Why the Internet of Things Will Bring Fundamental Change “What Can You Do Now That You Couldn’t Do Before?”

The great Eric Bonabeau has chiseled it into my consciousness that the test of whether a new technology really brings about fundamental change is to always ask “What can you do now that you couldn’t do before?

Tesla Roadster

That’s certainly the case for the Tesla alternative last winter to a costly, time-consuming, and reputation-staining recall  (dunno: I must have been hiding under a rock at the time to have not heard about it).

In reporting the company’s action, Wired‘s story’s subtitle was “best example yet of the Internet of Things?”

I’d have to agree it was.

Coming at the same time as the godawful Chevy recall that’s still playing out and still dragging down the company, Tesla promptly and decisively response solved another potentially dangerous situation:

 

“‘Not to worry,’ said Tesla, and completed the fix for its 29,222 vehicle owners via software update. What’s more, this wasn’t the first time Tesla has used such updates to enhance the performance of its cars. Last year it changed the suspension settings to give the car more clearance at high speeds, due to issues that had surfaced in certain collisions.”

Think of it: because Tesla has basically converted cars into computers with four wheels, modifying key parts by building in sensors and two-way communications, it has also fundamentally changed its relationship with customers: it can remain in constant contact with them, rather than losing contact between the time the customer drives off the lot and when the customer remembers (hopefully..) to schedule a service appointment, and many modifications that used to require costly and hard-to-install replacement parts now are done with a few lines of code!

Not only can Tesla streamline recalls, but it can even enhance the customer experience after the car is bought: I remember reading somewhere that car companies may start offering customer choice on engine performance: it could offer various software configurations to maximize performance or to maximize fuel savings — and continue to tweak those settings in the future, just as computers get updated operating systems. That’s much like the transformation of many other IoT-enhanced products into services, where the customer may willingly pay more over a long term for a not just a hunk of metal, but also a continuing data stream that will help optimize efficiency and reduce operating costs.

Wired went on to talk about how the engineering/management paradigm shift represented a real change:

  • “In nearly all instances, the main job of the IoT — the reason it ever came to be — is to facilitate removal of non-value add activity from the course of daily life, whether at work or in private. In the case of Tesla, this role is clear. Rather than having the tiresome task of an unplanned trip to the dealer put upon them, Tesla owners can go about their day while the car ‘fixes itself.’
  • Sustainable value – The real challenge for the ‘consumer-facing’ Internet of Things is that applications will always be fighting for a tightly squeezed share of disposable consumer income. The value proposition must provide tangible worth over time. For Tesla, the prospect of getting one’s vehicle fixed without ‘taking it to the shop’ is instantly meaningful for the would-be buyer – and the differentiator only becomes stronger over time as proud new Tesla owners laugh while their friends must continue heading to the dealer to iron out typical bug fixes for a new car. In other words, there is immediate monetary value and technology expands brand differentiation. As for Tesla dealers, they must be delighted to avoid having to make such needling repairs to irritated customers – they can merely enjoy the positive PR halo effect that a paradigm changing event like this creates for the brand – and therefore their businesses.
  • Setting new precedents – Two factors really helped push Tesla’s capability into the news cycle: involvement by NHTSA and the word ‘recall.’ At its issuance, CEO Elon Musk argued that the fix should not technically be a ‘recall’ because the necessary changes did not require customers find time to have the work performed. And, despite Musk’s feather-ruffling remarks over word choice, the stage appears to have been set for bifurcation in the future by the governing bodies. Former NHTSA administrator David Strickland admitted that Musk was ‘partially right’ and that the event could be ‘precedent-setting’ for regulators.”

That’s why I’m convinced that Internet of Things technologies such as sensors and tiny radios may be the easy part of the revolution: the hard part is going to be fundamental management changes that require new thinking and new questions.

What can you do now that you couldn’t do before??

BTW: Musk’s argument that its software upgrade shouldn’t be considered a traditional “recall” meshes nicely with my call for IoT-based “real-time regulation.”  As I wrote, it’s a win-win, because the same data that could be used for enforcement can also be used to enhance the product and its performance:

  • 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. “

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!

Follow-up: Winners in Postscapes’ annual best-of-the-IoT contest

Following up on my recent post on my favorite nominees for the 2013 Postscapes best-of-the-IoT contest, here are the actual winners.  What do you think??

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Best quick intro to the IoT that I’ve seen!

Following up on my last post, I’ve found what I think is the best quick intro to the Internet of Things!

