Great Podcast Discussion of #IoT Strategy With Old Friend Jason Daniels

Right after I submitted my final manuscript for The Future is Smart I had a chance to spend an hour with old friend Jason Daniels (we collaborated on a series of “21st Century Homeland Security Tips You Won’t Hear From Officials” videos back when I was a homeland security theorist) on his “Studio @ 50 Oliver” podcast.

We covered just about every topic I hit in the book, with a heavy emphasis on the attitude shifts (“IoT Essential Truths” needed to really capitalize on the IoT and the bleeding-edge concept I introduce at the end of the book, the “Circular Corporation,” with departments and individuals (even including your supply chain, distribution network and customers, if you choose) in a continuous, circular management style revolving around a shared real-time IoT hub.  Hope you’ll enjoy it!

IoT Design Manifesto 1.0: great starting point for your IoT strategy & products!

Late in the process of writing my forthcoming IoT strategy book, The Future Is Smart, I happened on the “IoT Design Manifesto 1.0” site. I wish I’d found it earlier so I could have featured it more prominently in the book.

The reason is that the manifesto is the product (bear in mind that the original team of participants designed it to be dynamic and iterative, so it will doubtlessly change over time) of a collaborative process involving both product designers and IoT thought leaders such as the great Rob van Kranenburg. As I’ve written ad nauseam, I think of the IoT as inherently collaborative, since sharing data rather than hoarding it can lead to synergistic benefits, and collaborative approaches such as smart cities get their strength from an evolving mishmash of individual actions that gets progressively more valuable.

From the names, I suspect most of the Manifesto’s authors are European. That’s important, since Europeans seem to be more concerned, on the whole, about IoT privacy and security than their American counterparts, witness the EU-driven “privacy by design” concept, which makes privacy a priority from the beginning of the design process.

At any rate, I was impressed that the manifesto combines both philosophical and economic priorities, and does so in a way that should maximize the benefits and minimize the problems.

I’m going to take the liberty of including the entire manifesto, with my side comments:

  1. WE DON’T BELIEVE THE HYPE. We pledge to be skeptical of the cult of the new — just slapping the Internet onto a product isn’t the answer, Monetizing only through connectivity rarely guarantees sustainable commercial success.
    (Comment: this is like my “just because you can do it doesn’t mean you should” warning: if making a product “smart” doesn’t add real value, why do it?)*
  2. WE DESIGN USEFUL THINGS. Value comes from products that are purposeful. Our commitment is to design products that have a meaningful impact on people’s lives; IoT technologies are merely tools to enable that.
    (Comment: see number 1!)
  3. “WE AIM FOR THE WIN-WIN-WIN. A complex web of stakeholders is forming around IoT products: from users, to businesses, and everyone in between. We design so that there is a win for everybody in this elaborate exchange.
    (Comment:This is a big one in my mind, and relates to my IoT Essential Truth #2 — share data, don’t hoard it — when you share IoT data, even with competitors in some cases [think of IFTTT “recipes”] — you can create services that benefit customers, companies, and even the greater good, such as reducing global warming).
  4. WE KEEP EVERYONE AND EVERYTHING SECURE. With connectivity comes the potential for external security threats executed through the product itself, which comes with serious consequences. We are committed to protecting our users from these dangers, whatever they may be.
    (Comment: Amen! as I’ve written ad nauseum, protecting privacy and security must be THE highest IoT priority — see next post below!).
  5. WE BUILD AND PROMOTE A CULTURE OF PRIVACY. Equally severe threats can also come from within. Trust is violated when personal  information gathered by the product is handled carelessly. We build and promote a culture of integrity where the norm is to handle data with care.
    (Comment:See 4!).
  6. WE ARE DELIBERATE ABOUT WHAT DATA WE COLLECT. This is not the business of hoarding data; we only collect data that serves the utility of the product and service. Therefore, identifying what those data points are must be conscientious and deliberate.
    (Comment: this is a delicate issue, because you may find data that wasn’t originally valuable becomes so as new correlations and links are established. However, just collecting data willy-nilly and depositing it in an unstructured “data lake” for possible use later is asking for trouble if your security is breeched.).
  7. WE MAKE THE PARTIES ASSOCIATED WITH AN IOT PRODUCT EXPLICIT. IoT products are uniquely connected, making the flow of information among stakeholders open and fluid. This results in a complex, ambiguous, and invisible network. Our responsibility is to make the dynamics among those parties more visible and understandable to everyone.
    (Comment: see what I wrote in the last post, where I recommended companies spell out their privacy and usage policies in plain language and completely).
  8. WE EMPOWER USERS TO BE THE MASTERS OF THEIR OWN DOMAIN. Users often do not have control over their role within the network of stakeholders surrounding an IoT product. We believe that users should be empowered to set the boundaries of how their data is accessed and how they are engaged with via the product.
    (Comment: consistent with prior points, make sure that any permissions are explicit and  opt-in rather than opt-out to protect users — and yourself (rather avoid lawsuits? Thought so…)
  9. WE DESIGN THINGS FOR THEIR LIFETIME. Currently physical products and digital services tend to be built to have different lifespans. In an IoT product features are codependent, so lifespans need to be aligned. We design products and their services to be bound as a single, durable entity.
    (Comment: consistent with the emerging circular economy concept, this can be a win-win-win for you, your customer and the environment. Products that don’t become obsolete quickly but can be upgraded either by hardware or software will delight customers and build their loyalty [remember that if you continue to meet their needs and desires, there’s less incentive for customers to check out competitors and possibly be wooed away!). Products that you enhance over time and particularly those you market as services instead of sell will also stay out of landfills and reduce your pduction costs.
  10. IN THE END, WE ARE HUMAN BEINGS. Design is an impactful act. With our work, we have the power to affect relationships between people and technology, as well as among people.  We don’t use this influence to only make profits or create robot overlords; instead, it is our responsibility to use design to help people, communities, and societies  thrive.
    Comment: yea designers!!)

