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 Hortisensehttp://www.hortidaily.com/article/31774/Hortilux-launches-Hortisense-software-suite, 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!

Sound’s emerging IoT role

Could sound be a critical IoT tool?

I’d fixated in the past on a metaphor I called “Collective Blindness,” as a way to explain how difficult it used to be to get accurate, real-time data about how a whole range of things, from tractors to your body, were actually working (or not) because we had no way to penetrate the surface of these objects as they were used. As a result, we created some not-so-great work-arounds to cope with this lack of information.

Then along came the IoT, and no more collective blindness!

Now I’m belatedly learning about some exciting efforts to use another sense, sound, for the IoT.  Most prominent, of course, is Amazon’s Alexa and her buddies (BTW, when I ask Siri if she knows Alexa, her response was an elusive “this is about you, not me,” LOL), but I’ve found a variety of start-ups pursuing quite different aspects of sound. They nicely illustrate the variety of ways sound might be used.

technician using Auguscope to detect   sound irregularities in machinery

First is Augury.

What I particularly love about their device and accompanying smartphone app it is that they are just about the lowest-cost, easiest-to-use, rapid payback industrial IoT devices I can think of.

That makes them a great choice to begin an incremental approach to the IoT, testing the waters by some measures that can be implemented quickly, pay rapid bottom-line benefits and therefore may lure skeptical senior management who might then be willing to then try bolder measures   (this incremental approach was what I outlined in my Managing the Internet of Things Revolution e-guide for SAP, and I’ll be doing a webinar on the approach in April with Mendix, which makes a nifty no-code, low-code tool).

Instead of requiring built-in sensors, an Auguscope is a hand-held device that plant personnel can carry anywhere in the building it’s needed to analyze how the HVAC system is working. A magnetic sensor temporarily attaches to the machine and the data flows from the Auguscope to the cloud where it is analyzed to see if the sound is deviating from pre-recorded normal sounds, indicating maintenance is needed. Consistent with other IoT products that are marketed as services instead of sold, it uses a “Diagnostics as a Service” model, so there are no up-front costs and customers pay as they go. The company hopes that the technology will eventually be built into household appliances such as washers and dryers.

Presenso is the second company using sound to enable predictive maintenance.  It is sophisticated cloud-based software that takes data from a wide range of already-installed sensors and interprets any kind of data: sound, temperature, voltage, etc.  It builds a model of the machine’s normal operating data and then creates visualizations when the data varies from the norm. Presenso’s power comes from combining artificial intelligence and big data.

Finally, and most creative is Chirp (hmm: Chrome wouldn’t let me enter their site, which it said was insecure. Here’s the URL:www.chirp.io/ — try at your own risk…) , a UK company that transmits data using audio clips that really sound like chirps. It’s amazing!  Check out this video of an app in India that uses sound to pay fares on the country’s version of Uber:


Another Chirp app is a godsend to all who forget Wi-Fi passwords: your phone “chirps” a secure access code, allowing you to join the network automatically.   The company has released iOS and Android versions.  As VentureBeat reported:

“Each chirp lasts a couple of seconds, and the receiving device “listens” for a handful of notes played quickly in a certain order, in a certain range, and at a certain speed. While there are other easy ways of sharing files and data in real-time, such as Bluetooth, Chirp doesn’t require devices to pair in advance, there is no need to set up an account, and it’s ultimately a much quicker way of sharing files.

“That said, with Chirp, the file itself isn’t sent peer-to-peer, and the data doesn’t actually travel directly via audio. Chirp merely decodes and encodes the file, with the associated sound serving as the delivery mechanism. A link is generated for the recipient(s) to access it on Chirp’s servers, but the process from sending to receiving is seamless and near-instant.”

In terms of IoT applications, it could also connect with physical objects (hmm: retailing uses??). The Chirp platform is so cool that I suspect it will be a global hit (the company says it’s already used in 90 countries).

So, I’ve had my senses opened: from now on, I’ll add voice and sound in general to the list of cool IoT attributes.  Because voice and sound are so ubiquitous, they really meet the late Mark Weiser’s test:  “the most profound technologies are those that disappear. They weave themselves into the fabric of everyday life until they are indistinguishable from it.” What could be more woven into the fabric of everyday life than sound — and, potentially, more valuable?


BTW: let me put in a plug for another IoT voice product. During the past two months, I recorded 7 hours of my voice speaking a very strange mishmash of sentences drawn from, among others, Little Women, Jack London’s Call of the Wild, The Wizard of Oz, and The Velveteen Rabbit (I worried about the she-wolf sneaking up on Meg, LOL….). Using the algorithms developed for Alexa, the Vocal ID team will slice and dice my voice and create a natural sounding one for someone who cannot speak due to a birth defect or disease.  I hope you’ll join me in volunteering for this wonderful program.

IoT Intangibles: Increased Customer Loyalty

There are so many direct, quantifiable benefits of the IoT, such as increased quality (that 99.9988% quality rate at Siemens’s Amberg plant!) and precision, that we may forget there are also potential intangible benefits.

Most important of those is customer loyalty, brought about by dramatic shifts both in product designs and how they are marketed.