Internet of Things,” released today by the Center for Data Innovation (hadn’t heard of them! BTW, they also get points in my book for covering XBRL, the magic potion for data…) is a quick read: it has short intros to most of the major consumer-oriented areas affected by the IoT, from healthcare to home automation, combined with two examples for each of those topics. I hadn’t heard of some of the examples (thanks, authors Daniel Castro and Jordan Misra!), although most are frequently cited ones ranging from the Nest thermostat to the Vitality GlowCap.  All in all, they’ll show almost any skeptic that the IoT is already a reality and that it will change their life!

The report concludes with brief policy recommendations for government and business alike:

  • (for government agencies) lead by example, i.e., include funding for sensors in bridge projects, etc. Yea (you listening, Obama Administration?).
  • reduce barriers to data sharing (this harkens back to my Data Dynamite book: data gains value by being shared!).
  • give consumers access to their data (again, something I wrote about in Data Dynamite).
  • avoid inundating consumers with notices (a fine line, since they need to be informed, in plain English, about how their data will be used).
  • regulate the use of data, not the collection (in line with Mercatus Center’s advice)

All in all, a nice intro to the IoT!

BTW: Thanx to ol’ friend Pete O’Dell for turning me on to this report!

Usage-based Insurance: Preview of Radical Industry Change Through IoT

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

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!

 

 

Automated factories: that’s not the IoT’s potential!

It’s easy to see why some people make the assumption that one of the results of the Internet of Things will be fully-automated factories.

After all, if automatic, real-time machine-2-machine data sharing would allow self-starting and self-regulating machinery, wouldn’t that allow us a utopian vision of completely autonomous manufacturing?

Instead, I think Bosch’s Volkmar Denner nailed it with this blog entry. He says that rather than complete automation:

“Instead, it’s about finding ways to increase agility. Putting that into figures, optimizing resource allocation within a more flexible production process can result in a jump in productivity of as much as 30 percent. Our goal is to be able to customize even the smallest unit volumes while retaining optimum productivity, and ultimately leading to achieve optimized multi-variant series production.”

I agree totally that what’s going to happen is an end to centralized management and top-down control of information (see my last post, on “Buckyball Management”!, with decentralized, self-management emerging that could threaten old industry leaders who don’t get it (see my posts about how GE does get it!) :

“… And I’m convinced that this shift will provide opportunities for established companies to offer new business models. But they too need to watch out: the IoTS is shaking up what until now has been very much a closed market, opening it up for entirely new players such as IT companies. Here, the IoTS is not just about connecting objects, machines, and systems. On the contrary, it’s also about how to use the data that this connectivity generates. And instead of using this information only within the plant itself, now everyone along the manufacturing chain can be given access to the data over the internet. Once again, the knowledge gained from these data can be applied to generate new business models.”

Denner says that one of the #IoT services that Bosch — the leading supplier of automotive sensors and one of the leaders in industrial sensors — is developing is predictive maintenance, which innovators such as GE (with its jet turbines) and the railroads (I’ve never traced my ancestry on my father’s side, but I harbor the possibility that I’m descended from the Stephensons, pere et fils, who invented the locomotive, so I have a warm spot in my heart for that industry…) are already doing.  As Denner says, “Having such a solution in place allows organizations to offer their customers new and improved levels of service, including a guarantee of reduced downtimes.”

So don’t count out the human element in manufacturing once the IoT is commonplace: in fact, it will be more important, and more valuable, than ever!

MQTT: important Internet of Things facilitator?

Posted on 9th May 2013 in automotive, Internet of Things, M2M, manufacturing

As I mentioned at the time, part of the news when IBM announced its new heavy-duty MessageSight appliance to handle the vast quantity of real-time data sharing between sensors on the Internet of Things was that MessageSight would use the MQTT protocol to communicate the data.

MQTT, or Message Queue Telemetry Transport (whew!), is an existing protocol for sharing telemetry-style data which OASIS recently proposed as a standard for M2M data sharing. According to IBM, its primary virtues are “low power consumption, high performance and reliability (which) allow real time updates that can be acted upon immediately,” — important because of the need to reduce sensors’ drain on their batteries. Other types of pervasive devices that might use the protocol include “mobile phones, embedded systems on vehicles, or laptops and full scale computers.”

According to GigaOm, “..it’s already in use for satellite transmissions and in medical and industrial settings where low-bandwidth communications are essential. ” In addition to IBM, it’s already supported by Kaazing, Red Hat, TIBCO, and Cisco.

