Wow! Mass. IoT market really heating up, as PTC grows again!

Posted on 24th July 2014 in Internet of Things, M2M, manufacturing

One of my roles is as founder and co-chair of the Boston/New England IoT Meetup, so I’m always eager to report positive news about IoT news here in the Hub of the Universe.

Big news today: Needham’s PTC is growing again (after its recent $130 million purchase of ThingWorx), buying Foxboro’s Axceda for $170 million, giving them a good base in both IoT platforms and devices. Both of these purchases are dwarfed by the $3.2 billion Google paid for Nest, but they do show that the industry is growing, and that PTC is suddenly emerging as a Player To Be Reckoned With. Wonder what their strategic plan is?

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Capgemini Report: dramatic proof most big companies lag on IoT strategy!

In writing the SAP “Managing the Internet of Things Revolution” i-guide to IoT strategy for C-level executives, my research led me to believe that most big companies were still clueless about the IoT and how it would revolutionize every aspect of their operations.  Now a great report by Capgemini, “The Internet of Things: Are Organizations Ready for a Multi-Trillion Dollar Prize?” seems to answer its own question with a resounding “No!” It’s a must read, whether you’re late to the game, or if you’re looking for entrepreneurial opportunities. Let’s start with the conclusion:

The IoT represents the next evolution of the digital universe. The speed at which nimble startups and Internet players are capturing IoT opportunities should serve as a wake-up call to larger, traditional organizations. Analyst estimates point to a world where startups will dominate the IoT market. Fifty percent of IoT solutions are expected to originate in startups less than 3 years old, by 201732. They may be less nimble, but bigger organizations need to step up to the plate. As with all digital disruptions, being an organization that is in catch-up mode will be a deeply uncomfortable place to be. ” (my emphasis)

Earlier, it emphasizes that success will require both a paradigm shift and mastering new technologies such as big data analysis:

The IoT prize will be won by those who achieve a change in mindset, from a product world to a service world. However, that fundamental mind-shift is not the only requirement. Organizations need to get the right IT infrastructure in place, quickly acquire capabilities in analytics, and strengthen a whole host of functional capabilities. “

Got your attention yet?

The report was most emphatic about an aspect of the IoT that I don’t think I’ve emphasized enough in the past, the shift from products to services. Once again, I look to GE as one big company that “gets it” about the IoT transition, building sensors into its products that rotate, then monetizing the investment by offering real-time data about the products’ operations to customers so that they can optimize their operations — and charging for that data.  The study said that within a year after GE began offering its “Predictivity” line of IoT services in 2012, it generated $290 million in revenues.

One of the reasons why I really like the analysis is that it zeros in on a range of management issues that executives must address to capitalize on the IoT.

The study of more than 100 US and European companies reported that most don’t have the in-house expertise to make the switch from selling products to offering services:

“They now need to be able to envision new services, develop commercial models and design service contracts that result in continuous revenue streams. Our discussions with senior executives revealed that these are not areas of strength for many product- centric organizations.”

In particular, it targeted salespeople as a problem area: “For IoT solutions, a sales force needs to be comfortable in articulating the value proposition and potential benefits, which is critical to convincing often-reluctant customers to pay for a new class of services.” Customer support will also need to be beefed up — and delivered faster to customers who come to expect real-time data.

 The research showed that most companies were only in the early stages of IoT implementation — if at all. Fewer than 30% support remote operation of devices, and fewer than 40% use sensor data to offer customers the kind of performance improvement insights that GE gives.

One major gap that jumped out to me is that most of the big companies just don’t get my “Essential Truth” that you have to begin asking “who else can use this data”?,” and begin opening up proprietary systems so that third parties will enrich your offerings by creating new combinations and complementary offerings. Fewer “than 15% of organizations offer IoT solutions that integrate with third-party products and services.” (my emphasis) If mighty GE can team with Quirky and Electric Imp, what’s your excuse? On the more positive side, the research revealed that nearly 60% use partnerships to develop IoT solutions, so there’s hope.

The gaps are technological as well as human. 67% of the respondents said they don’t have the technology (shout-out to SAP’s HANA) to handle the massive amounts of big data the IoT will generate.