I’ve personally signed onto the Manifesto, and do hope to contribute in the future (would like something explicit about the environment in it, but who knows) and urge you to do the same. More important, why start from scratch to come up with your own product design guidelines, when you can capitalize on the hard work that’s gone into the Manifesto as a starting point and modify it for your own unique needs?

*BTW: I was contemptuous of the first IoT electric toothbrush I wrote about, but since talked to a leader in the field who convinced me that it could actually revolutionize the practice of dentistry for the better by providing objective proof that  patient had brushed frequently and correctly. My bad!

“The House That Spied on Me”: Finally Objective Info on IoT Privacy (or Lack Thereof)

Posted on 25th February 2018 in data, Essential Truths, Internet of Things, privacy, security, smart home

Pardon a political analogy, Just as the recent indictment of 13 Russians in the horrific bot campaign to undermine our democracy (you may surmise my position on this! The WIRED article about it is a must read!) finally provided objective information on the plot, so too Kasmir Hill’s and Surya Matu’s excruciatingly detailed “The House That Spied on Me”  finally provides objective information on the critical question of how much personal data IoT device manufacturers are actually compiling from our smart home devices.

This is critical, because we’ve previously had to rely on anecdotal evidence such as the Houston baby-cam scandal, and that’s not adequate for sound government policy making and/or advice to other companies on how to handle the privacy/security issue.

Last year, Hill (who wrote one of the first articles on the danger when she was at Forbes) added just about every smart home you can imagine to her apartment (I won’t repeat the list: I blush easily…) . Then her colleague, Matu, monitored the outflow of the devices using a special router he created to which she connected all the devices:

“… I am basically Kashmir’s sentient home. Kashmir wanted to know what it would be like to live in a smart home and I wanted to find out what the digital emissions from that home would reveal about her. Cybersecurity wasn’t my focus. … Privacy was. What could I tell about the patterns of her and her family’s life by passively gathering the data trails from her belongings? How often were the devices talking? Could I tell what the people inside were doing on an hourly basis based on what I saw?”

The answer was: a lot (I couldn’t paste the chart recording the numbers here, so check the article for the full report)!

As Matu pointed out, with the device he had access to precisely the data about Hill’s apartment that Comcast could collect and sell because of a 2017 law allowing ISPs to sell customers’ internet usage data without their consent — including the smart device data.  The various devices sent data constantly — sometimes even when they weren’t being used! In fact, there hasn’t been a single hour since the router was installed in December when at least some devices haven’t sent data — even if no one was at home!

BTW: Hill, despite her expertise and manufacturers’ claims of ease-of-setup, found configuring all of the devices, and especially making them work together, was a nightmare. Among other tidbits about how difficult it was: she had to download 14 different apps!  The system also directly violated her privacy, uploading a video of her walking around the apartment nude that was recorded by the Withings Home Wi-Fi Security (ahem…) Camera with Air Quality Sensors. Fortunately the offending video was encrypted. Small comfort.

Hill came to realize how convoluted privacy and security can become with a smart home:

“The whole episode reinforced something that was already bothering me: Getting a smart home means that everyone who lives or comes inside it is part of your personal panopticon, something which may not be obvious to them because they don’t expect everyday objects to have spying abilities. One of the gadgets—the Eight Sleep Tracker—seemed aware of this, and as a privacy-protective gesture, required the email address of the person I sleep with to request his permission to show me sleep reports from his side of the bed. But it’s weird to tell a gadget who you are having sex with as a way to protect privacy, especially when that gadget is monitoring the noise levels in your bedroom.”

Matu reminds us that, even though most of the data was encrypted, even the most basic digital exhaust can give trained experts valuable clues that may build digital profiles of us, whether to attract us to ads or for more nefarious purposes:

“It turns out that how we interact with our computers and smartphones is very valuable information, both to intelligence agencies and the advertising industry. What websites do I visit? How long do I actually spend reading an article? How long do I spend on Instagram? What do I use maps for? The data packets that help answer these questions are the basic unit of the data economy, and many more of them will be sent by people living in a smart home.”

Given the concerns about whether Amazon, Google, and Apple are constantly monitoring you through your smart speaker (remember when an Echo was subpoenaed  in a murder case?), Matu reported that:

“… the Echo and Echo Dot … were in constant communication with Amazon’s servers, sending a request every couple of minutes to Even without the “Alexa” wake word, and even when the microphone is turned off, the Echo is frequently checking in with Amazon, confirming it is online and looking for updates. Amazon did not respond to an inquiry about why the Echo talks to Amazon’s servers so much more frequently than other connected devices.”

Even the seemingly most insignificant data can be important:

“I was able to pick up a bunch of insights into the Hill household—what time they wake up, when they turn their lights on and off, when their child wakes up and falls asleep—but the weirdest one for me personally was knowing when Kashmir brushes her teeth. Her Philips Sonicare Connected toothbrush notifies the app when it’s being used, sending a distinctive digital fingerprint to the router. While not necessarily the most sensitive information, it made me imagine the next iteration of insurance incentives: Use a smart toothbrush and get dental insurance at a discount!”

