Why It’s So Hard to Predict Internet of Things’ Full Impact: “Collective Blindness”

I’ve been trying to come up with a layman’s analogy to use in explaining to skeptical executives about how dramatic the Internet of Things’ impact will be on every aspect of business and our lives, and why, if anything, it will be even more dramatic than experts’ predictions so far (see Postscapes‘ roundup of the projections).

See whether you thing “Collective Blindness” does justice to the potential for change?

 

What if there was a universal malady known as Collective Blindness, whose symptoms were that we humans simply could not see much of what was in the world?

Even worse, because everyone suffered from the condition, we wouldn’t even be aware of it as a problem, so no one would research how to end it. Instead, for millennia we’d just come up with coping mechanisms to work around the problem.

Collective Blindness would be a stupendous obstacle to full realization of a whole range of human activities (but, of course, we couldn’t quantify the problem’s impact because we weren’t even aware that it existed).

Collective Blindness has been a reality, because vast areas of our daily reality have been unknowable in the past, to the extent that we have just accepted it as a condition of reality.

Consider how Collective Blindness has limited our business horizons.

We couldn’t tell when a key piece of machinery was going to fail because of metal fatigue.

We couldn’t tell how efficiently an entire assembly line was operating, or how to fully optimize its performance.

We couldn’t tell whether a delivery truck would be stuck in traffic.

We couldn’t tell exactly when we’d need a parts shipment from a supplier, nor would the supplier know exactly when to do a new production run to be read.

We couldn’t tell how customers actually used our products.

That’s all changing now. Collective Blindness is ending, …. and will be eradified by the Internet of Things.

What do you think? Useful analogy?

Wearables/fitness apps & devices market heats up with Google Fit pending launch

Google appears set to give Apple’s pending Health app a run for its money with the forthcoming launch of the Google Fit tools. The competition should really benefit consumers and health care (Google has already released the developer’s kit). In announcing the kit, Google said the new tools will provide:

“… a single set of APIs for apps and device manufacturers to store and access activity data from fitness apps and sensors on Android and other devices (like wearables, heart rate monitors or connected scales). This means that with the user’s permission, you can get access to the user’s fitness history — enabling you to provide more interesting features in your app like personalized coaching, better insights, fitness recommendations and more.”

The releases only cover local storage of data, with cloud storage to follow.  As Forbes notes, that’s where the competition with Apple will be fierce:

Google Fit will integrate with a number of solutions from Google. Your Android powered smartphone or tablet is the obvious first point of contact, but you should also consider Google Fit’s potential integration with Google Glass and the Android Wear smartwatch program. All of these devices can use their sensor suite to gather and relay health data.”

As with Apple Health, Google wants developers and device manufacturers to settle on its standard as the hub for collection and integration of health and fitness data, while it may not be in the individual company’s best interests to commit to a single proprietary standard. As Forbes‘ Ewan Spence predicted, it’s unlikely that any end users are going to change platforms for their devices just because of new health apps and devices.

I guess it would be inappropriate to refer to any potential “killer apps” that could sway anyone in this category, eh?

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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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Apple iWatch: could they really make wearables acceptable to mass market?

The WSJ had a piece this week speculating on the rumored Apple iWatch (Disclaimer: I work part-time in an Apple Store. In that capacity I don’t know anything you don’t know — including whether the iWatch will actually ever happen! My sources for this blog are limited to publicly-available ones.).

The Journal notes that none of the smart watches released so far have had major penetration, and, as a further cautionary note, I’d point out that most people who start using a Jawb0ne UP, Nike FuelBand, etc. stop using them in several months (HELP: I recently read the data on that claim, but I can’t find the citation. Can you help me find it???).

HOWEVER, as I speculated recently in my posts on Apple’s soon-to-be-released HealthKit and HomeKit, the company has shown time-and-time-again over the past 15 years that it knows how to create disruptive devices (even though Clayton Christensen was skeptical, LOL!) and create huge new markets that make tech devices mainstream.

Given my new-found pre-occupation with “Smart Aging” through a combination of Quantified Self and smart home devices, I really like the idea of a smart watch for seniors. I haven’t worn a watch since I got my first Palm Pilot (wow: remember when they were cutting edge??), but seniors do, and I suspect that if they could get immediate feedback on their vital signs from something that was not only functional but fashionable and didn’t require any technical savvy, they wouldn’t feel stigmatized by wearing the watch, a critical factor in its widespread acceptance.