Another obstacle that the report identified was one I’d not come across before: resistance from within. “An executive at a medical technology company outlined how resistance can come less from the customer – and more from within the organization, explaining, ‘We only have 20% resistance from the customer and 80% from our own organization. Consequently, it is a significant challenge to align our existing business processes with new IoT-based service offerings.’”

The final section is an action agenda to get companies up to speed on the IoT:

  1. Put the Right IT Infrastructure in Place and Acquire Data Analytics Capabilities.
  2. Strengthen Functional Capabilities across Product Management, Sales and Marketing and Customer Support
  3. Use Trainings and Incentives to Prepare the Sales Force to Sell IoT Solutions. Augment Product Management Capabilities with Services Expertise and Emphasize Ease-of-Use in Product Design
  4. Develop Customer Support Capabilities to Drive Real-Time Issue Resolution.

Bottom line, Capgemini concluded that a shocking 42% of all companies don’t provide any IoT services. That, in my mind, is a clarion call to action!

You simply must read this report — then act on it.

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Internet of Things interview I did with Jordan Rich

Didn’t realize this had run several weeks ago, but here’s an introduction to the IoT (based on my SAP “Managing the Internet of Things” i-guide) that I did with Jordan Rich of WBZ Radio, who’s also my voice-over mentor.  The examples include the GE Durathon battery plant, “smart aging,” Shodan, the SAP prototype smart vending machine and Ivee. Enjoy!

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If This, Then That (IFTTT): essential crowdsourcing component to speed IoT development

I’ve been meaning to write about IFTTT (If This, Then That, pronounced like “gift,” but minus the g) for a long time, because I see it as a crucial, if perhaps underappreciated, component to spread the IoT more rapidly and increase its versatility — by democratizing the IoT.

That’s because this cool site embraces one of my favorite IoT “Essential Truths.” We must start asking:

who else could use this data?

I first started asking this question in my book, Data Dynamite, which largely focused on a fundamental paradigm shift away from the old view of data, namely, that you could gain a competitive advantage if you had proprietary information that I didn’t have. It was a zero-sum game. Your win was my loss.  

No longer: now value is created for you if you share data with me and I come up with some other way to use that data that you hadn’t explored. Win-win!

As applied to the IoT, I’ve explored this shift primarily in the context of corporate initiatives, where it becomes possible, for the first time, to share data instantly among everyone who could benefit from that data: everyone within the company, but also your supply chain, your distribution network, and, sometimes, even your customers. 

samples of IFTTT recipes

Here’s where the benefit of sharing data with your customers on a real-time basis comes in: there are a lot more of them than there are of manufacturers, and I can guarantee you that they will come up with clever uses that your staff, no matter how brilliant, won’t. Exhibit A: during last year’s World Series, GigaOM’s Stacey Higginbotham, did an IFTTT “recipe” that turned her HUE lights red (too bad for her, the Sox scored more runs. Wait until next year…). What Philips researcher would have ever done that on company time?

By harnessing crowdsourcing of ideas, the IoT will progress much faster, because of the variety of interests and/or needs that individuals add to the soup!

So, how’s IFTTT work?

Here’s a brief outline (or go here for details):

  1. a “recipe” is made up of a “trigger” (i.e., if this happens, such as “I’m tagged in a photo on Facebook”) and an action (then that happens, such as “create a status message on Facebook.”).
  2. the building blocks for recipes are called channels — 116 as of now, and growing all the time — each of which his its own triggers and actions.  The channels include a wide range of apps and products, such as Nest thermostats or Facebook.

There is a wide variety of recipes on the IFTTT site (you can subscribe to have new ones involving a given channel that interests you sent to you as they are shared) or you can easily create your own — with no programming skill required. How cool is that?

Yes, IFTTT can be fun (“email your mother Foursquare checkins tagged #mom. Useful for brownie points“), but I’m convince that it’s also a critically important tool to speed deployment and impact of the IoT, by harnessing the power of crowdsourcing to complement the work of app developers and device manufacturers.

Now get going!