Much of this results from the IoT lifting the veil of Collective Blindness to which I’ve referred before: in particular, our prior inability to document how products were actually used once they left the loading dock. As I’ve speculated, that probably meant that manufacturers got deceptive information about how customers actually used products and their degree of satisfaction. The difficulty of getting feedback logically meant that those who most liked and most hated a product were over-represented: those who kinda liked it weren’t sufficiently motivated to take the extra steps to be heard.

Now, by contrast, product designers, marketers, and maintenance staffs can share (that critical verb from my Circular Company vision!) real-time data about how a product is actually operating in the field, often from a “digital twin” they can access right at their desks.

Why’s that important?

It can give them easy insights (especially if those different departments do access and discuss the data at the same time, each offering its own unique perspectives, on issues that will build customer loyalty:

  • what new features can we add that will keep them happy?
  • can we offer upgrades such as new operating software (such as the Tesla software that was automatically installed in every single car and avoided a recall) that will provide better customer experiences and keep the product fresh?
  • what possible maintenance problems can we spot in their earliest stages, so we can put “predictive maintenance” services into play at minimal cost and bother to the customer?

I got interested in this issue of product design and customer loyalty while consulting for IBM in the 9o’s, when it introduced the IBM PS 2E (for Energy & Environmental), a CES best-of-show winner in part because of its snap-together modular design. While today’s thin-profile-at-all-costs PC and laptop designs have made user-friendly upgrades a distant memory, one of the things that appealed to me about this design was the realization that if you could keep users satisfied that they were on top of  new developments by incremental substitution of new modules, they’d be more loyal and less likely to explore other providers.

In the same vein, as GE has found, the rapid feedback can dramatically speed upgrades and new features. That’s important for loyalty: if you maintain a continuing interaction with the customer and anticipate their demands for new features, they’ll have less reason to go on the open market and evaluate all of your competitors’ products when they do want to move up.

 

Equally important for customer loyalty is the new marketing options that the continuous flow of real-time operating data offer you. For a growing number of companies, that means they’re no longer selling products, but leasing them, with the price based on actual customer usage: if it ain’t bein’ used, it ain’t costing them anything and it ain’t bringing you any revenue!

Examples include:

  • jet turbines which, because of the real-time data flow, can be marketed on the basis of thrust generated: if it’s sitting on the ground, the leasee doesn’t pay.  The same real-time data flow allows the manufacturer to schedule predictive maintenance at the earliest sign of a problem, reducing both its cost and the impact on the customer.
  • Siemens’s Mobility Services, which add in features such as 3-D manufactured spare parts that speed maintenance and reduced costs, keeping the trains running.
  • Philips’s lighting services, which are billed on the basis of use, not sold.
  • SAP’s prototype smart vending machine, which (if you opt in) may offer you a special discount based on your past purchasing habits.

At its most extreme is Caterpillar’s Reman process, where the company takes back and remanufactures old products, giving them a new life — and creating new revenues — when competitors’ products are in the landfill.

Loyalty can also be a benefit of IoT strategies for manufacturers’ own operations as well. Remember that the technological obstacles to instant sharing of real-time data have been eliminted for the supply chain as well. If you choose to share it, your resupply programs can also be automatically triggered on a M2M basis, giving an inherent advantage to the domestic supplier who can get the needed part there in a few hours, versua the low-cost supplier abroad who may take weeks to reach your loading dock.

It may be harder to quantify than quality improvements or streamlined production through the IoT, but that doesn’t mean that dependable revenue streams from loyal customers aren’t an important potential benefit as well.

Libelium: flexibility a key strategy for IoT startups

I’ve been fixated recently on venerable manufacturing firms such as 169-yr. old Siemens making the IoT switch.  Time to switch focus, and look at one of my fav pure-play IoT firms, Libelium.  I think Libelium proves that smart IoT firms must, above all, remain nimble and flexible,  by three interdependent strategies:

  • avoiding picking winners among communications protocols and other standards.
  • avoiding over-specialization.
  • partnering instead of going it alone.
Libelium CEO Alicia Asin

Libelium CEO Alicia Asin

If you aren’t familiar with Libelium, it’s a Spanish company that recently turned 10 (my, how time flies!) in a category littered with failures that had interesting concepts but didn’t survive. Bright, young, CEO Alicia Asin, one of my favorite IoT thought leaders (and do-ers!) was recently named best manager of the year in the Aragón region in Spain.  I sat down with her for a wide-ranging discussion when she recently visited the Hub of the Universe.

I’ve loved the company since its inception, particularly because it is active in so many sectors of the IoT, including logistics, industrial control, smart meters, home automation and a couple of my most favorite, agriculture (I have a weak spot for anything that combines “IoT” AND “precision”!) and smart cities.  I asked Asin why the company hadn’t picked one of those verticals as its sole focus: “it was too risky to choose one market. That’s still the same: the IoT is still so fragmented in various verticals.”

The best illustration of the company’s strategy in action is its Waspmote sensor platform, which it calls the “most complete Internet of Things platform in the market with worldwide certifications.” It can monitor up to 120 sensors to cover hundreds of IoT applications in the wide range of markets Libelium serves with this diversified strategy, ranging from the environment to “smart” parking.  The new versions of their sensors include actuators, to not simply report data, but also allow M2M control of devices such as irrigation valves, thermostats, illumination systems, motors and PLC’s. Equally important, because of the potentially high cost of having to replace the sensors, the new ones use extremely little power, so they can last        .

