Resolved: That 2015 Is When Privacy & Security Become #IoT Priority!

I’m a right-brained, intuitive type (ENFP, if you’re keeping Myers-Briggs score…), and sometimes that pays off on issues involving technology & the general public, especially when the decidedly non-technical, primal issue of FEAR comes into the equation.

I used to do a lot of crisis management work with Fortune 100 companies, and usually worked with engineers, 95% of whom are my direct opposite: ISTJ.  Because they are so left-brained, rational and analytical, it used to drive them crazy that the public would be so fearful of various situations, because peoples’ reaction was just so darned irrational!

I’m convinced that same split is a looming, and extremely dangerous problem for the Internet of Things: the brilliant engineers who bring us all these great platforms, devices and apps just can’t believe that people could be fraidy cats.

Let me be blunt about it, IOT colleagues: get used dealing with peoples’ fears. Wise up, because that fear might just screw the IoT before it really gains traction. Just because a reaction is irrational doesn’t mean it isn’t very, very real to those who feel it, and they might just shun your technology and/or demand draconian regulations to enforce privacy and security standards. 

That’s why I was so upset at a remark by some bright young things at the recent Wearables + Things conference. When asked about privacy and security precautions (a VERY big thing with people, since it’s their very personal bodily data that’s at risk) for their gee-whiz device, they blithely said that they were just a start-up, and they’d get to security issues after they had the device technology squared away.

WRONG, KIDS: security and privacy protections have to be a key priority from the get-go.

That’s why I was pleased to see that CES asked FTC Chair Edith Ramirez to give opening remarks at a panel on security last week, and she specifically focused on “privacy by design,” where privacy protections are baked into the product from the get-go. She emphasized that start-ups can’t get off the hook:

“‘Any device that is connected to the Internet is at risk of being hijacked,’ said Ms. Ramirez, who added that the large number of Internet-connected devices would ‘increase the number of access points’ for hackers.

Ms. Ramirez seemed to be directing her remarks at the start-ups that are making most of the products — like fitness trackers and glucose monitors — driving the so-called Internet of Things.

She said that some of these developers, in contrast to traditional hardware and software makers, ‘have not spent decades thinking about how to secure their products and services from hackers.'”

I yield to no one in my love of serendipitous discoveries of data’s value (such as the breakthrough in early diagnosis of infections in neonates by researchers from IBM and Toronto’s Hospital for Sick Children, but I think Ms. Ramirez was on target about IoT developers forcing themselves to emphasize minimization of data collection, especially when it comes to personal data:

“Beyond security, Ms. Ramirez said that technology companies needed to pay more attention to so-called data minimization, in which they collect only the personal data they need for a specific purpose and delete it permanently afterward. She directly challenged the widespread contention in the technology industry that it is necessary to collect large volumes of data because new uses might be uncovered.

‘I question the notion that we must put sensitive consumer data at risk on the off chance a company might someday discover a valuable use for the information,’ she said.

She also said that technology companies should be more transparent about the way they use personal data and should simplify their terms of use.”

Watch for a major IoT privacy pronouncement soon from the FTC.

It’s gratifying that, in addition to the panel Ms. Ramirez introduced, that CES also had an (albeit small…) area for privacy vendors.  As the WaPo reported, part of the reasons for this area is that the devices and apps are aimed at you and me, because “consumers are finding — thanks to the rise in identity theft, hacks and massive data breaches — that companies aren’t always good stewards for their information.” Dealing with privacy breaches is everyone’s business: companies, government, and you and me!

As WaPo reporter   concluded: “The whole point of the privacy area, and of many of the products being shown there, is that technology and privacy don’t have to fight. They can actually help each other. And these exhibitors — the few, the proud, the private — are happy to be here, preaching that message.”

So, let’s all resolve that 2015 when privacy and security become as big an IoT priority as innovation!


Oh, before I forget, its time for my gratuitous reference whenever I discuss IoT privacy and security, to Gen. David Petraeus (yes, the very General “Do As I Say, Not As I Do” Petraeus who faces possible federal felony charges for leaking classified documents to his lover/biographer.), who was quite enamored of the IoT when he directed the CIA. That should give you pause, no matter whether you’re an IoT user, producer, or regulator!

Disney MagicBands: as important symbolically for IoT as substantively!

(I’ve been meaning to write about this particular IoT device for a long time — my apologies for the delay)

I have no objective evidence for this, but I suspect that many C-level executives first learned about e-commerce when they placed personal orders during the Christmas season of 1995. Thus, Amazon deserves a disproportionate share of credit for launching the e-commerce era.

Magic Bands play a number of roles at Disney parks

Similarly, I suspect that many C-level executives’ first direct experience with the Internet of Things has come, or may come this holiday season, with their family’s first visit to Disneyworld since Disney began the beta testing of its MagicBands, which are arguably the most high-profile public IoT devices so far.