 

Detailing my “Smart Aging” through the IoT vision

The best-laid plans get canceled due to Summer vacation…

I was supposed to speak to seniors (and those who love or care for them!) today in my dear little burg, Medfield, MA, about my “Smart Aging” through the IoT vision. However, the talk has been postponed til September due to the small number of sign-ups. Oh well, I guess most revolutions start with a whimper, not a bang.

Because I believe so strongly in the idea, I’ve posted the talk (including presenter’s notes) to SlideShare.

Basically, it fleshes out what I’ve written in a number of recent posts, that I believe we can and must meld two aspects of the IoT, Quantified Self wearable devices that measure and record personal health and wellness data 24/7 and smart home devices such as the Nest thermostat and Ivee voice-activated base station, to create a new approach to aging. I defined smart aging as:

using senior-friendly home and health technology to cut your health and living costs,
improve your health and quality of life, and keep you in your own home as long as possible.

I predicted that it can “bring unprecedented health and happiness to our senior years — while saving us  money!”

While there have been efforts for a while to specifically use technology to improve aging, I predicted that

“Smart Aging will instead result from tweaking efforts underway as part of the Internet of Things to improve life for everyone, of all ages. As Joe Coughlin, director of MIT’s AgeLab, says, ‘Counterintuitively, making home automation mainstream and cool means that it’s likely to end up in the hands of older adults sooner than if home automation technologies were only designed specifically for older people.’”

(that’s why I suspect that wearables such as the Nike Fuel or prototype MC10 for jocks will be more important for seniors than anything specifically designed for them — and will face fewer obstacles to adoption).

I stressed that there are still important obstacles, not only the security and privacy ones that are essential for ANY IoT product or service, but also some that are specific to seniors, such as preserving their dignity and letting them control who will share access to their data.

I concluded that this approach will pay multiple benefits:

  • Improve your health & fitness
  • Cut your medical bills
  • Build your self-esteem
  • Cut your living costs
  • Let you stay at home, safely.

I’d love to hear your thoughts on this subject.

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The New IoT Math: 1 + 1 + 3 — Jawbone UP24 now controls Nest thermostat

A chance conversation about the IoT the other day turned me on to this elegant proof-of-concept that what I call “Smart Aging” to help seniors be healthier and avoid institutionalization is possible: my Jawbone UP bracelet could now control my Nest thermostat (if I had one: with three heating zones in my house, I’m gonna wait until the NEST price drops before I’ll buy them…).

That, ladies and gentlemen, is exactly what I’m talking about with my concept of “Smart Aging” for seniors, which would combine:

  • Quantified Self devices such as Jawbone UPs, Nike FuelBand, the congestive heart failure necklace,  or the Biostamp sensor (more about that one in a future post!) that will easily and unobtrusively monitor your bodily indicators and, if you choose, report them to your doctor, both to improve diagnoses, and to encourage you to adopt healthy practices such as a daily walk.
  • smart home devices such as the NEST or the voice-activated Ivee hub.

Even better, if device manufacturers get it about one of my Essential Truths about the IoT:  who else could use this data?, they will allow free access to their algorithms, and someone will realize that 1+1=3: the two devices are even more powerful when linked! In this case, the Jawbone UP is powerful, and so is the Nest, but something totally new is possible when they are linked:

“By connecting your UP24 with your Nest Thermostat, the temperature of your house will automatically adjust to a temperature you prefer – the moment you go to bed or wake up.

“Through UP Insights, we have shared the fact that an ideal sleeping environment is cooler, between 65 and 72 degrees. With the Nest integration, we no longer just tell you this fact. We make it a reality. Once your band enters Sleep Mode, your thermostat will kick down to your ideal temperature. And when you wake? You guessed it. Your thermostat will automatically adjust to a warmer temperature… all without leaving your bed.”

Nest-2_thermostatJawbone_UpHow cool (or hot, depending on the season…) is that?

I particularly like it for seniors because of one UP feature: instead of setting a precise wake-up alarm, you also have the option of creating a 30-minute window when it it should vibrate to wake you, with the exact time determined by what the UP determines is the ideal point in your natural sleep cycle.  Some working people on extremely tight morning schedules may not want to take advantage of that option, but for seniors, answering to no one but themselves, that would be an added benefit: get the best possible sleep, AND get up in a warm house (oh, and while you’re at it, why not link in some Phillips HUE lights and a coffee pot plugged in to a Belkin WeMo socket, so that you’ll also have fresh-brewed coffee and a bright kitchen?).  Sweet!

