The Tyler Group Building a Business Around the Internet of Things
You can’t escape the internet of things.
Multinational conglomerates, old-line manufacturers and Silicon Valley startups are all busy developing applications that will let people reserve street parking, monitor stresses on steel beams, and in general gaining insight into the real world.
LEDs and lighting in particular will play a key role, because lighting already forms a ubiquitous grid around us. You can’t attend an event without someone telling you about their idea for bringing intelligence to the inanimate world.
But not every good idea will lead to a good business plan. Like the PC boom in the early '80s and the dot-com boom of the late '90s, the Cambrian explosion of ideas and companies will be followed by a harsh consolidation. Sure, Pets.com looks silly now, but respected VCs put over $50 million into the company.
We’re still in the early days of the internet for the inanimate, a few founding principles are already emerging.
The internet of things is more about distributed intelligence than networking
When most people hear the term “internet of things,” they get a mental image of household appliances or automotive components sending a continuous stream of text messages to each other or to a centralized support center.
Unfortunately, that’s also the wrong image. Instead, lights, air conditioners and other appliances will largely make their own decisions: embedded intelligence will effectively allow objects to act autonomously or within selected parameters. The role of networking and messaging, meanwhile, will be minimized. Intelligent devices will send messages when they might need outside help -- like an oil change -- or when they need to offload data stored in local memory, but they won’t be giving up-to-the-minute reports.
Why? The vast amounts of information generated will far exceed the ability or desire to process it economically in real time. Office buildings -- and all of the copy machines, lamps, power strips and other items plugged into the local electrical system -- will generate gigabytes of information on a daily basis. Building a network, and a back-end system, to accommodate the flow of information will quickly try the patience of both businesses and consumers.
A distributed intelligence approach also allows manufacturers and developers to better harness the power of Moore’s law. Chips get better and cheaper all the time. Networks are delicate creatures with multiple interdependencies.
With the internet and cloud computing, it can be easy to overlook the importance of distributed intelligence. Most of the time, you seem to be using your laptop to access a server located somewhere else. But look at how many times a day you use a “local” application like PowerPoint or word processing. Distributed intelligence is still a powerful force.
It's about big data and new data
"Big data" refers to both the staggering amounts of information generated by today’s computer systems and the software algorithms and databases designed to handle it.
"New data" refers to the information we know exists, but currently don’t track. A store might count the number of customers that walk through its doors every day, but it likely doesn’t know the split between females and males, or what percentage belong to the valuable 18-to-35 demographic. Why do most of the customers stop at the endcap at the end of the second row, but blow past the display on Aisle 5? The conference rooms on the fifth floor are always booked, but it’s unknown whether they are truly overbooked or whether many room reservations go unused. New data applications will help determine the answer before you invest in more office space.
The applications span the imagination. Back in 2001, when the internet of things was still known as "pervasive computing," Intel funded projects to create systems for monitoring the movements of tectonic plates and analyzing animal migration unobtrusively. Another idea was to create flame-resistant sensors that could be dropped from planes to track the intensity and direction of forest fires.
The two forms of data are related, but different. With new data, the crucial question is whether the information being gathered is interesting. Information like this that subjects involuntarily provide is often far more laden with insight than the answers consumers provide to surveys or direct questions. The Swiffer was invented by people who spent hours watching other people dust and mop. Still, companies have to understand why their clients want it in the first place. With big data, the question is whether you’re analyzing it correctly. To succeed, you need both.
Everything needs to be reliable
No one wants to change the batteries on a sensor embedded in the pavement. Or inside a yogurt boiler. Even equipment in less harsh environments will have to function fairly flawlessly for end-users to harvest the economic benefit from newfound intelligence. Manufacturers and developers will also have to pay particular attention to compatibility and ease of installation: if things aren’t easy to install and adopt, they might as well be broken from a customer’s perspective.
Easy as this might sound, many companies fail at it. “Intelligent” building management systems have failed in the past because the headaches surrounding management and commissioning far outweighed the benefit. Security and privacy concerns likewise can become potential hazards for anyone in this market. Word-of-mouth will likely make or break many initiatives.
Will there be skeptics? Absolutely. Every time a company or product fumbles, critics will harp on the folly of intelligent objects. But there were also plenty of skeptics about GPS units in cars. No one would watch TV shows on small screens, many predicted. Tablets flopped more than once before 2010. We know this data is valuable. The question now is who will create the system that is the most compelling for harvesting it.
Rich Green is the senior vice president of products and technology at Enlighted, an advanced lighting control company. Rich is an operational executive who has been at the helm of some of the computer industry’s most innovative technologies and business models in enterprise software and networking and has accumulated a great deal of insight into how those models can be extended to serve high-performance buildings and the internet of things.
Building a Business Around the Internet of Things