IMHO, Disney deserves a lot of credit for such a public IoT project, especially many of the initial reviews were decidedly mixed due to technical and management glitches — risking irritating customers. 

The project reportedly cost north of $1 billion.

The major lesson to decision makers in other industries to be gained from the MagicBand is my favorite IoT “Essential Truth“: who else can use this data?

Disney uses the band data, either by itself, or aggregated with other visitors, to improve almost every aspect of park operations, marketing, and the customer experience — illustrating the versatility of IoT devices:

  • control logistics, speeding entry to the park and individual rides
  • coordinate outside transportation
  • balance demand for various rides
  • add new functionality to existing technology such as the Disney app
  • control mechanical systems, such as hotel door locks
  • add a social component (and avoid the stresses of families getting
  • handle and speed in-park financial transactions
  • personalize the park experience and improve customer satisfaction
  • harvest and analyze big data on customer preferences.

The bands, which work because they have RFID chips inside, are worn on your wrist throughout your stay at the parks. When you book the trip, Disney lets you choose your favorite color, and the band comes in a presentation box with your name on it.

Before leaving, you can program it in conjunction with the My Disney Experience app and web page, entering key choices such as hotels, your favorite rides (FastPass+), dinner reservations, etc., and your credit card info so that they can be used to pay for meals and merchandise.

Disney warns visitors not to pack the bracelets in their luggage, because they are even used to board the transportation from the Orlando airport.

Putting aside the programming involved, this had to be a tremendous logistical challenge, changing the hotel locks, installing readers at each ride, putting readers in the restaurants and shops, which probably accounts for many of the glitches that customers reported during the pilot phase.

My future son-in-law, Greg Jueneman, who knows EVERYTHING about Disneyland, weighs in from a customer standpoint:

“I think they take the spontaneity out of a Disney World vacation. Everything has to be planned in advance and a schedule has to be followed. As a technology they are cool, I’m sure Disney had lots of plans for them but so far the only real thing that they do is open your hotel room without a “key” and allow you to pay for things without your cards (I’m sure Disney loves that! – some blogs Ifollow have said that spending with Magic Bands is up 40%, that’s impressive!).”

As you can imagine, there are also important data privacy and security issues: on one hand, it would probably be very cool to have Mickey come up to you and say “happy 5th birthday, Jeremy,” but that could also creep parents out, and you’d be worried about someone running up a tab on your credit card if you mislaid the band.

From my reading of the most recent media coverage, it appears that most of the beta test problems have been worked out, and that Disney is fully-committed to universal use of the bands in the future.

If you’re visiting Disney this holiday season, think about possible IoT strategy lessons for your company from the MagicBand:

  • marketing: how it can personalize the customer experience and increase sales?
  • transactions: how can it streamline transactions (have to think that Apple looked carefully at this in designing Apple Pay)?
  • operations: how can real-time data from many users help streamline operations and reduce congestion?

Maybe you can write off the family vacation as research! Have fun.

 

Perhaps Most Important Internet of Things Essential Truth: Everything’s Linked

PROCEED WITH CAUTION!

You see, I’m thinking out loud (that accounts for that sound of gears grinding….) — I really am writing this post as I mull over the subject for the first time, so you’re forewarned that the result may be a disaster — or insightful. Bear with me…

I’m working on a book outline expanding on “Managing the Internet of Things Revolution,” the introduction to IoT strategy for C-level executives that I wrote for SAP. One of the things I’ve been looking for is a theme that would bring together all of the book’s parts, which include product design, manufacturing, marketing and corporate organization, among other topics.

I think I’ve got that theme, and I think it may be the most Essential Truth of all the ones I’ve written about regarding the IoT:

Everything’s Linked!

When you think about it, there have been a lot of dead-ends in business in the past:

  • we haven’t been able to know how customers used our products. We’ve actually got a lot more information about the ones that failed, because of warrantee claims or complaints, than we have about the ones that worked well, because that information was impossible to gather.
  • data that could help workers do their work better has always come from top down, filtered by various levels of management and only delivered after the fact.
  • customers can’t get the full value of our products because they operate in isolation from each other, and often were slow to react to changing conditions.
  • assembly-line machinery has frequently been hard to optimize, because we really didn’t know how it was operating — until it broke down.
  • key parts of the operation, such as supply chain, manufacturing, and distribution, have been largely independent, without simultaneous access to each other’s status.

With the Internet of Things, by contrast, everything will be linked, and that will change everything:

  • we’ll get real-time data about how customers are using our products. Most radically, that data may even allow us, instead of selling products and then severing our ties to the customer as in the past, to instead lease them the products, with the pricing dependent on how they actually use the products and the value they obtain from them.
  • everyone in the company can (if your management practices allow!) have real-time access to data that will help them improve their decision making and daily operations (hmm: still looking for an example of this one: know any companies that are sharing data on a real-time basis??).
  • products will work together, with synergistic results (as with the Jawbone UP turning on the NEXT), with their operation automatically triggered and coordinated by services such as IFTTT.
  • the assembly line can be optimized because we’ll be able to “see” into massive equipment to learn how it is operating — or if it needs repairs in time to avoid catastrophic failure.
  • access to that same data may even be shared with your supply chain and distribution network — or even with customers (again, looking for a good example of that transformation).