Lest you laugh at that, a dean at the BU Dental School told me much the same thing: that the digital evidence from a Colgate smart brush, in this case, could actually revolutionize dentistry, not only letting your dentist how well, or not, you brushed, but perhaps lowering your dental insurance premium or affecting the amount your dentist was reimbursed. Who woulda thunk it?

Summing up (there’s a lot of additional important info in the story, especially about the perfidious Visio Smart TV, that had such a company-weighted privacy policy that the FTC actually forced it to turn it off the “feature” and pay reparations, so do read the whole article), Hill concluded:

“I thought the house would take care of me but instead everything in it now had the power to ask me to do things. Ultimately, I’m not going to warn you against making everything in your home smart because of the privacy risks, although there are quite a few. I’m going to warn you against a smart home because living in it is annoying as hell.”

In addition to making privacy and security a priority, there is another simple and essential step smart home (and Quantified Self) device companies must take.

When you open the box for the first time, the first thing you should see must be a prominently displayed privacy and security policy, written in plain (and I mean really plain) English, and printed in large, bold type. It should make it clear that any data sharing is opt-in, and that you have the right to not agree, and emphasize the need for detailed, unique passwords (no,1-2-3-4 or the ever-popular “password” are not enough.

Just to make certain the point is made, it needs to be at the very beginning of the set-up app as well. Yes, you should also include the detailed legalese in agate type, but the critical points must be made in the basic statement, which needs to be reviewed not just by the lawyers, but also a panel of laypeople, who must also carry out the steps to make sure they’re really easily understood and acted on. This is not just a suggestion. You absolutely must do it or you risk major penalties and public fury. 

Clearly, this article gives us the first objective evidence that there’s a lot more to do to assure privacy and security for smart homes (and that there’s also a heck of a lot of room for improvement on how the devices play together!), reaffirming my judgement that the first IoT Essential Truth remains “make privacy and security your highest priority.” If this doesn’t get the focus it deserves, we may lose all the benefits of the IoT because of legitimate public and corporate concern that their secrets are at risk. N.B.!

Mycroft Brings Open-Source Revolution to Home Assistants

Brilliant!  Crowd-funded (even better!) Mycroft brings the rich potential of open-source to the growing field of digital home assistants.   I suspect it won’t be long until it claims a major part of the field, because the Mycroft platform can evolve and grow exponentially by capitalizing on the contributions of many, many people, not unlike the way IFTTT has with its crowd-sourced smart home “recipes.”

According to a fascinating ZD Net interview with its developer, Joshua Montgomery, his motivation was not profit per se, but to create a general AI intelligence system that would transform a start-up space he was re-developing:

“He wanted to create the type of artificial intelligence platform that ‘if you spoke to it when you walked in the room, it could control the music, control the lights, the doors’ and more.”


Montgomery wanted to do this through an open-source voice control system but for there wasn’t an open source equivalent to Siri or Alexa.  After building the natural language, open-source AI system to fill that need (tag line, “An Artificial Intelligence for Everyone”) he decided to build a “reference device” as the reporter terms it (gotta love that techno speak. In other words, a hardware device that could demonstrate the system). That in turn led to a crowdsourced campaign on Kickstarter and Backerkit to fund the home hub, which is based on the old chestnut of the IoT, Raspberry Pi. The result is a squat, cute (looks like a smiley face) unit, with a high-quality speaker.  

Most important, when the development team is done with the AI platform, Mycroft will release all of the Mycroft AI code under GPL V3, inviting the open-source community to capitalize and improve on it.  That will place Mycroft squarely in the open-source heritage of Linux and Mozilla.

Among other benefits, Mycroft will use natural language processing to activate a wide range of online services, from Netflix to Pandora, as well as control your smart home devices.

Mycroft illustrates one of my favorite IoT Essential Truths: we need to share data, not hoard it. I don’t care how brilliant your engineers are: they are only a tiny percentage of the world population, with only a limited amount of personal experience (especially if they’re callow millennials) and interests. When you go open source and throw your data open to the world, the progress will be greater as will be the benefits — to you and humanity.

Human Side of IoT: Local Startup Empowers Forgotten Shop Floor Workers!

Let’s not forget: human workers can and must still pay a role in the IoT!

Sure, the vast majority of IoT focus is on large-scale precision and automated manufacturing (Industrie 4.0 as it is known in Germany, or the Industrial Internet here). However, an ingenious local startup, Tulip, is bringing IoT tools to the workbench and shop floor, empowering individual industrial engineers to create no-code, low-code apps that can really revolutionize things in the factory.  Yes, many jobs will be replaced by IoT tech, but with Tulip, others will be “enabled” — workers will still be there to make decisions, and they’ll be empowered as never before.

Um, I’m thinking superhuman factory Transformers, LOL!

The Tulip IoT gateway allows anyone to add sensors, tools, cameras and even “pick to light bins” (never heard that bit of shop lingo, but they looked cool in video) to the work station, without writing a line of code, because of the company’s diverse drivers support factory floor devices. It claims to “fill the gap between rigid back-end manufacturing IT systems and the dynamic operations taking place on the shop floor.”