Equally important as the company’s refusal to limit itself to a single vertical market is its commitment to open systems and multiple communications protocols, including LoRaWAN, SIGFOX, ZigBee and 4G — a total of 16 radio technologies. It also provides both open source SDK and APIs.

Why?  As Asin told me:

 

“There is not going to be a standard. This (competiting standards and technology) is the new normal.

“I talk to some cities that want to become involved in smart cities, and they say we want to start working on this but we want to use the protocol that will be the winner.

“No one knows what will be the winner.

“We use things that are resilient. We install all the agents — if you aren’t happy with one, you just open the interface and change it. You don’t have to uninstall anything. What if one of these companies increases their prices to heaven, or you are not happy with the coverage, or the company disappears? We allow you to have all your options open.

“The problem is that this (not picking a standard) is a new message, and people don’t like to listen.  This is how we interpret the future.”

Libelium makes 110 different plug and play sensors (or as they call them, “Plug and Sense,” to detect a wide range of data from sources including gases, events, parking, energy use, agriculture, and water.  They claim the lowest power consumption in the industry, leading to longer life and lower maintenance and operating costs.

Finally, the company doesn’t try to do everything itself: Libelium has a large and growing partner network (or ecosystem, as it calls it — music to the ears of someone who believes in looking to nature for profitable business inspiration). Carrying the collaboration theme even farther, they’ve created an “IoT Marketplace,” where pre-assembled device combinations from Libelium and partners can be purchased to meet the specific needs of niches such as e-health,  vineyards, water quality, smart factories, and smart parking.  As the company says, “the lack of integrated solutions from hardware to application level is a barrier for fast adoption,” and the kits take away that barrier.

I can’t stress it enough: for IoT startups that aren’t totally focused on a single niche (a high-stakes strategy), Libelium offers a great model because of its flexibility, agnostic view of standards, diversification among a variety of niches, and eagerness to collaborate with other vendors.


BTW: Asin is particularly proud of the company’s newest offering, My Signals,which debuted in October and has already won several awards.  She told me that they hope the device will allow delivering Tier 1 medical care to billions of underserved people worldwide who live in rural areas with little access to hospitals.  It combines 15 different sensors measuring the most important body parameters that would ordinarily be measured in a hospital, including ECG, glucose, airflow, pulse, oxygen in

It combines 15 different sensors measuring the most important body parameters that would ordinarily be measured in a hospital, including ECG, glucose, airflow, pulse, blood oxygen, and blood pressure. The data is encrypted and sent to the Libelium Cloud in real-time to be visualized on the user’s private account.

It fits in a small suitcase and costs less than 1/100th the amount of a traditional Emergency Observation Unit.

The kit was created to make it possible for m-health developers to create prototypes cheaply and quickly.

Siemens’s Mobility Services: Trains Become IoT Labs on Wheels

George Stephenson's Killingworth locomotive Source: Project Gutenberg

George Stephenson’s Killingworth locomotive
Source: Project Gutenberg

As those of you who know rail history understand, with Stephenson as your last name, you’re bound to have a strong interest in railroads! Add in the fact that I was associate producer of an award-winning documentary on the subject back in the early 70’s, and it’s no wonder I was hooked when I got a chance to meet with some of Siemens’s top rail executives on my trip to Barcelona last week (Disclaimer: Siemens paid my expenses, but didn’t dictate what I covered, nor did they have editorial review of this piece).

What really excites me about railroads and the IoT is that they neatly encapsulate the dramatic transformation from the traditional industrial economy to the IoT: on one hand, the railroad was perhaps THE most critical invention making possible 19th century industry, and yet it still exists, in recognizable but radically-evolved form, in 2016. As you’ll see below, trains have essentially become laboratories on wheels!

I dwelt on the example of the Union Pacific in my e-book introduction to the IoT, SmartStuff, because to CIO Lynden Tennison was an early adopter, with his efforts focused largely on reducing the number of costly and dangerous derailments, through measures such as putting infrared sensors every twenty miles along the rail bed to spot “hotboxes,” overheating bearings. That allowed an early version of what we now know as predictive maintenance, pulling cars off at the next convenient yard so the bearings could be replaced before a serious problem. Even though the technology even five years ago was primitive compared to today, the UP cut bearing-related derailments by 75%.

Fast-forward to 2016, and Siemens’s application of the IoT to trains through its Mobility Services is yielding amazing benefits: increasing reliability, cutting costs, and even leading to possible new business models. They’ve taken over maintenance for more than 50 rail and transit programs.

While I love IoT startups with a radical new vision and no history to encumber them, Siemens is a beacon to those companies firmly rooted in manufacturing which may wonder whether to incorporate the IoT in their services and strategy. I suspect that its software products are inherently more valuable than competitors from pure-play software firms at commercial launch because the company eats its own dogfood and applies the new technology first to the products it manufactures and maintains — closing the loop.

