoft and Google on other Internet issues, the EU has prevailed in the past on questions of privacy and security, and, according to Fidler, it may happen again:
“The EU, faced with the IoT approaches of the United States and China—arguably the leading centers of technological innovation—may stand behind its social parameters and emphasis on new international governance mechanisms as a way of asserting alternative power. With such laws and institutions, economic activities involving the EU and the IoT would have to conform to EU-based standards. The EU, thus, compensates for technological disadvantages in innovation through social and governance parameters. Similarly, the United States and China are seeking to maintain or create their technical edge in new cyber technologies by encouraging unique standards regimes or more aggressive development environments.”
If so, I say bully for them! Someone has to stand up for the individual in this brave new world, and it looks as if the Obama Administration isn’t taking the challenge. Shame!
Fidler concludes that the geopolitical competition among the U.S., E.U., and China may have negative effects on the IoT’s overall growth if it results in incompatible standards:
“This geopolitical competition at such an early stage of the IoT’s development could create international interoperability problems, with negative political, economic, and social consequences. How governments and societies navigate the technological and political aspects of the emergence of the IoT will determine if the IoT’s benefits will be ubiquitously available or if the Internet’s foray into the realm of things will be interrupted.”
FADE TO Youngbloods singing “Get Together”…..
Just had a great conversation with a brilliant consultant, Michael Woody, the president and founder of International Marketing Advantages, Inc (he and I have the same wonderful literary agent, Michael Snell).
Woody helps small, innovative companies successfully compete with China, using a simple formula: fewer, faster, finer.
Check out the American Dragon site, and think hard on how to apply these principles in conjunction with your innovative Internet of Things product design, and I think you’ve got the formula for manufacturing success!
As someone who spends much of his time introducing the Internet of Things to people who’ve never heard of it, much less thought about how it might improve their lives, I think there might be something to the logic of this Fast Company article about the GE Eggminder.
The article points out that the IoT still provokes blank stares from most people, a fact that those of us who are immersed in it every day may tend to forget. As the subhead said, “EGG MINDER MIGHT BE DUMB PRODUCT DESIGN, BUT AS A PIECE OF MASS COMMUNICATION ABOUT WEB-CONNECTED PRODUCTS, IT JUST MIGHT BE GENIUS.”
GE Eggminder
The Eggminder doesn’t do much — tells you, via the app, how many eggs you have left in your fridge, but it’s the kind of simple-to-understand example of the kinds of connectivity possible through the IoT that is likely to make a lot of people say “Now I get it!”
It’s not life-changing, as the article points out, and maybe even dumb: “(How dumb? To quote Quirky’s own product evaluation video, ‘it’s a pain in the ass,’ ‘superfluous,’ ‘really silly,’ and ‘the height of laziness.’). BTW: am I right in guessing that this might have been one of the award winners in the contest that GE, Quirky and Electric Imp held to find fast-to-market IoT products. which I praised as an example of the kind of collaboration it will take to capitalize on the IoT?
My personal favorites in terms of IoT products that are easy to understand are the SmartSlippers that can alert a caregiver when a frail senior is likely to fall, or the onesie that alerts parents that their baby has stopped breathing — in time to avoid SIDS. But you get the point: until people see something that could simplify their life — or save it, they may not understand exactly how revolutionary the IoT is.
So let’s have more Eggminders — simple products that will result in more “aha moments” — and speed public adoption of the IoT!
Wired has an article this week about Shodan, the “IoT search engine,” which I hope scares the bejesus out of enough companies and government officials that they’ll finally realize how absolutely critical it is that we make security and privacy THE top public policy/corporate management priorities regarding the IoT.
Shodan’s homepage proudly proclaims that it will let you “EXPOSE ONLINE
Shodan
DEVICES: webcams, routers, power plants, iPhones, wind turbines, refrigerators (there’s that meme again!), VoIP phones.” Anyone out there who isn’t covered by that list? If so, stay in your cave!
As for everyone else, maybe you’d be more properly attracted by the CNN story about Shodan several months ago: “Shodan: the scariest search engine on the Internet.” Got your attention yet?
Here’s what Shodan can do, according to CNN:
“It’s stunning what can be found with a simple search on Shodan. Countless traffic lights,security cameras, home automation devices and heating systems are connected to the Internet and easy to spot.
Shodan searchers have found control systems for a water park, a gas station, a hotel wine cooler and a crematorium. Cybersecurity researchers have even located command and control systems for nuclear power plants and a particle-accelerating cyclotron by using Shodan.”
Command and control systems for nuclear power plants? Sheesh!
Reminds me that while the Obama Administration remains abysmally ignorant of the IoT (and, remember, I’m a fan of them in general …) one official who was all in was former CIA Director David Petraeus:
Sufficiently alarmed yet?
Let me be clear: I am convinced that security and privacy are the two issues that have the greatest potential to stop the Internet of Things dead in its tracks — and I felt that way even before Edward Snowden was a household name.
Snowden, ooops, Shodan, has revealed shocking indifference to security on the part of countless organizations (and, BTW, don’t forget that 85% of the U.S.’s critical infrastructure — power plants, pipelines, chemical factories, etc., is in private hands):
“A quick search for ‘default password‘ reveals countless printers, servers and system control devices that use ‘admin’ as their user name and ‘1234’ as their password. Many more connected systems require no credentials at all — all you need is a Web browser to connect to them.
In a talk given at last year’s Defcon cybersecurity conference, independent security penetration tester Dan Tentler demonstrated how he used Shodan to find control systems for evaporative coolers, pressurized water heaters, and garage doors.
He found a car wash that could be turned on and off and a hockey rink in Denmark that could be defrosted with a click of a button. A city’s entire traffic control system was connected to the Internet and could be put into ‘test mode’ with a single command entry. And he also found a control system for a hydroelectric plant in France with two turbines generating 3 megawatts each.
This is as scary as the Vanity Fair article last year about how a miscreant could use an iPhone to kill you!
The 85% of critical infrastructure in private hands number should be a stark reminder: the only way we can possibly address IoT privacy and security is through collaborative government/private sector action — with strong involvement by you and me.
If you are involved in the IoT in any way, you simply can’t duck this issue!