Do the math: one IoT-empowered device is nice, but link several more of them, and 1 + 1 = 3 — or more!

My speech on how the Internet of Things will aid Predictive Analytics

I spoke yesterday at the Predictive Analytics Manufacturing conference in Chicago, about a theme I first raised in the O’Reilly SOLID blog, about how the Internet of Things could bring about an “era of precision manufacturing.”

I argued that, as powerful as Predictive Analytics tools have been in analyzing manufacturing data and improving forecasting, their effectiveness has been artificially restricted because, for example, we can’t “see” inside production machinery to detect early signs of metal fatigue in time to avoid a costly breakdown, nor can we tell whether EVERY product on an assembly line will function when customers use them.

By contrast, I argued that the IoT will give us all this information, and, most important, allow everyone (from your supply chain and distribution network to EVERYONE in your company) to share this data on a real-time basis.  I warned that it will be management issues (those pesky IoT Essential Truths again!), such as whether to allow this sharing to take place, and whether to end departmental silos, that will be the biggest potential barrier to full IoT implementation.

Believe me, it will be an incredible transformation.  You can read the full text here.

Apple’s HomeKit: will it hasten widespread smart home adoption?

Been too busy to comment until now on Apple’s HomeKit platform, announced last week at its WWDC event.

(PROMINENT DISCLAIMER! Having to send huge amounts of money to Loyola of Maryland for the next three years [I feel like I’m in the Weimar Republic and must carry tons of money to Baltimore in a wheelbarrow, LOL] to secure my youngest’s sheepskin has led to a part-time sales job at the Apple Store — which doesn’t give me any inside insights into their strategy. Rest assured that nothing that will ever appear in this blog about Apple will be gathered from anything other than public sources. I know only what you know, and the opinions expressed here are solely my own).

As the announcement aimed at developers said,

“HomeKit is a new framework for communicating with and controlling connected devices in a user’s home. Apps can enable users to discover devices in their home and configure them, or you can create actions to control those devices. Users can group actions together and trigger them using Siri.”

As I wrote when Google bought Nest last winter, the most immediate impact will probably be to boost public visibility and understanding of the IoT and smart homes.

Beyond that, the ability to leverage Siri’s growing versatility will probably be a major factor in promoting IoT ease-of-use (given my pre-occupation with use of smart-home technology to encourage “aging in place” among seniors, it will be very important in getting the tech-averse and those who have trouble typing on a smart phone to use HomeKit-compliant devices. And then there’s the companion Health Kit, also announced at WWDC, which I’ll review in my next post.).

As you might expect given Apple’s overall zeal for close hardware and software integration, the developer’s kit emphasizes protocols and standards compliance — which should in turn enhance overall security and privacy protections, benefiting all players:

“Home Kit provides seamless integration between accessories that support Apple’s Home Automation Protocol and iOS devices, allowing for new advances in home automation. By promoting a common protocol for home automation devices and making a public API available for configuring and communicating with those devices, Home Kit makes possible a marketplace where the app a user controls their home with doesn’t have to be created by the vendor who made their home automation accessories, and where home automation accessories from multiple vendors can all be integrated into a single coherent whole without those vendors having to coordinate directly with each other.

Home Kit allows third-party apps to perform three major functions:

  1. Discover accessories and add them to a persistent, cross-device home configuration database.
  2. Display, edit, and act upon the data in the home configuration database.
  3. Communicate with configured accessories and services to get them to perform actions, such as turning on the lights in the living room.

The home configuration database is not only available to third-party apps, it’s also available to Siri. This allows users to give commands like, ‘Siri, turn on the lights in the living room.’ If a user creates a home configuration with logical groupings of accessories, services, and commands, Siri can make it very easy to accomplish sophisticated operations with voice control.”

