Internet of Things (IoT): Building a scalable Info-pliance (information appliance) business
June 1, 2015 Leave a comment
Is IoT hype or a new level of capability
“The more things change, the more they stay the same” goes the story. The Internet is a buzz around IoT (Internet of Things). But just what is it? Your computer browser , Iwatch, house thermostat, light bulbs, your car? Basically if technology vendors have their way almost anything could and should be connected to the Internet. Sounds rather appealing don’t you think? Imagine laying on the beach and turning you house lights on and thermostat up because you’ll be back home from your vacation in a few hours. My thoughts are these are devices that create and/or consume information. Turing on a light remotely has been done via multiple technologies for a while. However, things change when the light gives you back information like, “I’m off/on, I’m about 70% in my forecasted lifetime. Maybe it consumes information to make decisions: a furnace filter telling your its time to change me because the airflow throughout the house is lower and the blower is having to work harder. Or possibly the furnace will tell you’re house to order a new filter to be picked up when you’re at Home Depot tomorrow. These are what I will call “Info-pliances” as the primary function is based upon utilization of information, not simply having remote activation.
Now for the reality many devices will have to be modified to realize that dream; consider the dozens of apps you’ll need on your smartphone because each speaks different language. What about security? That small little thing. If you worry about having your credit card information stolen, consider what will happen when your door locks are just a simply scan or hack. How about that security camera you bought to monitor your house when you’re away –vulnerabilities in webcams have already hit the news where hackers and the government can turn on your camera without you knowing. You and you significant other could become the next YouTube sensation without even knowing.
All this sounds like I’m a fear-mongering luddite. If you’ve read other posts on my blog you know I’m far from it. During the 70s and 80s I might have well been Microsoft’s, Asus, Radio Shack and Heathkit’s greatest consumer customer. I had wired up my Condo with all sorts of devices to automate my little place. Thus driving my future wife crazy when lights would come on without her touch a switch, announcements that someone was approaching the front door, heat and air conditioning settings could be changed from my home office computer. My home now has its own private datacenter and multiple networks running throughout, in addition being connected to Microsoft’s Cloud. So if I’m not forecasting doom and gloom what’s this about?
First off most of these issues have similar analogs “in the real world Neo”. Security and Privacy has always been a spy vs. spy game and is likely to continue to be such in the future. The real issue to overcome will be integration and scalability if IoT is to become a practical and profitable business. Consider the consumer appliance industry today. Unless you are manufacturing high end products, with large margins, and a near first to market provider your market share and profitability is limited and days in market are numbered. And even then smaller competitors are likely to replace your product and features at a lower cost to consumers.
Enterprise IoT Strategy
What this suggests that if an enterprise is considering entry into the Info-pliances market it would be wise to study the analog business. Years ago there were many appliance producing corporations. Over the years these have consolidated with many Brand names being just that, parts manufactured by the same company but Branded differently to segment the market on perceived value and status (Consider the real differences between a Firebird and a Camaro in the 80s). This façade of differentiation was mainly a marketing strategy. However, underneath such a strategy to be effective an enterprise needed several elements to come together:
First a product architecture that would enable interoperability. This is based upon the assumption consumers want interoperability which appears to be the case from a casual observation. In an info-pliance, this is all the more important as its value is based upon interoperability. With limited interoperability the perceived value of the appliance is less.
Second traditional economies of scale strategies may require reversing. That is rather than looking how to ramp up production of a single product, vendors may need to create a collection of components than can be assembled and packaged into multiple types of appliances rather than one specific one. Consider creating a modular family of components that can be assemble like Lego Blocks. Electronics manufactures already do this at a lower level of capability.
Once such enabling capabilities are in place an enterprise could start a virtuous loop. That is to say, adding new info-pliances cheaply because the use many of the same components and interoperate together out of the box. This creates a double loop: Quicker time to market and increase market share loop, Increased customer value perception with each new device Thus having the potential of creating a competitive advantage at another level.
Will info-pliances take off and become the killer app of the decade? Only time and the consumer will tell.