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.

 

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.

General Electric Keeps on Practicing What They Preach!

I’m beginning to sound like a schill (no, not a typo, just a bad joke: short for [Curt] Schilling, the former Red Sox pitcher — sorry, I can’t get those guys out of my head today…) for GE, but it’s hard to argue with their impressive record of walking their talk about the “Industrial Internet,” their marketing term for the subset of the Internet of Things dealing with the industrial sector.

The latest evidence? A report today in the NYTimes‘ “Bits” blog that GE has just announced “14 more products that combine industrial equipment, Internet-linked sensors and software to monitor performance and analyze big streams of data. G.E. had previously announced 10 similar industrial products.”

Equally impressive, the Industrial Age behemoth turned nimble IoT leader said that by next year, almost all industrial products it makes will have built-in sensors and Big Data software to analyze the huge data streams those sensors will create.

Right now I’m writing an e-book on IoT strategy for C-level executives (not sure if I can disclose the customer — it’s a big one!) and GE VP of Global Software William Ruh, used the news to fire a shot across the bow at companies that are slow to realize a fundamental paradigm shift in manufacturing, product design and maintenance is well underway:

““Everyone wants prediction about performance, and better asset management… The ideas of speed, of information velocity, is what will differentiate the winners from the losers.”

You in the corner office: got your attention?

Equally important, given my insistence that the IoT is all about collaboration, GE simultaneously announced partnerships with Cisco, AT&T and Intel. It had already inked deals with Accenture and Amazon’s cloud subsidiary and has also invested in  Pivotal, an Industrial Internet app creator.

Smart companies will follow GE’s lead in radically reforming the product design process to capitalize on the rapid feedback on performance that the Industrial Internet products’ built-in sensors yield. According to Ruh, they’re switching to an iterative design process, with rapid changes based on data from the field:

“… 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. These approaches follow the ‘lean start-up’ style at many software-intensive Internet companies.

“’We’re getting these offerings done in three, six, nine months,’ he said. ‘It used to take three years.’” (my emphasis)

That change is definitely going to make it into my e-book! Brilliant example of how the IoT, by allowing companies to think in terms of systems dynamics, especially feedback loops, will have profound impacts on the design and manufacturing processes, integrating them as never before (oh, and don’t forget, the data from the built-in sensors will also allow companies to start marketing services — such as leasing jet turbines, with the lease cost based on the actual amount of thrust the engines create)!

Combined, that’s definitely a paradigm shift!

Oh, I almost forgot. Here’s a brief rundown of the products themselves and the industries served. They are clustered under the Predictivity name, and are powered by Predix, a new IoT platform:

  • The Drilling iBox System (oil and gas)
  • Reliability Max (oil and gas
  • Field 360 (oil and gas)
  • System 1 Evolution (oil and gas)
  • Non-destructive Testing Remote collaboration (oil and gas)
  • LifeMax Advantage (power and water)
  • Rail Connect 360 Monitoring and Diagnostics (transportation)
  • ShipperConnect (transportation)
  • Flight Efficiency Services (aviation)
  • Hot SimSuite (healthcare)
  • Cloud Imaging (healthcare)
  • Grid IQ Insight (energy management)
  • Proficy MaxxMine (energy management)

Given the diversity of industries the Predictivity products serve and GE’s global clout, I predict this level of commitment will radically accelerate the IoT’s adoption by big business, as well as accelerating the payback in terms of lower operating, energy and maintenance costs, and reduced environmental impacts.

Will GE’s competitors in these sectors get on board, or will they be left in the dust?

 

Launching New Service Speaking About the Internet of Things

I’ve given speeches to business and academic audiences around the world for nearly 30 years, but haven’t tried my hand at paid public speaking until now!

However, I feel so strongly about the transformational potential of the Internet of Things that I want to evangelize on the Big Stage now, reaching corporate management, associations, and — very important — college and university students, with the message about how the IoT will change everything, and the challenges and opportunities it will bring.

So, I’ve added a new page to this site, promoting myself as a paid speaker and seminar leader.

While I’m glad to custom-craft a speech to your audience’s interests, I have several main ones tailored to various needs:

“It’s Not Just About Things, It’s About People… and Their Dreams”. Sometimes the emphasis on Internet of Things technology obscures the deeper truth: the IoT is really all about people – and improving their lives. This speech introduces laypeople and business leaders to the Internet of Things’ potential to transform every aspect of life for the better! From slippers that save the elderly from falls to hyper-efficient assembly lines that bring manufacturing jobs back to America, I give an uplifting, rapid-fire overview of the many ways the IoT is already changing our lives – and preview the even greater changes to come! I also talk about the important steps, such as new mind sets that value sharing information over hoarding it, that are necessary to fully realize the IoT’s potential.