Rony Kubat, the young MIT grad who’s the company’s co-founder is on a mission “to revolutionize manufacturing software,” as he says, because people who actually have to play a hands-on roll in product design and production on  shop floor have been ignored in the IoT, and many processes such as training are still paper-based:

“Manufacturing software needs to evolve. Legacy applications neglect the human side of manufacturing and therefore suffer from low adoption. The use of custom, expensive-to-maintain, in-house solutions is rampant. The inability of existing solutions to address the needs of people on the shop floor is driving the proliferation of paper-based workflows and the use of word processing, spreadsheet and presentation applications as the mainstay of manufacturing operations. Tulip aims to change all this through our intuitive, people-centric platform. Our system makes it easy for manufacturers to connect hands-on work processes, machines and backend IT systems through flexible self-serve manufacturing apps”.

While automation in factory floors continues to grow, manufacturers often find their hands-on workforce left behind, using paper and legacy technology. Manufacturers are seeing an enormous need to empower their workforce with intuitive digital tools. Tulip is a solution to this problem. Front-line engineers create flexible shop-floor apps that connect workers, machines and existing IT systems. These apps guide shop-floor operations enabling real-time data collection and making that data useful to workers on factory floors. Tulip’s IoT gateway integrates the devices, sensors and machines on the shop floor, making it easy to monitor and interact with previously siloed data streams (you got me there: I HATE siloed data). The platform’s self-serve analytics engine lets manufacturers turn this data into actionable insights, supporting continuous process improvement.

The company has grown quickly, and has dozens of customers in fields as varied as medical devices, pharma, and aerospace. The results are dramatic and quite varied:

  • Quality: A Deloitte analysis of Tulip’s use at Jabil, a global contract manufacturer, documented 10+% production increases. It reduced quality issues in manual assembly by more than 10%. found production yield increased by more than 10 percent, and manual assembly quality issues were reduced by 60 percent in the initial four weeks of operation.
  • Training: Other customers reduced the amount of time to train new operators by  90 percent, in a highly complicated, customized and regulated biopharmaceutical training situation: “Previously, the only way to train new operators was to walk them repeatedly through all the steps with an experienced operator and a process engineer. Tulip quickly deployed its software along with IoT gateways for the machines and devices on the process, and managed to cut training time almost by half.”
  • Time to Market: They reduced a major athletic apparel maker’s time to market by 50% for hundreds of new product variations. That required constantly evaluating the impact of dozens of different quality drivers to isolate defects’ root causes — including both manual and automated platforms. Before Tulip, it could take weeks of analysis until a process was ready for production. According to the quality engineer on the project, “I used Tulip’s apps to communicate quality issues to upstream operators in real-time. This feedback loop enabled the operators to take immediate corrective action and prevent additional defects from occurring.”

Similar to my friends at Mendix, the no-code/low-code aspect of Tulip’s Manufacturing App Platform lets process engineers without programming backgrounds create shop floor apps through interactive step-by-step work instructions. “The apps give you access through our cloud to an abundance of information and real-time analytics that can help you measure and fine-tune your manufacturing operations,” Tulip Co-Founder Natan Linder says (the whiz-kid is also chairman of 3-D printer startup Formlabs). 

Linder looked at analytics apps that let users create apps through simple tools and thought why not provide the same kind of tools for training technicians on standard operating procedures or for building product or tracking quality defects? “This is a self-service tool that a process or quality engineer can use to build apps. They can create sophisticated workflows without writing code…. Our cloud authoring environment basically allows you to just drag and drop and connect all the different faucets and links to create a sophisticated app in minutes, and deploy it to the floor, without writing code,” he says. Tulip enables sharing appropriate real-time analytics with each team member no matter where they are and to set up personal alerts for the data that’s relevant to each.

IMHO, this is a perfect example of my IoT “Essential Truth” of “empowering every worker with real-time data.”  Rather than senior management parceling out (as they saw fit) the little amount of historical data that was available in the past, now workers can share (critical verb) that data instantly and combine it with the horse sense that can only be gained by those actually doing the work for years. Miracles will follow!

Writ large, the benefits of empowering shop floor workers are potentially huge.  According to the UK Telegraph, output can increase 8-9 %, while cutting costs 7-8%, cutting costs approximately 7-8 percent. The same research estimates that industrial companies “could see as much as a 300 basis point boost to their bottom line.”

Examples of the relevant shop-floor analytics include:

  • “Show real-time metrics from the shop floor
  • Report trends in your operations
  • Send customized alerts based on user defined triggers
  • Inform key stakeholders with relevant data”

IDC Analyst John Santagate neatly sums up the argument for empowering workers through the IoT thusly:

“With all of the talk and concern around the risk of losing the human element in manufacturing, due to the increasing use of robotics, it is refreshing to see a company focus on improving the work that is still done by human hands.  We typically hear the value proposition of deploying robots and automation of improvements to efficiency, quality, and consistency.  But what if you could achieve these improvements to your manufacturing process by simply applying analytics and technology to the human effort?  This is exactly what they are working on at Tulip.  

“Data analytics is typically thought about at the machine level. Manufacturers measure things such as throughput, efficiency, and quality by applying sensors to their manufacturing equipment, capturing the data signals, and conducting analytics.  The analytics provide an understanding of the health of the manufacturing process and enable them to make any necessary changes to improve the process.  Often, such efforts are top down driven.  Management drives these projects in order to improve the performance of the business.  An alternative approach is to enable the production floor to proactively identify improvement opportunities and take action, a bottom-up approach. For this self-service approach to succeed shop-floor engineers need a flexible platform such as Tulip’s, that allows them to replace paper-based processes with technology and build the applications that enable them to manage hands-on processes.  The real time analytics and visibility of hands-on manufacturing processes from Tulip’s platform puts the opportunity to identify improvement opportunities directly in the hands of people engaged in the work cells.