Let’s see what happens!

 

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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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Sweet! The Internet of Things at Friendly Fenway! Let’s Play Two!

Posted on 4th April 2014 in Internet of Things, marketing, mobile, retail

There’s only one thing I love more than the Internet of Things, and that’s the World Champion Boston Red Sox — the personification of Boston Strong. Last year’s championship meant more here than the two most recent ones, because it went a long way toward healing the terrible pain we collectively felt in the Hub of the Universe after the horrible Marathon Day bombings.

— source: The Boston Globe

So what could be sweeter than to blog about the new MLB mobile app debuting at Friendly Fenway today as part of Opening Day! Overall, 20 0f the 30 MLB clubs will use it this year.

The app’s enabled by Apple’s iBeacon technology, and the presence of iPhone users who have Bluetooth turned on will be detected by the iBeacon sensors, just as at the Apple Store and a growing number of retailers, such as Macy’s.  According to the Boston Globe, not all features will be available immediately, but eventually:

“Patrons can use it to plan a full day at Fenway, from viewing the Sox’s schedule to purchasing electronics tickets that scan at the entry gates — even to plot the best route to the park. Once inside, iPhone users with Bluetooth enabled can “check in” and be detected by iBeacon sensors to receive special offers from the team. If David Ortiz blasts a home run, for instance, the Sox could instantly disseminate coupons for Big Papi T-shirts.”

According to Sox’ COO Sam Kennedy, the app will help the teams compete with the allure of in-home technology:

““Our huge competitor is the advent of incredible HD technology, so we have to make sure the experience at Fenway is better than the experience at home … Obviously, we’re biased — we don’t think there’s any substitute for coming to Fenway Park — but that is what we’re competing with. You have the time commitment and the cost, so we need to make sure that when you’re coming you’re getting a great, fully integrated experience.”

Last year one of my sons and I had the incredible experience of sitting in row two behind the backstop (thank you Ron & Lisa!), and in my mind nothing can compete with a day or night at the “lyrical little bandbox of a ballpark,” as Updike famously wrote. But for those with less of a passion or who don’t have such an historic ball yard to to visit, the app can make a competitive difference.

And now, as Mr. Cubs, Ernie Banks, would say, “It’s a great day for a ball game. Let’s play two”!

 

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Seeing’s believing: the mother of all #IoT infographics is here!

Posted on 5th March 2014 in agriculture, design, Internet of Things, M2M, manufacturing, marketing

Like wow!  Trevor Harwood at the go-to IoT site Postscapes has teamed up with Harbor Research to create a “little” infographic (by my calculations it is about 2 miles horizontally by 3 miles vertically!!) that tells all you need to know about the IoT (download here: I wouldn’t attempt to do a screen grab: couldn’t do justice to it!).

I’ve been looking at it for several hours, and still haven’t processed all the information, but I think you’ll find it invaluable to introduce newbies to the IoT and all of its aspects (I was particularly impressed by several of the case studies that I hadn’t read about before).

Download it now, then study it carefully. Nice job!

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CK Kerley brings pizzazz to IoT marketing!

Posted on 7th January 2014 in Internet of Things, M2M, marketing

I’ve been away, really celebrating the holidays with my family and working on revisions to my e-book on managing the IoT for mainstream companies.  What better way to return than with a new publication that really gives some oomph to marketing the IoT?

The Smart Revolution

I met CK Kerley when she made some nice comments about my SmartStuff e-book intro to the IoT, and have been impressed by the energy and pizzazz that she brings to the marketing aspect of the IoT — elegant tech can only take you so far, and then you need to sell the stuff!

Now CK has a free e-book on marketing the IoT, The Smart Revolution, and it’s a great jumping off point for planning your own IoT marketing strategy. You can quickly finish it one one sitting — then come back to it again and again for future inspiration.

What comes through time and time again throughout the brief tome is something I hope also comes through in this blog and in my forthcoming e-book: the IoT won’t just make current things (literally and figuratively) better: if we fully exploit its potential, it will result in fundamental transformation!

Kerley emphasizes that marketers don’t have any choice about whether to embrace smart devices: consumers will force them to do so:

“The benefits of smart capabilities will have profound implications upon tomorrow’s customers who will be much more demanding, much more impatient, and much more savvy, with much higher standards.