Several of its executives emphasized that one of the advantages Siemens feels they enjoy is that their software engineers in Munich work in a corner of an old locomotive factory that Siemens still operates, so they can interact with those actually building and maintaining the engines on a daily basis. When it comes to security issues, their experience as a manufacturer means they understand the role of each component of the signaling system. Dr. Sebastian Schoning, ceo of Siemens client Gehring Technologies, which manufactures precision honing tools, told me that it was easier to sell these digital services to its own client base because so much of their current products include Siemens devices, giving them confidence in the new offerings. GE enjoys the same advantages of combining manufacturing and digital services with its Evolution Series locomotives.

The key to Siemens’s Mobility Services is Sinalytics, its platform architecture for data analysis not just for rail, but also for industries ranging from medical equipment to wind farms. More than 300,000 devices currently feed real-time data to the platform,   Consistent with my IoT-centric “Circular Company” vision, Sinalytics capitalizes on the data for multiple uses, including connectivity, data integration, analytics, and the all-important cyber security — they call the result not Big Data, but Smart Data. As with data services from jet turbine manufacturers such as Rolls Royce and GE, the platform also allows merging the data with data from sources such as weather forecasts which, in combination, can let clients optimize operating efficiency on a real-time M2M basis.  

With the new approach, trains become IoT laboratories on wheels, combining all of the key elements of an IoT system:

  • Sensing: there are sensors on the engines and gearboxes, plus vibration sensors on  microphones measure noises from bearings in commuter trains. They can even measure how engine oil is aging, so it can be changed when really needed, rather than on an arbitrary schedule.
  • Algorithms to make sense of the data and act on it. They read out patterns, record deviations & compare them with train control systems or vehicles of the same type.
  • Predictive maintenance replaces scheduled maintenance, dramatically reducing down-time and catastrophic failure.For example: “There’s a warning in one of the windows (of the control center display): engine temperature unusual. ‘We need to analyze the situation in greater depth to know what to do next  — we call it  ‘root cause analysis,” (say) Vice-President for Customer Support Herbert Padinger. ‘We look at its history and draw on comparative data from the fleet as a whole.’ Clicking on the message opens a chart showing changes in temperature during the past three months. The increased heat is gradually traced to a signal assembly. The Siemens experts talk with the customer to establish how urgent the need for action is, and then takes the most appropriate steps.”  He says that temperature and vibration analyses from the critical gearboxes gives Siemens at least three days advance notice of a breakdown — plenty of time for maintenance or replacement.  Predictive maintenance is now the norm for 70-80% of Siemens’s repairs.
  • Security (especially important given all of the miles of track and large crowds on station platforms): it includes video-based train-dispatch and platform surveillance using its SITRAIL D system, as well as cameras in the trains. The protections have to run the gamut from physical attacks to cyber attacks.  For security, the data is shared by digital radio, not networks also shared by consumers.

When operations are digitized, it allows seamlessly integrating emerging digital technologies into the services. Siemens Digital Services also included augmented reality (so repair personnel can see manuals on heads-up displays), social collaboration platforms, and — perhaps most important — 3-D printing-based additive manufacturing, so that replacement parts can be delivered with unprecedented speed. 3-D printing also allows dramatic reduction in parts inventories and allows replacement of obsolete parts that may no longer be available through conventional parts depots or even — get this — to improve on the original part’s function and/or durability, based on practical experience gained from observing the parts in use.  Siemens has used 3-D printing for the past last 3 years, and it lets them assure that they will have replacements for the locomotive’s entire lifespan, which can exceed 30 years.

The results of the new approach are dramatic.

  • None of the Velaro trains that Siemens maintains for several operators have broken down since Sinalytics was implemented. Among those in Spain only 1 has left more than 15 min. behind time in 2,300 trips: .0004%!
  • Reliability for London’s West Coast Mainline is 99.7%

  • Perhaps most impressive, because of the extreme cold conditions it must endure, the reliability rate for the Velaro service in Russia is 99.9%!

Their ultimate goal is a little higher: what Siemens calls (pardon the pun) 100% Railability (TM).

And, consistent with what other companies find when they fully implement not only IoT technology, but also what I like to call “IoT Thinking,” when it does reach those previously inconceivable quality benchmarks, the company predicts that, as the software and sensors evolve, the next stage will be new business models in which billing will be determined by guaranteeing customers availability and performance.

PS: I’ll be posting more about my interviews with Siemens officials and the Gartner event in coming days.

Smart Disposables: Could This Be Birth of Internet of Everything?

Could EVERYTHING be “smart?” It may be happening sooner we thought, and with implications that are hard to fathom today.

That’s the potential with new technology pioneered by Shyam Gollakota, an assistant professor at the University of Washington.  For the first time, it would let battery- and cordless-less devices harvest signals from Wi-Fi, radio, or TV to communicate and power themselves.

Astounding!