“Digital transformation in manufacturing is about leveraging advanced digital technology to improve how a company operates.  But, as the manufacturing industry focuses on digital transformation it must not forget the value of the human element.  Indeed, we don’t often think about digital transformation in relation to human effort, but this is exactly the sort of thinking that can deliver some of the early wins in digital transformation. “ 

Well said — and thanks to Tulip for filling a critical and often overlooked aspect of the IoT!

I’m reminded of my old friend Steve Clay-Young, who managed the BAC’s shop in Boston, and first alerted me to the “National Home- workshop Guild” which Popular Science started in the Depression and then played a critical part in the war effort. Craftsmen who belonged all got plans and turned out quality products on their home lathes.  I can definitely see a rebirth of the concept as the cost of 3-D printers from Kubat’s other startup, Formlabs drops, and we can have the kind of home (or at least locally-based production that Eric Drexler dreamed of in his great Engines of Creation (which threw in another transformational production technology, nanotech). 

I’m clearing space in my own workshop so I can begin production on IoT/nanotech/3-D printed products. Move over, GE.

Servitization With IoT: Weird Biz-Speak, But Sound Strategy

I love it when manufacturers stop selling things — and their revenues soar!

That’s one of the things I’ll cover on May 2nd  in”Define Your Breakout IoT” strategy, (sign-up) a webinar I’m doing with Mendix. I’ll outline an incremental approach to the IoT in which you can make some early, tentative steps (such as implementing Augury’s hand-held vibration sensor as a way to start predictive maintenance) and then, as you gain experience and increase savings and efficiency, plow the savings back into more dramatic transformation.

One example of the latter that I’ll detail in the webinar is one of my four “Essential Truths” of the IoT: rethink products. By that I meant not only reinventing products to be smart (especially by building in sensors so they can report their real-time status 24/7), but, having done that, exploring new ways to market them.  Or, as one graphic I’ll use in the presentation puts it, in mangled biz-speak, “servitization.”

              Hortilux bulbs

Most of the examples I’ve written about in that regard have been from major businesses, such as GE and Rolls-Royce jet turbines, that are now leased as services (with the price determined by thrust generated), but Mendix has a smaller, niche client that also successfully made the conversion: Hortilux, a manufacturer of grow lights for greenhouses.

The Hortilux decided to differentiate itself in an increasingly competitive grow light market by evolving from simply selling bulbs to instead providing a comprehensive continuing service that helps its customers optimize availability and lifetime of grow light systems, while cut energy cost.     

Using Mendix tools, they created Hortisense, a digital platform that monitors and safeguards various grow light processes in the greenhouse using sensors and PLCs. Software applications interpret the data and present valuable information to the grower anytime, anywhere, and on any device.

With Mendix, Hortilux created an application to collect sensor data on light, temperature, soil, weather and more. Now users can optimize plants’ photosynthesis, energy consumption, and greenhouse maintenance. Most ambitiously, it provides comprehensive “crop yield management:” 

  • Digital cultivation schedule
  • Light strategies based on plant physiology and life cycle
  • Automatic light adjustment based on predictive analytics (e.g. weather forecast, energy prices, produce prices)

The app even allows predictive maintenance, predicting bulbs’ life expectancy and notifying maintenance to replace them in time to avoid disruptions in operations.

In the days when we suffered from what I call “Collective Blindness,” when we lacked the tools to “see” inside products to m0nitor and perhaps fix them based on real-time operating data, it made sense to sell products and provide hit-or-miss maintenance when they broke down.

Now that we can monitor them 24/7 and get early enough warning to instead provide predictive maintenance, it makes equal sense to switching to marketing them as services, with mutual benefits including:

  • increased customer satisfaction because of less down-time
  • new revenues from selling customers services based on availability of the real-time data, which in turn allows them more operating precision
  • increased customer loyalty, because the customer is less likely to actually go on the open market and buy a competing product
  • the opportunity to improve operations through software upgrades to the product.

Servitization: ugly word, but smart strategy. Hope you’ll join us on the 2nd!

Surprising Benefits of Combining IoT and Blockchain (they go beyond economic ones!)

One final effort to work this blockchain obsession out of my system so I can get on to some exciting other IoT news!

I couldn’t resist summarizing for you the key points in”Blockchain: the solution for transparency in product supply chains,” a white paper from Project Provenance Ltd., a London-based collective  (“Our common goal is to deliver meaningful change to commerce through open and accessible information about products and supply chains.”).

If you’ve followed any of the controversies over products such as “blood diamonds” or fish caught by Asian slaves & sold by US supermarkets, you know supply chains are not only an economic issue but also sometimes a vital social (and sometimes environmental) one. As the white paper warns:

“The choices we make in the marketplace determine which business practices thrive. From a diamond in a mine to a tree in a forest, it is the deepest darkest ends of supply chains that damage so much of the planet and its livelihood.”