“Mark my words, marketers: Dumb things won’t merely be an inconvenience to your customers; they will be all but intolerable to them—and wholly irrelevant in the 21st century marketplace. While smart brands give marketers a competitive advantage today, that advantage will rapidly transform into tomorrow’s cost of entry.”

Kerley also emphasizes that this transformation will be more than bells-and-whistles for consumers: it will have a profound, positive impact on their quality of life:

“Now marketers can move from developing individual dumb products for customers to engineering fuller, smart solutions that truly change customers’ lives. You are enabled to remove the mystery that has shrouded entire areas of your audiences’ lives and infuse it with transparency—empowering them to make better decisions that lead to better outcomes.

“Marketers can eliminate the overwhelming complexity that has plagued their customers’ lives and, through their smart brands, replace it with sheer simplicity. And you can expand the roles your brands play in customers’ activities—a move that your markets will welcome because it will transform static components into dynamic experiences for them.

“Finally, in a sea change for companies, we can migrate from mass- producing products shipped from our factories to micro-personalizing offerings that are only truly complete when they are in the hands of our customers.”

She’s taken the tack of organizing IoT marketing in terms of 5 basic principles, with several brand examples for each to show that the IoT is a current reality, not a laboratory dream. Think of those examples as ammunition to convince skeptical executives that the IoT is a reality and the time to develop a strategy is now!

Here they are:

  1. Value: “smart brands expand value by transforming single, dumb products into fuller, smart solutions.”  Examples:
    1. Asthmapolis Smart Inhaler: “transforming a product that manages asthma attacks into a solution that works to prevent asthmatic episodes” (because it’s location aware) (see my post about the TellSpec food analyzer)
    2. Nike+ Smart Basketball Shoes: “Transforming a sporting accessory into a fitness partner that tracks players’ progress in real time”
  2. Empowerment: “smart brands empower customers through new insights that drive better outcomes,” such as self-monitoring Quantified Self devices’ that empower patients to be full partners in their health care. Examples:
    1. MC10’s Smart BioStamp: “24/7 Monitoring of vital statistics takes the mystery out of health and arms patients and physicians with the data to provide better care.”
    2. Jawbone UP: My fav Xmas present? Other than the totally-outside-the-box, totally-unexpected MacBook Pro, I love my new Jawbone UP, and the ability it gives me to track my fitness activities!
  3. Simplicity: “smart brands remove complexity — and replace it with simplicity.”
    1. GlowCaps Smart Pill Bottles: “Removing the complexity of remembering to take medication by turning the simple pill bottle into a smart reminder.” Still one of my fav IoT pioneers!
    2. IntelligentM SmartBand“replacing the complexity of hand-hygiene compliance by turning healthcare workers’ wristbands into personal, real-time reminders.” This is my fav of Kerley’s examples: one of of my cousins got very, very sick at America’s finest hospital (it may or may not be in Baltimore…) from a Hospital-Acquired Infection — which usually occur because personnel forget to wash their hands! “Through RFID technology, the SmartBand works by communicating with other objects (such as IV bags) that reminds workers to sanitize their hands by buzzing three times. Then, once workers have thoroughly washed all areas of their hands for the correct amount of time, the wristband buzzes once, signaling workers that they can proceed with their treatments.”  How cool is that???
    3. Tagg Smart Pet Tracker: “Eliminating the complexity of keeping dogs in the yard by simply turning their collar into a smart pet tracker.”
  4. Experience: “Smart brands turn static elements into dynamic experiences.” Examples:

    1. Vail Resorts Smart Ski Pass: “turning the dumb ski pass into a dynamic device unleashes an entirely new skiing experience.” I got a little preview of this transformation skiing in the Berkshires last year: the lift ticket was a glorified RFID tag. However, this goes far beyond!”When visitors get to each lift, their tickets—enabled with RFID technology—are scanned and automatically record each skier’s lift rides, calculate their vertical skiing feet and tally their ski days.”To review progress, users simply need to access the online site or mobile app replete with stats, maps and achievements that tell the story of the customers’ “epic” days or “epic” seasons—with Vail featuring a separate kids’ site for children under 13. The site, app and smart ski ticket do more than just record data, they award skiers with special pins commemorating hundreds of milestones, special adventures and unique accomplishments for each day—and each season—at each of Vail’s collection of ski resorts.” Neat!
    2. GolfSense Smart Golf Sensor: “a smart globe becomes a new virtual participant — and a golfer’s secret weapon — in the game experience.” OK, this one hurts: for a short while this Fall, before I did a competitive products search, I thought I had the KILLER IoT golfing app. Alas, while it did have some unique elements, this and some other apps do a good enough job that there was no reason to develop mine. Fame and fortune remain around the bend (or on the next tee).
  5. Personalization: “smart brands are micro-personalized by customers, not mass-produced by companies.” Examples:
    1. The Nest themostat: everyone’s IoT poster child. Its sensors even observe if the house is vacant (although I’ve always worried that you might just be absorbed in a book for hours on end, not moving, so the Nest would decide to put you on chill. What’s your actual experience with it??)
    2. Target’s Smart Shopping Experience: (in the design phase) “An idea that turns a big-box store full of products into a personalized store tailored to your specific needs.” I will ignore the opportunity of a bad joke at Target’s expense…