For a long time, the most “out there” idea about IoT sensors has been Prof. Kris Pister’s “smart dust” concept, which aimed at a complete sensor/communication system in a package only one cubic millimeter in size. Pister argued that such devices would be so small and cheap that they could be installed — or perhaps even scattered — almost everywhere. The benefits could be varied and inconceivable in the past. According to Pister, possible applications could include:

  • “Defense-related sensor networks
    • battlefield surveillance, treaty monitoring, transportation monitoring, scud hunting, …
  • Virtual keyboard
    • Glue a dust mote on each of your fingernails.  Accelerometers will sense the orientation and motion of each of your fingertips, and talk to the computer in your watch.  QWERTY is the first step to proving the concept, but you can imagine much more useful and creative ways to interface to your computer if it knows where your fingers are: sculpt 3D shapes in virtual clay, play  the piano, gesture in sign language and have to computer translate, …
    • Combined with a MEMS augmented-reality heads-up display, your entire computer I/O would be invisible to the people around you.  Couple that with wireless access and you need never be bored in a meeting again!  Surf the web while the boss rambles on and on.
  • Inventory Control
    • The carton talks to the box, the box talks to the palette, the palette talks to the truck, and the truck talks to the warehouse, and the truck and the warehouse talk to the internet.  Know where your products are and what shape they’re in any time, anywhere.  Sort of like FedEx tracking on steroids for all products in your production stream from raw materials to delivered goods.
  • Product quality monitoring
    • temperature, humidity monitoring of meat, produce, dairy products
      • Mom, don’t buy those Frosted Sugar Bombs, they sat in 80% humidity for two days, they won’t be crunchy!
    • impact, vibration, temp monitoring of consumer electronics
      • failure analysis and diagnostic information, e.g. monitoring vibration of bearings for frequency signatures indicating imminent failure (back up that hard drive now!)
  • Smart office spaces
    • The Center for the Built Environment has fabulous plans for the office of the future in which environmental conditions are tailored to the desires of every individual.  Maybe soon we’ll all be wearing temperature, humidity, and environmental comfort sensors sewn into our clothes, continuously talking to our workspaces which will deliver conditions tailored to our needs.  No more fighting with your office mates over the thermostat.
  • Interfaces for the Disabled (courtesy of Bryndis Tobin)
    • Bryndis sent me email with the following idea: put motes “on a quadriplegic’s face, to monitor blinking & facial twitches – and send them as commands to a wheelchair/computer/other device.”  This could be generalized to a whole family of interfaces for the disabled.  Thanks Bryndis!”

Now imagine that a critical component of such a tiny, ubiquitous device was removed. Because it didn’t need a battery it could be even smaller and cheaper (because of cheaper and simpler radio hardware circuitry).

The goal is having billions of disposable devices start communicating,” Gollakota said (my emphasis).

You may remember that I’ve written before about my metaphor of a pre-IoT era of “Collective Blindness,” the universal inability to peer (literally or figuratively) inside things in the past, which forced us to create all sorts of work-arounds to cope with that lack of real-time data. Imagine how precise our knowledge about just about everything will be if Gollakota’s technology becomes commonplace.

.As Technology Review reported, the critical challenge is making it possible for a device lacking a traditional power source to communicate: “Transferring power wirelessly is not a new trick. But getting a device without a conventional power source to communicate is harder, because generating radio signals is very power-intensive and the airwaves harvested from radio, TV, and other telecommunication technologies hold little energy.”

The principle making the innovation possible is “backscattering,” reflecting waves, particles or signals back in the direction they came from, which creates a new signal.

The early results are encouraging. Gollakata has made a contact lens that can connect with a smartphone. Think I’ll pass on that one, but other devices he and his team have created include brain implants and “a flexible skin patch that can sense temperature and respiration, a design that could be used to monitor hospital patients.”  Marketers will love this one: a concert poster broadcasting a bit of the featured band’s music over FM radio!

Jeeva Wireless, Gollakata’s commercial spinoff, is using a variety of the technology, “passive Wi-Fi.” Devices using it can data up to 100 feet and connect through walls.

Tiny passive devices using backscatter could be manufactured for as little as a dollar. “In tomorrow’s smart home, security cameras, temperature sensors, and smoke alarms should never need to have their batteries changed.”

Gollakata sums up the potential impact: “We can get communication for free” (my emphasis).

That’s incredible, but in light of the continuing series of major DDoS attacks made possible by weak or non-existent IoT security measures, I must remind everyone that speed, power, and ubiquity aren’t everything: we also need IoT security, so I hope the low cost and ability to function without a dedicated energy source won’t obscure that need as well.


 

BTW: a MIT profile on Gollakata mentions one of his other, related, inventions, which I think would mesh beautifully with my SmartAging vision to help seniors age in place in better health.

It’s called  WiSee, which uses wireless signals such as Wi-Fi to “enable whole-home sensing and recognition of human gestures. Since wireless signals do not require line-of-sight and can traverse through walls, WiSee can enable whole-home gesture recognition using few wireless sources (e.g., a Wi-Fi router and a few mobile devices in the living room).”

I love the concept for seniors, because (like Echo, which I’m finally getting!!) it doesn’t require technical expertise, which many seniors lack and/or find intimidating, to launch and direct automated devices. In this case, the activation is through sensing and recognition of human gestures. According to Gollakata,“’Gestures enable a whole new set of interaction techniques for always-available computing embedded in the environment. As an example, he suggests that a hand swiping motion in the air could enable a user to control the radio volume while showering – or change the song playing on the stereo in the living room while you are cooking in the kitchen.”

He goes on to explain:

“…. that the approaches offered today to enable gesture recognition – by either installing cameras throughout a home/office or outfitting the human body with sensing devices – are in most cases either too expensive or unfeasible. So he and his group members are skirting these issues by taking advantage of the slight changes in ambient wireless signals that are created by motion. Since wireless signals do not require line-of-sight and can traverse through walls, he and his group have achieved the first gesture recognition system that works in those situations. ‘We showed that this approach can extract accurate information about a rich set of gestures from multiple concurrent users.”