Now blockchain can make doing the right thing easier and more profitable:

“Provenance enables every physical product to come with a digital ‘passport’ that proves authenticity (Is this product what it claims to be?) and origin (Where does this product come from?), creating an auditable record of the journey behind all physical products. The potential benefits for businesses, as well as for society and the environment, are hard to overstate: preventing the selling of fake goods, as well as the problem of ‘double spending’ of certifications present in current systems. The Decentralized Application (Dapp) proposed in this paper is still in development and we welcome businesses and standards organizations to join our consortium and collaborate on this new approach to understanding our material world.”

I also love Provenance’s work with blockchain because it demonstrates one of my IoT “Essential Truths,” namely, that we must share data rather than hoard it.  The exact same real-time data that can help streamline the supply chain to get fish to our stores quicker and with less waste can also mean that the people catching it are treated fairly. How cool is that?  Or, as Benjamin Herzberg, Program Lead, Private Sector Engagement for Good Governance at the World Bank Institute puts it in the quote that begins the paper, Now, in the hyper-connected and ever-evolving world, transparency is the new power.

While I won’t summarize the entire paper, I do recommend that you so, especially if blockchain is still new to you, because it gives a very detailed explanation of each blockchain component.

Instead, let’s jump in with the economic benefits of a blockchain and IoT-enabled supply chain, since most companies won’t consider it, no matter what the social benefits, if it doesn’t help the bottom line. The list is long, and impressive:

  • “Interoperable: A modular, interoperable platform that eliminates the possibility of double spending
  • Auditable: An auditable record that can be inspected and used by companies, standards organizations, regulators, and customers alike
  • Cost-efficient:  A solution to drastically reduce costs by eliminating the need for ‘handling companies’ to be audited
  • Real-time and agile:  A fast and highly accessible sign-up means quick deployment
  • Public: The openness of the platform enables innovation and could achieve bottom-up transparency in supply chains instead of burdensome top-down audits
  • Guaranteed continuity:  The elimination of any central operator ensures inclusiveness and longevity” (my emphasis)

Applying it to a specific need, such as documenting that a food that claims to be organic really is, blockchain is much more efficient and economical than cumbersome current systems, which usually rely on some third party monitoring and observing the process.  As I’ve mentioned before, the exquisite paradox of blockchain-based systems is that they are secure and trustworthy specifically because no one individual or program controls them: it’s done through a distributed system where all the players may, in fact, distrust each other:

“The blockchain removes the need for a trusted central organization that operates and maintains this system. Using blockchains as a shared and secure platform, we are able to see not only the final state (which mimics the real world in assigning the materials for a given product under the ownership of the final customer), but crucially, we are able to overcome the weaknesses of current systems by allowing one to securely audit all transactions that brought this state of being into effect; i.e., to inspect the uninterrupted chain of custody from the raw materials to the end sale.

“The blockchain also gives us an unprecedented level of certainty over the fidelity of the information. We can be sure that all transfers of ownership were explicitly authorized by their relevant controllers without having to trust the behavior or competence of an incumbent processor. Interested parties may also audit the production and manufacturing avatars and verify that their “on-chain” persona accurately reflects reality.”

The white paper concludes by also citing an additional benefit that I’ve mentioned before: facilitating the switch to an environmentally-sound “circular economy,” which requires not only tracking the creation of things, but also their usage, trying to keep them out of landfills. “The system proposed in this paper would not only allow the creation (including all materials, grades, processes etc) and lifecycle (use, maintenance etc) to be logged on the blockchain, but this would also make it easy to access this information when products are returned to be assessed and remanufactured into a new item.”

Please do read the whole report, and think how the economic benefits of applying blockchain-enabled IoT practices to your supply chain can also warm your heart.


More Blockchain Synergies With IoT: Supply Chain Optimization

The more I learn about blockchain’s possible uses — this time for supply chains — the more convinced I am that it is absolutely essential to full development of the IoT’s potential.

I recently raved about blockchain’s potential to perhaps solve the IoT’s growing security and privacy challenges. Since then, I’ve discovered that it can also further streamline and optimize the supply chain, another step toward the precision that I think is such a hallmark of the IoT.

As I’ve written before, the ability to instantly share (something we could never do before) real-time data about your assembly line’s status, inventories, etc. with your supply chain can lead to unprecdented integration of the supply chain and factory, much of it on a M2M basis without any human intervention. It seems to me that the blockchain can be the perfect mechanism to bring about this synchronization.

A brief reminder that, paradoxically, it’s because blockchain entries (blocks) are shared, and distributed (vs. centralized) that it’s secure without using a trusted intermediary such as a bank, because no one participant can change an entry after it’s posted.

Complementing the IBM video I included in my last post on the subject, here’s one that I think succinctly summarizes blockchain’s benefits:

A recent LoadDelivered article detailed a number of the benefits from building your supply chain around blockchain. They paralleling the ones I mentioned in my prior post regarding its security benefits, of using blockchain to organize your supply chain (with some great links for more details):

  • “Recording the quantity and transfer of assets – like pallets, trailers, containers, etc. – as they move between supply chain nodes (Talking Logistics)
  • Tracking purchase orders, change orders, receipts, shipment notifications, or other trade-related documents
  • Assigning or verifying certifications or certain properties of physical products; for example determining if a food product is organic or fair trade (Provenance)
  • Linking physical goods to serial numbers, bar codes, digital tags like RFID, etc.
  • Sharing information about manufacturing process, assembly, delivery, and maintenance of products with suppliers and vendors.”