Josh Siegel is 24. He is Reinventing the Auto Industry (this lecture is specifically aimed at college students). Josh Siegel is a 24-year old Detroiter, MIT grad student and entrepreneur. He uses the IoT to reinvent cars – whether or not Detroit is ready. Alexandra Deschamps-Sonsino is 32, and created an IoT sensation, the Good Night Lamp. Dulcey Madden is 32 (her partners are both 24), and her Peeko “onsie” is saving the lives of infants who might otherwise die from Sudden Infant Death Syndrome.

In this lecture you’ll hear about these and other young visionaries and inventors who are discovering new entrepreneurial opportunities in the Internet of Things. I challenge young listeners: what’s your passion? How will you find satisfying – and enriching – work in this exciting new field? What problem can you solve by inventing an IoT device?

P.S: Ask me to stay around the day after my speech to meet with your senior staff to advise them on how the IoT will affect your college or university, and how you can use it to increase efficiency and cut operating costs!

“I … see all … the devices in your home and … control them”. That’s how a Forbes reporter woke up an unsuspecting homeowner who’d bought an advanced home automation system – and got non-existent security in the bargain!

The Internet of Things might come to a grinding halt if the public and companies feel that their privacy and security are being violated. That’s a very real possibility – former CIA director David Petraeus waxed poetic about its potential as a spycraft tool, and a number of sensationalistic mainstream media reports have detailed the possible dangers of lax IoT privacy and security measures.

In this speech, I may scare you, but I’ll definitely get your attention! I lay out all the risks, issue a challenge to everyone involved in the IoT to make security and privacy a priority, and detail the current state of collaborative efforts to improve security and privacy.

I’m enthusiastic, well-informed, witty, (add positive adjective of your choice here …… , LOL) and convincing! If you’re interested in booking me, just fill out the contact form and download my “speaker one sheet.”

It’s Official: Tom Friedman Anoints the IoT; Plus Jobs Issue Is Raised!

Posted on 16th September 2013 in 3-D printing, Internet of Things, M2M, maintenance, manufacturing, services

OK, the Internet of Things is officially a Big Thing: Tom “World is Flat” Friedman wrote about it in the Sunday NY Times.

Friedman, searching for evidence of American “exceptionalism” in a bleak landscape of Capitol Hill paralysis, etc. zeroed in on GE’s “Industrial Internet” initiatives as a ray of hope. As he wrote,

“I wanted to see what new technologies, and therefore business models — and therefore jobs — it might be spawning that public policy, and education policy, might enhance. I have no idea whether or how G.E. will profit from any of these breakthroughs, but I saw the outlines there of three radically new business trends that the United States should want to dominate.”

One of those themes was how 3-D printing could streamline the design and production process.

The second, which I wrote about earlier, was the concept of crowdsourcing design, in particular the contest GE held to design a new jet turbine mount (more about that later!!!).

Finally, Friedman zeroed in on the IoT, specifically widespread use of sensors:

“Lastly, we are on the cusp of what G.E. calls ‘the Industrial Internet’ or the ‘Internet of Things’ — meaning that every major part of a G.E. jet engine, locomotive or turbine is now equipped with online sensors that constantly measure and broadcast every aspect of performance. Computers capture all this big data and use it to improve everything from the flight path to energy efficiency.”

He gave several examples, such as wind turbines and hospital beds, where data from sensors can help to optimize efficiency and cut operating costs. He pointed out that the data allows GE to create new services “… that offer not just to manage an airline’s or railroad’s engines, but how fast all its planes or trains go, how flight and train schedules are coordinated and even how its equipment is parked to get optimal performance and energy efficiency (aside to marketing managers: what kinds of services would the IoT allow you to introduce, perhaps replacing actual sales of products with leases based on use? Think about it!).

Friedman concludes, “Watch this space, even if Washington doesn’t: When everything and everyone becomes connected, and complexity is free and innovation is both dirt-cheap and can come from anywhere, the world of work changes.”

Indeed! Nice to have someone with Friedman’s clout recognizing the IoT is a paradigm shift!

MEANWHILE: Make certain to read the comments following the column. They are primarily negative, and zero in on one thing: the IoT’s threat to jobs. In particular, the critics focused on the GE engine mount design contest.  One was particularly pointed:

“According to CNNMoney, General Electric CEO Jeffrey Immelt pocketed $25.8 million in total compensation in 2012. That’s about $20,000 every hour and a half. How come 8 geniuses cost only 90 minutes of CEO time?”

You’ve gotta agree, $20,000 ($7,000 to the winner) is a pretty paltry sum considering what GE gets in return, and given readers’ suspicions that companies may let go their salaried designers and instead exploit freelancers (I’ve thought the same about some of the incentives offered by Innocentive member companies for some of the crowdsourcing projects that they’ve offered), you can bet that there will be more criticisms in the future if this becomes a common practice.

The IoT will undoubtably result in loss of some jobs — disruptive technologies do that — although optimists say they will create jobs as well. But if companies don’t want to reap a lot of criticism for their IoT initiatives, they’d better put some thought into the job creation aspect as well!