Combine that with speaking to Alexa, and even the most frail seniors could probably control most of the functions in a smart home. Gollakota says that the approaches offered today to enable gesture recognition – by either installing cameras throughout a home/office or outfitting the human body with sensing devices – are in most cases either too expensive or unfeasible. So he and his group members are skirting these issues by taking advantage of the slight changes in ambient wireless signals that are created by motion. Since wireless signals do not require line-of-sight and can traverse through walls, he and his group have achieved the first gesture recognition system that works in those situations. “We showed that this approach can extract accurate information about a rich set of gestures from multiple concurrent users, “he says.

Incredible work, professor!

Don’t Say I Didn’t Warn You: One of Largest Botnet Attacks Ever Due to Lax IoT Security

Don’t say I didn’t warn you about how privacy and security had to be THE highest priority for any IoT device.

On September 19th, Chris Rezendes and I were the guests on a Harvard Business Review webinar on IoT privacy and security. I once again was blunt that:

  • you can’t wait until you’ve designed your cool new IoT device before you begin to add in privacy and security protections. Start on Day 1!
  • sensors are particularly vulnerable, since they’re usually designed for minimum cost, installed, and forgotten.
  • as with the Target hack, hackers will try to exploit the least protected part of the system.
  • privacy and security protections must be iterative, because the threats are constantly changing.
  • responsible companies have as much to lose as the irresponsible, because the result of shortcomings could be held against the IoT in general.

The very next day, all hell broke loose. Hackers used the Mirai malware to launch one of the largest distributed denial-of-service attack ever, on security blogger Brian Krebs (BTW, the bad guys failed, because of valiant work by the good guys here in Cambridge, at Akamai!).

 

The threat was so bad that DHS’s National Cyber Awareness System sent out the first bulletin I ever remember getting from them dealing specifically with IoT devices. As it warned, “IoT devices are particularly susceptible to malware, so protecting these devices and connected hardware is critical to protect systems and networks.”  By way of further explanation, DHS showed how ridiculously simple the attacks were because of inadequate protection:

“The Mirai bot uses a short list of 62 common default usernames and passwords to scan for vulnerable devices. Because many IoT devices are unsecured or weakly secured, this short dictionary allows the bot to access hundreds of thousands of devices. The purported Mirai author claimed that over 380,000 IoT devices  (my emphasis) were enslaved by the Mirai malware in the attack on Krebs’ website.”

A later attack in France during September using Mirai resulted in the largest DDoS attack ever.

The IoT devices affected in the latest Mirai incidents were primarily home routers, network-enabled cameras, and digital video recorders. Mirai malware source code was published online at the end of September, opening the door to more widespread use of the code to create other DDoS attacks.

How’d they do it?

By a feature of the malware that detects and attacks consumer IoT devices that only have default, sometimes hardwired, passwords and usernames (or, as Dark Reading put it in an apocalyptic sub-head, “Mirai malware could signal the beginning of new trend in using Internet of Things devices as bots for DDoS attacks.”

To place the blame closer to home (well, more accurately, in the home!) you and I, if we bought cheap smart thermostats or baby monitors with minimal or no privacy protections and didn’t bother to set up custom passwords, may have unwittingly participated in the attack. Got your attention yet?

 

No responsible IoT inventor or company can deny it any longer: the entire industry is at risk unless corporate users and the general public can be confident that privacy and security are baked in and continuously upgraded. Please watch the HBR webinar if you haven’t already, and pledge to make IoT privacy and security Job #1!


 

PS: According to the DHS bulletin:

“In early October, Krebs on Security reported on a separate malware family responsible for other IoT botnet attacks. This other malware, whose source code is not yet public, is named Bashlite. This malware also infects systems through default usernames and passwords. Level 3 Communications, a security firm, indicated that the Bashlite botnet may have about one million (my emphasis) enslaved IoT devices.”

BTW: thanks for my friend Bob Weisberg for reminding me to give this situation its due!

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Circular Company: Will Internet of Things Spark Management Revolution?

Could the IoT’s most profound impact be on management and corporate organization, not just cool devices?

I’ve written before about my still-being-refined vision of the IoT — because it (for the first time!) allows everyone who needs instant access to real-time data to do their jobs and make better decisions to share that data instantly —  as the impetus for a management revolution.

My thoughts were provoked by Heppelmann & Porter’s observation that:

“For companies grappling with the transition (to the IoT), organizational issues are now center stage — and there is no playbook. We are just beginning the process of rewriting the organization chart that has been in place for decades.”

If I’m right, the IoT could let us switch from the linear and hierarchical forms that made sense in an era of serious limits to intelligence about things and how they were working at thaFor companies grappling with the transition, organizational issues are now center stage—and there is no playbook. We are just beginning the process of rewriting the organization chart that has been in place for decades.t moment, to circular forms that instead eliminate information “silos” and instead give are circular, with IoT data as the hub. 

