IoT is widening the chasm between the have and have-nots. No this is not about a privileged human social class but instead about the companies that get how disruptive some technology innovations can be and those who don’t.
Cloud is lowering operating costs, speeding time to market and in some cases generating new revenues. Big Data is giving unique insights into previously unseen trends in an ocean of data. However both are dwarfed by the power of acting upon these cost, time-to-market and knowledge advantages. IoT is substituting slow human-driven processes by fully automated processes. The end result is that companies can do in minutes what traditionally would be done in months. Let’s look at some examples:
Retail and in-store studies
Supermarkets know what you buy but they don’t know what you almost bought. Neither do they know if you spend quite some time in a specific isle and ruched through another. The traditional way is to survey a subset of shoppers during weeks, often months, and extrapolate. Via IoT you just embed tracking technology in shopping carts and use computer vision to analyse in-store cameras. Real-time information is available. What if you would put wheels under the racks and displays? You could restructure the store every day to see what the ultimate layout is.
Home Insurance as a Service
Take a normal home insurance contract and you see a list of standard questions: Do you have a fire alarm? Any valuable content? Etc. Questions take months to fine-tune and change.
What if you could adapt home insurance costs based on how you use and maintain your house? You don’t only check if a house has a fire alarm but you can increase the monthly premium if you don’t replace you fire detector’s batteries immediately. You can even check if you always put on the burglar alarm when you leave or only from time to time. Your insurance premium can be lowered if you hardly cook but increment if you always eat out. Intelligent doors and security cameras can do more than signal a potential breach. Via face recognition known burglars can be spotted as soon as they enter the premise and even before they reach the front door. Insurance can take risky behaviour into consideration as well as reward the opposite. So families that leave the cooker unattended or use a lot of candles would pay a higher premium.
Cargo transport and logistics
What about self-driven lorries or container ships? Gamification of parcel delivery services in which fast delivery makes you gain points but driving recklessly looses points. Uber for small delivery vans. Crowd-sourcing container cargo and using uber style collection and distribution services. High-frequency trading based on container ships or trucks delivering late.
This is only the beginning
“TheFacebook.com” and “Angry Bird” IoT apps have not been invented yet. The world is waiting for disruptive companies to create unfair competitive advantages because they understand the new capabilities IoT brings. Who would you rather work for, the disruptor or the disrupted?
The energy markets in Spain, Belgium, the UK, etc. are using government money to deploy smart metres in peoples homes. Ridiculous amounts of up to a thousand Euros are budgeted for smart metres and their installation at people’s home. The worst part is that most suggested smart metres are incredibly dumb. Tax payers will have to pay billions either via taxes or spread over the next years in their energy bills, to have smart metres put in place that are already outdated before they get unboxed. Non of the proposed smart metres I have seen is impressive in specification, has an app store, can be software defined, etc. Doubts arise about proprietary solutions being as secure as they are promised to be.
An alternative approach?
Why don’t energy companies organise a competition in which anybody can design a smart metre. Energy companies should set out a budget for a good smart metre. However via a crowd funding campaign among their customers, you and me would be able to select which of the designs we want in our home and if we want to pay extra to get a more advanced model. Smart metre protocols aren’t nuclear science so anybody coming with an argument of standardisation is going to loose out against the alternative of competition lowering prices and increasing innovation. Smart metres ideally have a removable compute and storage part because what now seems advanced will be stone age in 5 years. App and app stores will allow households to redefine what smart means for them and create a new economy for entrepreneurs searching for the “smartest” angry bird app for an electricity metre.
The truth is that very few telecom operators have ever put a modem or set top box in people’s home that has impressed their customers. The problem now is that energy companies think they can do a better job and will keep tax payers hostage for 10 years. Remember nobody remembers the price of a bargain when the thing is not doing what it promised on the box and most smart metres are not what you and I would call smart…
Bloomberg and Gartner finally are seeing what the rest of the IT industry already knew for some years, Oracle software is no longer attractive for new businesses. There is no amount of cloud washing that Oracle can do to hide the fact that open source is good enough now and often better than costly Oracle solutions. Smart companies have realized that Oracle databases are very complex to use and maintain and that they are not build for the webscale and horizontal cloud scale-out era. What is Oracle going to do next? It is going to do what it does best in those cases. When it sees that customers no longer buy its products, it’s buys its competitors. Expect Oracle to buy Datastax, Cloudera and/or Databricks. Afterwards it will do some more IoT washing until that does not work any longer and a competitor needs to be bought. The IT industry tends to become repetitive after some time…
Hardware is a volume business in which only a few can make real money. Either through royalties, e.g. ARM, or market dominance, e.g. Intel PCs. Samsung, HP, Dell, Lenovo, Huawei, Xiaomi, Asus, Acer, etc. ‘s hardware businesses are all in a very dangerous position. Their products no longer are differentiated through hardware features. Price reductions have become a race to the bottom in which there will be no winners. Google controls their key money maker.