Most important, individual IoT apps and devices can come together into “scenes,” in which a variety of actions (such as starting appliances, turning up the heat, etc., when you wake). IMHO, this emphasis on inter-operability is critically important to public acceptance of the IoT.  As I’ve written before about my IoT “Essential Truths,” two critical things we need to do is to ask “who else could use this data?,” and to democratize innovation. As I understand the above description, it will be like the iPhone ecosystem, where Apple will review all apps and decide whether they can be sold on whatever “store” the company creates for the IoT, but developers will be encouraged to run wild with their imaginations to create both new hardware and to come up with innovative mashups of data from all the various devices that will help integrate them into a comprehensive ecosystem in which, for example, an action by one device may trigger a follow-on action by another device.

The framework, logically, uses a home metaphor to organize all the components into a hierarchy:

  • Homes (HMHome) are the top level container, and represent a structure that a user would generally consider to be a single home. Users might have multiple homes that are far apart, such as a primary home and a vacation home. Or they might have two homes that are close together, but that they consider different homes—for example, a main home and a guest cottage on the same property.
  • Rooms (HMRoom) are optional parts of homes, and represent individual rooms in the home. Rooms don’t have any physical characteristics—size, location, etc. They’re simply names that are meaningful to the user, such as ‘living room’ or ‘kitchen’. Meaningful room names enable commands like, ‘Siri, turn on the kitchen lights.’
  • Accessories (HMAccessory) are installed into homes and assigned to rooms. These are the actual physical home automation devices, such as a garage door opener. If the user doesn’t configure any rooms, Home Kit assigns accessories to a special default room for the home.
  • Services (HMService) are the actual services provided by an accessory. Accessories have both user-controllable services, like a light, and services that are for their own use, like a firmware update service. Home Kit is most concerned with user-controllable services.A single accessory may have more than one user-controllable service. For example, most garage door openers have a service for opening and closing the door, and another service for the light on the garage door opener.
  • Zones (HMZone) are optional groupings of rooms in a home. ‘Upstairs’ and ‘downstairs’ would be represented by zones. Zones are completely optional—rooms don’t need to be in a zone. By adding rooms to a zone, the user is able to give commands to Siri such as, ‘Siri, turn on all of the lights downstairs.'”

As Fast Company observed, the HomeKit’s greatest contribution to the smart home may be streamlining interaction between various apps and devices through Siri:

“By opening up Siri to control third-party peripherals, the smart home experience will become infinitely more seamless. Up until now, controlling a smart device has meant unlocking a mobile device, launching an app, and then making adjustments–a bit too much friction for lowering the volume of the TV or dimming the lights.”

Apple has already lined up a great assortment of partners: iDevices, iHome, Cree, Honeywell, Haier, Philips, Kwikset, Netatmo, and Withings. Hmm: no Nest?

Still to come, of course, is to find out what Apple itself will develop in terms of smart home hardware, such as the long-rumored iWatch (again, I know nothing about this beyond what we’ve all read in blogs, etc.).

No matter what shape the company’s IoT strategy takes, the fact that the world’s second-most profitable company, and leading retailer,  has made such a public commitment to the IoT and smart homes should dramatically speed public adoption, and, perhaps equally important, create public awareness. After all, remember how quickly and dramatically the iPhone transformed the cell phone paradigm — and our lives.

NEXT: Apple’s Health Kit.

 

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The Interactive IoT Strategy Guide for C-level Execs I Wrote for SAP Is Live!

I’m very excited today, because “Managing the Internet of Things Revolution, I Guide Presented by SAP ,” the interactive guide to Internet of Things (IoT) strategy that I wrote (with astute editing from SAP’s Mahira Kalim!) is live!

"Managing the Internet of Things Revolution"

“Managing the Internet of Things Revolution”

It is aimed at C-level executives who will determine IoT strategy, and I’d really appreciate it if you’d pass the word to anyone you know in that category!

I think the guide’s most noteworthy aspect is that it doesn’t just dwell on the amazing transformations companies can achieve when the IoT is fully realized, but also places particular emphasis on IoT benefits companies can realize today, building on investments they have already made in transactional technology, to optimize their current operations:

  • add sensors to equipment and things to report their status in real-time, improving understanding of products’ performance and how they are used.
  • adopt predictive analytics, which will allow real-time decision making by combining data about things’ current state with past data such as sales, to optimize supply-chains, pinpoint demand predictions, and improve maintenance.
  • adopt big-data tools & cloud computing to manage the IoT’s quantum increases in data.
  • improve decision-making, by giving everyone who needs it real-time data.