This article expands on that vision. I’ve tried mightily to get management journals to publish it. Several of the most prestigious have given it a serious look but ultimately passed on it. That may be because it’s crazy, but I believe it is feasible today, and can lead to higher profits, lower operating costs, empowering our entire workforces, and, oh yeah, saving the planet.

Audacious, but, IMHO, valid.  Please feel free to share this, to comment on it, and, if you think it has merit, build on it.

Thanks,

W. David Stephenson


The IoT Allows a Radical, Profitable Transformation to Circular Company Structure

 

by

W. David Stephenson

Precision assembly lines and thermostats you can adjust while away from home are obvious benefits of the Internet of Things (IoT), but it might also trigger a far more sweeping change: swapping outmoded hierarchical and linear organizational forms for new circular ones.

New org charts will be dramatically different because of an important aspect of the IoT overlooked in the understandable fascination with cool devices. The IoT’s most transformational aspect is that, for the first time,

everyone who needs real-time data to do their jobs better or
make better decisions can instantly 
share it.

That changes everything.

Linear and hierarchical organizational structures were coping mechanisms for the severe limits gathering and sharing data in the past. It made sense then for management, on a top-down basis, to determine which departments got which data, and when.

The Internet of Things changes all of that because of huge volumes of real-time data), plus modern communications tools so all who need the data can share it instantly. 

This will allow a radical change in corporate structure and functions from hierarchy: make it cyclical, with real-time IoT data as the hub around which the organization revolves and makes decisions.

Perhaps the closest existing model is W.L. Gore & Associates. The company has always been organized on a “lattice” model, with “no traditional organizational charts, no chains of command, nor predetermined channels of communication.”  Instead, they use cross-disciplinary teams including all functions, communicating directly with each other. Teams self-0rganize and most leaders emerge spontaneously.

As Deloitte’s Cathy Benko and Molly Anderson wrote, “Continuing to invest in the future using yesteryear’s industrial blueprint is futile. The lattice redefines workplace suppositions, providing a framework for organizing and advancing a company’s existing incremental efforts into a comprehensive, strategic response to the changing world of work.”  Add in the circular form’s real-time data hub, and the benefits are even greater, because everyone on these self-organizing teams works from the same data, at the same time.

You can begin to build such a cyclical company with several incremental IoT-based steps.

One of the most promising is making the product design process cyclical. Designers used to work in a vacuum: no one really knew how the products functioned in the field, so it was hard to target upgrades and improvements. Now, GE has found it can radically alter not only the upgrade process, but also the initial design as well:

“G.E. is adopting practices like releasing stripped-down products quickly, monitoring usage and rapidly changing designs depending on how things are used by customers. ‘We’re getting these offerings done in three, six, nine months,’ (Vice-President of Global Software William Ruh said). ‘It used to take three years.’”

New IoT and data-analytics tools are coming on the market that could facilitate such a shift. GE’s new tool, “Digital Twins,” creates a wire-frame replica of a product in the field (or, for that matter, a human body!) back at the company. Coupled with real-time data on its status, it lets everyone who might need to analyze a product’s real-time status (product designers, maintenance staff, and marketers, for example) to do so simultaneously.

The second step toward a cyclical organization is breaking down information silos.

Since almost every department has some role in creation and sales of every product, doesn’t it make sense to bring them together around a common set of data, to explore how that data could trigger coordinated actions by several departments? 

Collaborative big-data analysis tools such as GE’s Predix, SAP’s HANA, and Tableau facilitate the kind of joint scrutiny and “what-if” discussions of real-time data that can make circular teamwork based on IoT-data sharing really achieve its full potential.

The benefits are even greater when you choose to really think in circular terms, sharing instant access to that real-time data not only companywide, but also with external partners, such as your supply chain and distribution network – and even customers – not just giving them some access later on a linear basis.  For example, SAP has created an IoT-enabled vending machine. If a customer opts in, s/he is greeted by name, and may be offered “your regular combination” based on past purchases, and/or a real-time discount. That alone would be neat from a marketing standpoint, but SAP also opened the resulting data to others, resulting in important logistics improvements. Real-time machine-to-machine (M2M) data about sales at the new vending machines automatically reroute resupply trucks to those machines currently experiencing the highest sales. 

With the IoT, sharing data can make your own product or service more valuable. With the Apple HomeKit, you can say “Siri, it’s time for bed,” and the Hue lights dim, Schlage lock closes, and Ecobee thermostat turns down. By sharing real-time IoT data, each of these companies’ devices become more valuable in combinations than they are by themselves.

Hierarchical and linear management is outmoded in the era of real-time data from smart devices. It is time to begin to replace it with a dynamic, circular model with IoT data as its hub.

Smart Infrastructure Logical Top Priority for IoT

The only issue Clinton and Trump can agree on is the need for massive improvements to the nation’s crumbling infrastructure, especially its roads and bridges. But, please, let’s make it more than concrete and steel.

Let’s make it smart, and let’s make it the top priority for the IoT because of the trickle-down effects it will have on everything else in our economy.

Global economist Jeffrey Sachs stated the case eloquently in a recent Boston Globe op-ed, “Sustainable infrastructure after the Automobile Age,” in which he argued that the infrastructure (including not only highways and bridges but also water systems, waste treatment, and the electric grid) shaped by the automotive age has run its course, and must be replaced by one “in line with new needs, especially climate safety, and new opportunities, especially ubiquitous online information and smart machines.”