IoT presents a new beginning in which hardware, software, services, cloud, data, etc. can become the secret ingredients that will make new billions for some. However I have had access to the IoT strategies of several and although I can not publicly share them, several big names are not doing great. In IoT you can do two things, you can try to become the new Apple or become a magnet for others to make money on top of your solution. Too many think they have Apple qualities but the truth is they don’t. If you are a senior executive at a big hardware empire that is starting to cripple, why don’t you reach out and discuss potential alternative strategies.
Today Intel in their keynote speech announced that Snappy Ubuntu Core will be available for Intel based IoT gateways. The announcement has been in the making for several months now so it is good to see that the world finally can know that Snappy Apps and Snappy Stores for smart devices are the future.
What does this mean?
Due to NDAs any future products can not be mentioned publicly. However it is clear that Snappy Ubuntu Core offers a secure, easy and innovative way to define what enterprises and consumers can do on top of IoT gateways. Expect things to become cheaper, faster and smaller but after 50 years of Morse Law that has become an industry rule. The fact that the largest processor company in the world thinks that open source operating systems with apps and app stores are the future for their IoT product family should give a clear indication to the market…
Frugal Innovation is about designing new products with less instead of more. Products that cost a fraction of current solutions and yet solve critical problems. IoT needs Frugal Innovation if it wants to live up to its promise of connecting billions of devices and helping people improve their lives.
Frugal Health Innovation
Probably the area where most Frugal Innovation is needed is the healthcare sector. More and more countries have an aging problem. Social security schemes for retirement are becoming unreliable in even the most advanced countries. Instead of excellent but expensive healthcare solutions for the elite we need cheap good enough for the masses. Fugal IoT Innovation should focus on driving down the cost of equipment, avoiding people from having to go to a doctor or hospital via remote healthcare or better prevention. We need a Bluetooth stethoscope for under $20 that can be used in any remote area.
Fugal IoT Innovation in energy
The other critical area where the world needs better and cheaper solutions is energy. Forget $3000 home batteries. Ideally cheap energy harvesting. Building a wind turbine for $50 from ready available components. Reducing the cost of solar. A way to build your own solar panels for $50-100 to boil water would eliminate a lot of diseases and avoid expensive wood being burned and the associated deforestation.
Fugal Innovation is going to make more money because it has the potential to change habits of a lot larger population…
From December until now I have been inside the IoT tornado. In December we did not have a product. Half January we had a first beta with 25 partners. In February big names joined and Forbes already spoke of industry-wide adoption. In March the cheapest x86 became the smartest switch that has the potential to solve the 4 biggest telecom industry problems on Mobile World Congress. April saw a Broadcom-powered Celestica switch from Penguin Computing become the smartest switch, the first fridge with apps from GE, the first drone with apps, a Patton VoIP gateway, industrial gateways, Netcom CPEs, Acer smart home hub, ARM mbed OS integration, etc. on IoT World. Forbes and others loved it. This week GE showed me the future of smart home appliances and I was amazed. I can tell you that does not happen every day. Next week is Computex in Taiwan. Acer is there again. Dell will present their first Industrial IoT gateway powered by Snappy Ubuntu Core. If everything goes according to plan there will be a market changing announcement.
All this would not have been possible without an excellent team of Ubuntu Core engineers, product managers, sales teams, BD teams, top management, etc. and last but not least awesome partners that time after time surprised me. Many thanks to all of them.
When I read Inside the Tornado, I could never have imagined it really feels like being inside a tornado. The secret sauce of success = 99% last minute transpiration + some of the most innovative brains + 1% luck. Forget long term business cases and innovation through planning. Listen to problems in the market. Understand cutting edge innovations. Strategically combine them all. Do instead of plan, break, learn, redo, break, learn, redo, get something working, feedback, restart the process. Imagination from a desk is a limitation, it keeps you inside your world of comfort. Show, tell a story, get feedback, update, show again, etc.
Changing industries is hard work but has become easier than ever. Hyper-innovation is fast dividing the world into leaders/innovators and followers/victims. As a victim you are at the mercy of the innovator. I hope you prefer to be in control of your destiny so if you are not an innovator yet, then you should become a dinovator. GE FirstBuild showed me this week that it is possible to go from follower to dinovator to super innovator. What are you waiting for?