That kind of information, derived from real-time IoT sensor data, should be irresistible to companies compared to the relative inefficiency of today’s supply chain.

The article goes on to list a variety of benefits:

  • “Enhanced Transparency. Documenting a product’s journey across the supply chain reveals its true origin and touchpoints, which increases trust and helps eliminate the bias found in today’s opaque supply chains. Manufacturers can also reduce recalls by sharing logs with OEMs and regulators (Talking Logistics).
  • Greater Scalability. Virtually any number of participants, accessing from any number of touchpoints, is possible (Forbes).
  • Better Security. A shared, indelible ledger with codified rules could potentially eliminate the audits required by internal systems and processes (Spend Matters).
  • Increased Innovation. Opportunities abound to create new, specialized uses for the technology as a result of the decentralized architecture.”

Note that it the advantages aren’t all hard numbers, but also allowing marketing innovations, similar to the way the IoT allows companies to begin marketing their products as services because of real-time data from the products in the field. In the case of applying it to the supply chain (food products, for example), manufacturers could get a marketing advantage because they could offer objective, tamper-proof documentation of the product’s organic or non-GMO origins. Who would have thought that technology whose primary goal is increasing operating efficiency could have these other, creative benefits as well?

Applying  blockchain to the supply chain is getting serious attention, including a pilot program in the Port of Rotterdam, Europe’s largest.  IBM, Intel, Cisco and Accenture are among the blue-chip members of Hyperledger, a new open source Linux Foundation collaboration to further develop blockchain. Again, it’s the open source, decentralized aspect of blockchain that makes it so effective.

Logistics expert Adrian Gonzalez is perhaps the most bullish on blockchain’s potential to revolutionize supply chains:

“the peer-to-peer, decentralized architecture of blockchain has the potential to trigger a new wave of innovation in how supply chain applications are developed, deployed, and used….(becoming) the new operating system for Supply Chain Operating Networks

It’s also another reminder of the paradoxical wisdom of one of my IoT “Essential Truths,” that we must learn to ask “who else could share this information” rather than hoarding it as in the past. It is the very fact that blockchain data is shared that means it can’t be tampered with by a single actor.

What particularly intrigues me about widespread use of blockchain at the heart of companies’ operations and fueled by real-time data from IoT sensors and other devices is that it would ensure that privacy and security, which I otherwise fear would always be an afterthought, would instead be inextricably linked with achieving efficiency gains. That would make companies eager to embrace the blockchain, assuring their attention to privacy and security as part of the deal. That would be a definite win-win.

Blockchain must definitely be on your radar in 2017.


Lo and behold, right after I posted this, news that WalMart, the logistics savants, are testing blockchain for supply chain management!


Blockchain might be answer to IoT security woes

Could blockchain be the answer to IoT security woes?

I hope so, because I’d like to get away from my recent fixation on IoT security breaches and their consequences,  especially the Mirai botnet attack that brought a large of the Internet to its knees this Fall and the even scarier (because it involved Philips, a company that takes security seriously) white-hat hackers attack on Hue bulbs.  As I’ve written, unless IoT security is improved, the public and corporations will lose faith in it and the IoT will never develop to its full potential.

Now, there’s growing discussion that blockchain (which makes bitcoin possible), might offer a good IoT security platform.

Ironically — for something dealing with security — blockchain’s value in IoT may be because the data is shared and no one person owns it or can alter it unilaterally (BTW, this is one more example of my IoT “Essential Truth” that with the IoT data should be shared, rather than hoarded as in the past.

If you’re not familiar with blockchain, here’s an IBM video, using an example from the highly security-conscious diamond industry, that gives a nice summary of how it works and why:

The key aspects of blockchain is that it:

  • is transparent
  • can trace all aspects of actions or transactions (critical for complex sequences of actions in an IoT process)
  • is distributed: there’s a shared form of record keeping, that everyone in the process can access.
  • requires permission — everyone has permission for every step
  • is secure: no one person — even a system administrator — can alter it without group approval.

Of these, perhaps the most important aspect for IoT security is that no one person can change the blockchain unilaterally, adding something (think malware) without the action being permanently recorded and without every participant’s permission.  To add a new transaction to the blockchain, all the members must validate it by applying an algorithm to confirm its validity.

The blockchain can also increase efficiency by reducing the need for intermediaries, and it’s a much better way to handle the massive flood of data that will be generated by the IoT.

The Chain of Things think tank and consortium is taking the lead on exploring blockchain’s application to the IoT. The group describes itself as “technologists at the nexus of IoT hardware manufacturing and alternative blockchain applications.” They’ve run several blockchain hackathons, and are working on open standards for IoT blockchains.

Contrast blockchain with the current prevailing IoT security paradigm.  As Datafloq points out, it’s based on the old client-server approach, which really doesn’t work with the IoT’s complexity and variety of connections: “Connection between devices will have to exclusively go through the internet, even if they happen to be a few feet apart.”  It doesn’t make sense to try to funnel the massive amounts of data that will result from widespread deployment of billions of IoT devices and sensor through a centralized model when a decentralized, peer-to-peer alternative would be more economical and efficient.

Datafloq concludes:

“Blockchain technology is the missing link to settle scalability, privacy, and reliability concerns in the Internet of Things. Blockchain technologies could perhaps be the silver bullet needed by the IoT industry. Blockchain technology can be used in tracking billions of connected devices, enable the processing of transactions and coordination between devices; allow for significant savings to IoT industry manufacturers. This decentralized approach would eliminate single points of failure, creating a more resilient ecosystem for devices to run on. The cryptographic algorithms used by blockchains, would make consumer data more private.”