I’m currently reading Carlo Ratti and Matthew Claudel’s The City of Tomorrow: Sensors, Networks, and the Future of Urban Life, which makes the same argument: “The answer to urban expansion and diffusion — and the host of social consequences that they bring — may be to optimize, rather than increase, transportation infrastructure.”

The IoT is perfectly suited to the needs of a new information-based infrastructure, especially one which must balance promoting the economy and mobility with drastic reductions in greenhouse gasses (transportation produces approximately a third of the U.S.’s  emissions). It can both improve maintenance (especially for bridges) through built-in sensors that constantly monitor conditions and can give advance warning in time to do less-costly and less-disruptive predictive maintenance, and reduce congestion by providing real-time information on current congestion so that real-time alterations to signals, etc., can be made rather than depending on outmoded fixed-interval stoplights, etc.

Sachs points out that infrastructure spending as a percentage of GDP has fallen since the Reagan years, and that it will require much more spending to bring it up to date.

A good place to look for a model is China.  The country already sports the largest concentration of M2M connections in the world: “74 million connections at the end of 2014, representing almost a third of the global base,” much of that in the form of smart bridges, smart rails, and smart grid, and critical because of the country’s rapid economic growth (Ratti cites a Beijing traffic jam that immobilized cars for an astounding 12 days!). Similarly, the government aims to have 95% of homes equipt with smart meters by next year.The country has used its investment in smart infrastructure to build its overall IoT industry’s ability to compete globally.

Sachs argues for a long-term smart infrastructure initiative:

“I propose that we envision the kind of built environment we want for the next 60 years. With a shared vision of America’s infrastructure goals, actually designing and building the new transport, energy, communications, and water systems will surely require at least a generation, just as the Interstate Highway System did a half-century ago.”

He says we need a plan based on three priorities to cope with our current national and global challenges:

“We should seek an infrastructure that abides by the triple bottom line of sustainable development. That is, the networks of roads, power, water, and communications should support economic prosperity, social fairness, and environmental sustainability. The triple bottom line will in turn push us to adopt three guiding principles.

First, the infrastructure should be “smart,” deploying state-of-the-art information and communications technologies and new nanotechnologies to achieve a high efficiency of resource use.

Second, the infrastructure should be shared and accessible to all, whether as shared vehicles, open-access broadband in public areas, or shared green spaces in cities.

Third, transport infrastructure should promote public health and environmental safety. The new transport systems should not only shift to electrical vehicles and other zero-emission vehicles, but should also promote much more walking, bicycling, and public transport use. Power generation should shift decisively to zero-carbon primary energy sources such as wind, solar, hydro, and nuclear power. The built environment should be resilient to rising ocean levels, higher temperatures, more intense heat waves, and more extreme storms.”

The IoT, particularly because of its ability to let us share real-time data that in turn can regulate the infrastructure, is ideally suited to this challenge. It’s time for Congress to not only spend on infrastructure but to do so wisely.

The result will be not only the infrastructure we need, but also a more robust IoT industry in general.

 

I’ll be on live Thursday morning talking the IoT and Smart Cities

Cities are the future of global civilization and the economy, and smart cities are the only way they’ll survive and prosper!

Join me and two SAP experts on the subject, Dina Dayal (global vice president for Digital Enterprise Platform Group) and Saj Kumar (vice president of Digital Transformation and Internet of Things) as we guest on Bonnie D. Graham’s always-enjoyable Coffee Break With Game Changers, 11 AM EDT, 8 AM PDT (it will be archived at the site if you can’t listen live.

Bonnie likes us to start with a provocative (and relevant) quote, and mine will be from Jane Jacobs’ great Death and Life of American Cities:

Cities have the capability of providing something for everybody, only because,
and only when, they are created by everybody.”

… with the emphasis on everybody: I’ll explain that there really is an important role in smart cities for city government, the private sector, and — often ignored — grassroots innovators.

A critical key is the global Things Network, created by Wienke Gieseman and his Gang of Ten in Amsterdam,  who created a free LoRaWAN city-wide data network for $12,000 and in less than a month, and then went on to create a global network and a crowdsourced campaign to bring the cost of LoRaWAN hubs down to $200.

I like to think I was there at the beginning, working with Vivek Kundra, then the DC’s CTO (before his accomplishments there led Obama to name him the first US CIO). Vivek and Mayor Fenty took the bold move of releasing more than 40 major city data bases on a real-time basis, then held a contest to get smart developers to create new-fangled “apps” (remember, this was 2008!) to capitalize on them. Because the apps were open-source, they’ve been constantly copied and improved in the years since then.

And that’s only the beginning:

  • creative startups such as Alicia Asin’s Libelium, working with an enlightened city government, have made Barcelona a massive testlab for the Iot, and arguably THE smart city of the day
  • Columbus OH won the Obama Administration’s Smart City competition for its all-inclusive transportation scheme (and I do mean all-inclusive: who ever thought a better transportation network could be used to cut infant mortality???)
  • Smart Cities organizations have been formed in cities worldwide to share ideas — we’re all in this together!

And, of course, I’m going to bring the discussion down to earth by really getting down and dirty — yessiree, we’re gonna talk trash cans.

Be there or be square!