According to The New York Times, MQTT advocates say it could be the M2M equivalent of the Web’s HTTP protocol.  Co-inventor Andy Stanford-Clark of IBM is one of my fav IoT experimenters (you’ve got to see his TedX talk about how he’s automated his home on the Isle of Wight — and didn’t stop there, making the whole island a laboratory for the IoT!). He and co-inventor Arlen Nipper wrote the first version of MQTT in 1998 for oil platform sensors.

As in several of my recent posts, the automotive industry was singled out by the NYT as one field where MQTT might be applied:

“Vijay Sankaran, director of application development for Ford, said improved message-handling technology will be vital to the company’s plans for automated diagnostics and new consumer services.

“Mr. Sankaran pointed to two examples. In the Focus Electric car, he said, Ford wants to get continual, detailed sensor data on the state and performance of the vehicle’s electric battery, then feed that information into product development.

“And drivers, Mr. Sankaran said, seek to do more things while in their cars. A stock trader, for example, might want to continue trading from the road. If the trader sent in an order to sell 30,000 shares of Apple, he said, that transaction must be reliably and securely communicated.

“’You need an advanced messaging engine for these kinds of services,’ Mr. Sankaran said.”

The Times article points out that for MQTT to achieve its full potential it must be adopted not only by IT companies such as IBM and Cisco, but also by “…industrial technology heavyweights including General Electric, Honeywell, Siemens and United Technologies.

These companies make many of the sensor-equipped big things in the so-called Internet of Things — like jet engines, power turbines and oil field equipment.”

MQTT looks like it will play a major role in allowing harvesting of data from sensor networks, but we’ll have to see how much of an IoT lingua franca it really becomes!

Major changes for car industry due to Internet of Things

Posted on 8th May 2013 in automotive, environmental, Internet of Things

I just blogged on the Huffington Post about how the Internet of Things will mean major changes for the auto industry.

IBM’s MessageSight — mastering IoT’s huge data volumes

Posted on 30th April 2013 in automotive, Internet of Things, mobile

The good thing about the Internet of Things is that it will give us unprecedented amounts of real-time data: IMS Research predicts the “… more than 22 billion web-connected devices by 2020… will generate more than 2.5 quintillion bytes of new data every day.

The bad thing about the Internet of Things is that it will give us unprecedented amounts of real-time data: how can we possibly process it, let alone reduce it to manageable, intelligible (remember the “Wisdom Pyramid?” — just accumulating data isn’t the goal: it’s turning it into actionable wisdom) information?

Now IBM has introduced a critical tool to help deal with that volume of data: the MessageSight appliance.

It uses another important new breakthrough, the Message Queuing Telemetry Transport (MQTT), the proposed lightweight open standard for M2M communication (more about that in a future post).

MessageSight is designed specifically to handle the explosion in mobile computing devices. It can support one million concurrent sensors or smart devices and can scale up to thirteen million messages per second.  Wow!

“’When we launched our Smarter Planet strategy nearly five years ago, our strategic belief was that the world was going to be profoundly changed as it became more instrumented, interconnected and intelligent. IBM MessageSight is a major technological step forward in continuing that strategy,’ said Marie Wieck, general manager, WebSphere, IBM.  ‘Until now, no technology has been able to handle this volume of messages and devices. What’s even more exciting is that this only scratches the surface of what’s to come as we continue down this path of a Smarter Planet.’”

IBM cites a possible application in the auto industry:

“For instance, an automotive manufacturer can use IBM MessageSight to help manage the features and services of its automobiles. With thousands of sensors in each car, a dealer can now be notified when a ‘check engine’ light turns on in a specific car. Based on the information transmitted by the engine sensor, the dealer could then notify the owner that there is a critical problem and they should get their car serviced immediately.”

MessageSight is part of IBM’s MobileFirst package of mobile enterprise software, services, cloud and analytics capabilities. The company claims:

“IBM’s MobileFirst platform is the first in the industry to speed the process of building apps by enabling companies to seamlessly integrate analytics and capture the complete on-device experience of how customers are using apps, including insight into gestures, dwell time and navigation.”

Among its features, MobileFirst now offers geo-location services:  “geo-location triggers can be used to extend applications to take contextual action based on a user’s location to provide personalized service.” It also offers cloud services for mobile.

“According to IDC, the market for mobile enterprise infrastructure software and services was $14.5 billion in 2012, growing at a compound annual growth rate of 16.3%. IDC expects this market to reach $30.9 billion in 2016.”

I’ve long believed that IBM is THE leader in the Internet of Things, particularly given the tangible results its Smarter Cities programs have achieved (BTW, regarding my post yesterday about government getting up-to-speed on the IoT, the Obama Administration would do well to look at Smarter Cities as an operating manual…). MessageSight should cement that lead in the technology field!