So check it out, and, if you’re a corporate marketer, add your voice to our chorus to get your C-level execs fired up about the IoT’s revolutionary potential. Thanks, CK!

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Calculating Internet of Things ROI — important tool

Just came across this video while researching how to calculate ROI on Internet of Things investments for the e-book I’m writing, and felt compelled to share it.

That’s because it may be hard to calculate ROI fully and accurately for IoT investments if you aren’t thinking in terms of what my friend/patron Eric Bonabeau always pounds into my head: what can you do now that you couldn’t do before?

In the case of the IoT, there are  several things, such as “predictive maintenance,” that weren’t possible before and thus we don’t automatically think of calculating these benefits. It will require a conscious change in figuring ROI to account for them.

According to Axeda CMO Bill Zujewski, there are 6 levels of M2M/IoT implementation, and there are both cost savings and revenue enhancements as you move up the curve:

  1. Unconnected: this is where most firms are today. No M2M/IoT investments.
  2. Connected, pulling data for future use: No return yet.
  3. Service: the investment begins to pay off, primarily because of lower service costs.
    1. Cost reductions:
      1. fewer repair visits  Now that you’re harvesting real-time information about products’ condition, you may be able to optimize operating conditions remotely.
      2. first-time fix rate increases: Now you may know what the problem is before you leave, and can also take the proper replacement parts.
      3. reduced call length: You may know the problem in advance, rather than having to tinker once you’re there to discover it.
    2. Higher Revenues:
      1. Greater customer satisfaction. Customer doesn’t have to pay as much for repairs, down-time is reduced.
  4. Analyze: Putting data into BI and other analysis tools to get greater insights. For example, understand what are bad parts, when they’re failing.
    1. Cost reductions:
      1. fewer service visits: instead of monthly service you may be able to switch to quarterly.
      2. lowering returns
      3. improve product design
    2. Higher Revenues:
      1. Increase product up-time: due to better design and more effective maintenance, longer mean-time-to-failure.
  5. Data integration: begin to integrate data with business processes.
    1. Cost reductions:
      1. warrantees (especially for industrial equipment): fewer claims if you can monitor equipment’s operations, warn owner if they’re using it improperly.
      2. recalls: reduced.
    2. Higher revenues:
      1. pay-as-you-go leases: as we’ve discussed earlier, you may be able to increase revenues by leasing products based on how much the customer actually uses them (which you can now document), rather than selling them.
      2. increased sales of consumables: you’ll be able to know exactly when the customer needs them.
  6. Reinvent the customer experience: According to Zujewski, this is where you “put machine data into the end users’ hands” through a smartphone app, for example, that gives them access to the information.
    1. Cost reductions:
      1. reduced calls to call center: the end user will be able to initiate service and troubleshoot themselves.
    2. Higher revenues:
      1. increases sales: your product will be enhanced, leading to more successful sales calls. You also may be able to charge for some of the new data access services that make the product better.

Zujewski concludes by saying that all of these changes combine into 4 major benefits:

  1. world-class service
  2. business insights (such as better understanding of how your customers are using your products) from all the data and analysis
  3. improve business processes: integrating data allows you to improve the way you perform current processes
  4. highly-differentiated offering due to to the apps and information you can provide users. “You end up demo-ing your apps vs. just the machines”

I was really impressed with this presentation, and it makes sense to me as a framework for calculating ROI on Internet of Things investments (I want to think about other benefits of the IoT that were impossible before to see if there are any other factors that should also be calculated).

I’d be really interested in your reaction: is this a valid methodology? what other factors would you also include?

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