I love it: paradoxically, sharing data makes it more secure!  Until something better comes along and/or the nature of IoT strategy challenges changes, it seems to me this should be the basis for secure IoT data transmission!




2nd day liveblogging, Gartner ITxpo, Barcelona

Accelerating Digital Business Transformation With IoT Saptarshi Routh Angelo Marotta
(arrived late, mea culpa)

  • case study (didn’t mention name, but just moved headquarters to Boston. Hmmmmm).
  • you will be disrupted by IoT.
  • market fragmented now.

Toshiba: How is IoT Redefining Relationships Between Customers and Suppliers, Damien Jaume, president, Toshiba Client Solutions, Europe:

  • time of tremendous transformation
  • by end of ’17, will surpass PC, tabled & phone market combined
  • 30 billion connect  devices by 2020
  • health care IoT will be $117 billion by 2020
  • 38% of indiustry leaders disrupted by digitally-enabled competitors by 2018
  • certainty of customer-supplier relationship disruption will be greatest in manufacturing, but also every other market
    • farming: from product procurement to systems within systems. Smart, connected product will yield to integrated systems of systems.
  • not selling product, but how to feed into whole IoT ecosystem
  • security paramount on every level
  • risk to suppliers from new entrants w/ lean start-up costs.
  • transition from low engagement, low trust to high engagement, high trust.
  • Improving efficiencies
  • 4 critical success factors:
    • real-time performance pre-requisite
    • robustness — no downtime
    • scalability
    • security
  • case studies: energy & connected home, insurance & health & social care (Neil Bramley, business unit director for clients solutions
    • increase depth of engagement with customer. Tailored information
    • real-time performance is key, esp. in energy & health
    • 20 million smart homes underway in GB by 2020:
      • digitally empowering consumers
      • engaging consumers
      • Transforming relationships among all players
      • Transforming homes
      • Digital readiness
    • car insurance: real-time telematics.
      • real-time telematics data
      • fleet management: training to reduce accidents. Working  w/ Sompo Japan car insurance:
    • Birmingham NHS Trust for health (Ciaron Hoye, head of digital) :
      • move to health promotion paradigm
      • pro-actively treat patients
      • security first
      • asynchronous communications to “nudge” behavior.
      • avoiding hip fractures
      • changing relationship w/ the patient: making them stakeholders, involving in discussion, strategy
      • use game theory to change relationship

One-on-one w/ Christian Steenstrup, Gartner IoT analyst. ABSOLUTE VISIONARY — I’LL BE INTERVIEWING HIM AT LENGTH IN FUTURE:

  • industrial emphasis
  • applications more ROI driven, tangible benefits
  • case study: mining & heavy industry
    • mining in Australia, automating entire value train. Driverless. Driverless trains. Sensors. Caterpillar. Collateral benefits: 10% increase in productivity. Less payroll.  Lower maintenance. Less damage means less repairs.
    • he downplays AR in industrial setting: walking in industrial setting with lithium battery strapped to your head is dangerous.
    • big benefit: less capital expense when they build next mine. For example, building the town for the operators — so eliminate the town!
  • take existing processes & small improvements, but IoT-centric biz, eliminating people, might eliminate people. Such as a human-less warehouse. No more pumping huge amount of air underground. Huge reduction with new system.  Mine of future: smaller holes. Possibility  of under-sea mining.
  • mining has only had incremental change.
  • BHP mining’s railroad — Western Australia. No one else is involved. “Massive experiment.”
  • Sound sensing can be important in industrial maintenance.  All sorts of real-time info. 
  • Digital twins: must give complete info — 1 thing missing & it doesn’t work.
  • Future: 3rd party data brokers for equipment data.
  • Privacy rights of equipment.
  • “communism model” of info sharing — twist on Lenin.


Accelerating Digital Transformation with Microsoft Azure IoT Suite (Charlie Lagervik):

  • value networking approach
  • customer at center of everything: customer conversation
  • 4 imperatives:
    • engage customers
    • transform products
    • empower employees
    • optmize operations
  • their def. of IoT combines things/connectivity/data/analytics/action  Need feedback loop for change
  • they focus on B2B because of efficiency gains.
  • Problems: difficult to maintain security, time-consuming to launch, incompatible with current infrastructure, and hard to scale.
  • Azure built on cloud.


Afternoon panel on “IoT of Moving Things” starts with all sorts of incredible factoids (“since Aug., Singapore residents have had access to self=driving taxis”/ “By 2030, owning a car will be an expensive self-indulgence and will no longer be legal.”

  • vehicles now have broader range of connectivity now
  • do we really want others to know where we are? — privacy again!
  • who owns the data?
  • what challenges do we need to overcome to turn data into information & valuable insight that will help network and city operators maximize efficiency & drive improvement across our transportation network?
  • think of evolution: now car will be software driven, then will become living room or office.
  • data is still just data, needs context & location gives context.
  • cities have to re-engineer streets to become intelligent streets.
  • must create trust among those who aren’t IT saavy.
  • do we need to invest in physical infrastructure, or will it all be digital?
  • case study: one car company w/ engine failures in 1 of 3 cars gave the consultants data to decide on what was the problem.">Stephenson blogs on Internet of Things Internet of Things strategy, breakthroughs and management