There’s won’t be dead ends or one-way streets where information only flows one way. Instead, they’ll be replaced by loops (in fact, I thought loops might be an alternative theme): in many cases, data will be fed back through M2M systems so things can be optimized.

If that’s the case, we’ll be able to increase the use and value of tools such as systems dynamics software, that would help us model and act on these links and loops. Instead of massive oscillations where we’re forced to make sudden, major corrections when data finally becomes available, machinery will be largely self-regulating, based on continuous feedback. We’ll delight customers because products will be more dependable and we’ll be able to fine-tune them by adding features based on actual knowledge of how the products work.  Workers will be more efficient, and happier, because they’ll be empowered. We’ll tread lightly on the earth, because we’ll use only what we need, precisely when we need it.

By George, I think I’ve got it! I’m excited about this vision of the Internet of Things linking everything. What do you think?? Please let me know! 

IoT ideal example of “recombinant innovation”!

I’m currently reading Erik Brynjolfsson (say that one fast three times…) and Andy McAfee’s brilliant The Second Machine Age, which I highly recommend as an overview of the opportunities and pitfalls of what they call “brilliant technologies.”

While they don’t specifically mention the IoT, I was riveted by one section in which they contrasted current digital innovation with past technologies, using economist Paul Romer‘s term “recombinant innovation”:

Economic growth occurs whenever people take resources and rearrange them in ways that make them more valuable…. Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new … ideas were discovered. And every generation has underestimated the potential for finding new … ideas. We consistently fail to grasp how many ideas remain to be discovered… Possibilitities do not merely add up, they multiply.” (my emphasis)

I felt like Dr. Pangloss, who was surprised to learn he’d been speaking prose all his life: I realized Romer’s term and definition was a more elegant version of what I’ve written before, especially about IFTTT, about an Essential Truth of the IoT — that sharing data is critical to achieving the IoT’s full potential. IFTTT is a great example of Romer’s argument in practice: individuals are “taking resource and rearrang(ing) them in ways that make them more valuable.” As Brynjolfsson and McAfee write:

“.. digital innovation is recombinant innovation in its purest form. Each development becomes a building block for future innovations. Progress doesn’t run out; it accumulates. And the digital world doesn’t respect any boundaries. It extends into the physical one, leading to cars and planes that drive themselves, printers that make parts, and so on….We’ll call this the ‘innovation-as-building-block’ view of the world..” (again, my emphasis)

This is such a powerful concept. Think of Legos — not those silly ones that dominate today, where they are so specialized they can only be used in making a specific kit — but the good ol’ basic ones that could be reused in countless ways. It’s why I happen to believe that all the well-thought-out projections on the IoT’s potential size probably are on the low side: there’s simply no way that we can predict now all the creative, life-saving, money-saving, or quality-of-life-enhancing ways the IoT will manifest itself until people within and outside of organizations take new IoT devices and use them in IFTTT-like “Recipes” that would never have occurred to the devices’ creators.  But beware: none of this will happen if companies use proprietary standards or don’t open their APIs and other tools to all those who can benefit.

How exciting!

Apple Watch: killer app for IoT and lynchpin for “smart aging”

Wow: glad I put up with all of the tech problems during the Apple product launch today: the Apple Watch was worth it! It really seems as if it will be the killer device/app for the Internet of Things consumer market, and I think it may also be the lynchpin for my vision of “smart aging,” which would link both wearable health devices and smart home devices.

The elegant, versatile displays (it remains to be seen how easy it will be for klutzes like me to use the Digital Crown and some of the other navigation tools) plus the previously announced Health and Home Apps that are part of iOS 8 could really be the glue that brings together Quantified Self and smart home devices, making “smart aging” possible.

Activity AppIt will take some time to learn all about the watch and to see what apps the “Watch Kit” spawns, but here are some immediate reactions:

  • sorry, but I think it could kill the Lechal haptic shoes before they get off the ground: why have to pay extra for shoes that will vibrate to tell you where to go when your watch can do the same thing with its “Taptic Engine”?
  • I think I’ll also ditch my Jawbone UP, as much as I love it, for the Apple Watch: the video on how the Activity and Workout apps will work makes it look incredibly simple to view your fitness data instantly, vs. having to open an app on your phone.
  • (Just dreaming here): if they can pull off that neat “Milanese Loop” band on one of the versions that clamps to itself, what about not just a heart beat monitor, but a band that converts into a blood-pressure cuff? Guess that wouldn’t be accurate on the wrist, anyway, huh?

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.

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!