It mentions my favorite old-school IoT early adopter, the Union Pacific Railroad, which has achieved 75% reductions in bearing-related derailments by placing sensors every 20 miles along its railbed, and has big plans to put sensors on every wheel once their price and size meet the “smart dust” goal.

The guide also looks to the future, when global implementation of the IoT will allow total transformation of companies. The benefits will include:

  • new revenues, from leasing of devices that includes giving customers real-time data to optimize performance.
  • delighting customers with products designed based on knowledge of how customers actually use them and rapidly refined based on data from the field.
  • creating synergistic partnerships between companies based on shared data.

SAP, I should emphasize, is a great partner for IoT initiatives. It delivers end-to-end real, repeatable, and scalable solutions for the IoT: connecting remote devices securely, integrating IoT data into business processes, and analyzing the resulting big data to generate actionable insights and optimize business in real-time. Here’s an eye-popping stat about them: SAP systems run 60% of the world’s GDP!

I hope you’ll enjoy the guide, and that you’ll pass it along. The print version was much longer than what the design firm was able to squeeze into the interactive version, so I’ll be releasing more of that in the blog in the near future!

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It’s Time for IoT-enabled “Real-Time” Regulation

Pardon me, but I still take the increasingly-unfashionable view that we need strong, activist government, to protect the weak and foster the public interest.

That’s why I’m really passionate about the concept (for what it’s worth, I believe I’m the first to propose this approach)  that we need Internet of Things enabled “real-time regulation” that wouldn’t rely on scaring companies into good behavior through the indirect means of threatening big fines for violations, but could actually minimize, or even avoid, incidents from ever happening, while simultaneously improving companies’ operating efficiency and reducing costly repairs. I wrote about the concept in today’s O’Reilly SOLID blog — and I’m going to crusade to make the concept a reality!

I first wrote about “real-time” regulation before I was really involved in the IoT: right after the BP Gulf blow-out, when I suggested that:

The .. approach would allow officials to monitor in real time every part of an oil rig’s safety system. Such surveillance could have revealed the faulty battery in the BP rig’s blowout preventer and other problems that contributed to the rig’s failure. A procedure could have been in place to allow regulators to automatically shut down the rig when it failed the pressure test rather than leaving that decision to BP.”

Since then I’ve modified my position about regulators’ necessarily having first-hand access to the real-time data, realizing that any company with half a brain would realize as soon as they saw data that there might be a problem developing (as opposed to having happened, which is what was too often the case in the past..) would take the initiative to shut down the operation ASAP to make a repair, saving itself the higher cost of dealing with a catastrophic failure.

As far as I’m concerned, “real-time regulation” is a win-win:

  • by installing the sensors and monitoring them all the time (typically, only the exceptions to the norm would be reported, to reduce data processing and required attention to the data) the company would be able to optimize production and distribution all the time (see my piece on “precision manufacturing“).
  • repair costs would be lower: “predictive maintenance” based on real-time information on equipment’s status is cheaper than emergency repairs.
  • the public interest would be protected, because many situations that have resulted in disasters in the past would instead be avoided, or at least minimized.
  • the cost of regulation would be reduced while its effectiveness would be increased: at present, we must rely on insufficient numbers of inspectors who make infrequent visits: catching a violation is largely a matter of luck. Instead, the inspectors could monitor the real-time data and intervene instantly– hopefully in time to avoid an incident.

Even though the IoT is not fully realized (Cisco says only 4% of “things” are linked at present), that’s not the case with the kind of high-stakes operation we’re most concerned with.  GE now builds about 60 sensors into every jet, realizing new revenues by proving the real-time data to customers, while being able to improve design and maintenance by knowing exactly what’s happening right now to the engines.  Union Pacific has cut dangerous and costly derailments due to bearing failures by 75% by placing sensors along the trackbed.

As I said in the SOLID post, it’s time that government begin exploring the “real-time regulation” alternative.  I’m contacting the tech-savvy Mass. delegation, esp. Senators Markey and Warren, and will report back on my progress toward making it a reality!

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