Kiss the Competition Goodbye with Things & Services

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AB79B221CF4E4F71BBDC4FDA8A810834When Kevin Ashton, director of the MIT Auto-ID Institute, in 1999 deployed his RFID solution at Procter & Gamble, calling it the Internet of Things, he could only have dreamed of what an adolescent Internet of Things and Services – the Bosch perspective – might economically mean. From 2015 on, trillions of dollars are projected by McKinsey and Harbor Research, among many others. Unspecific names denote the impact of digital things and services, ranging from the Internet of Everything (Cisco) to the Industrial Internet (General Electric), the Internet of Sensors and Actuators (Vint Cerf, Google) or the Web of the World (Marc Davis, Microsoft). Germans speak of Industrie 4.0 as the next wave after mechanization, electrification and information technology. This is Bill Buxton’s “long nose of innovation” in action and that has nothing to do with lies. The takeoff of technological innovation always lasts a few decades, as we know from the work of Carlota Perez.

This post was written with Rick Bouter

Tipping point 2015
We have one year to go before reaching 2015, concluding the installation phase of “Being Digital,” the title of Nicholas Negroponte’s 1995 book that says it all: “computing is not about computers anymore, it’s about living”. The year 2015 has been identified as tipping point in the development of connected things and services. An unsuspicious ICT Industry Study, belonging to a set of 21 explorations, published in the spring of 2012 by The Industrial College of the Armed Forces at the U.S. National Defense University places the Internet of Things on the following timeline:

0-18 months from spring 2012 on – this period now lies behind us
The focus is on mobile computing, and we will see an explosion of smart phones and tablets. Privacy and security remain tricky issues, especially in the context of cyber security and legislation. This has proven to be correct, including all commotion around covert operations by secret services like the NSA.

18-36 months from spring 2012 on – that is the coming months
Internet connectivity is spreading fast across the economy. Already in 2008, there were more digital things than people connected to the internet. Mobile devices assume the function of intermediary between the internet and the expanding development of things and services.

3-5 years after spring 2012 – from 2015 onward
The development of the Internet of Things will accelerate. In particular autonomous machine-to-machine communication is assumed to evolve rapidly. The so-called Smart Grid (efficient energy supply via feedback loops) will further develop.

SMAC: Social, Mobile, Analytics and Cloud
From a business perspective it’s all about persuading consumers to buy services and things. Digital arousal – very persistent and cheap – is an effective means to excite and timely satisfy customers. It can however be argued that a well-chosen mix of calmness – Weiser’s Calm Computing – and persuasiveness yields the most durable customer satisfaction. Embracing your customers that way involves SMAC.

A proper combination of Social, Mobile, Analytics and Cloud intertwines things and services for a splendid customer experience. It’s all a matter of what Michael Treacy and Fred Wiersema in their 1997 book “The Discipline of Market Leaders” brought under the common denominators of customer intimacy, operational excellence and product leadership. The authors advised executives to focus and choose, but in modern digital times there is no choice. Disciplined market leaders do all three and operate on the basis of SMAC. Social is a dominant digital force since 2004: Web 2.0, Facebook; Mobile from 2007 on: touch devices, apps, smartphone-on-wheels; Analytics effectively from 2010 on, since the first international workshop on MapReduce and its applications; and Cloud from 2006 on when Amazon Web Services were launched.

The next Big Thing
We are watching a historic necessity unfold. Services companies continue to extend the customer journey with products while product brands add services to optimize customer intimacy. Digital does the trick and often sensors and smartphone apps are involved to gather and deliver information and functionality. Nissan has a special smartwatch for car functions, Philips now sells the Hue personal wireless lighting system, insurers offer personalized pricing based on driving behaviour, and energy companies let customers profit from smart metering. Microsoft and Nokia specialize in devices and services, from Lumia Windows phones and navigation to XBOX Music and SmartGlass. ParkMe is the largest real-time car parker in the United States delivering physical space through digital information.

One of the nicest examples of how a cross-industry ecosystem of digital things and services could function is the Microsoft HealthVault vision. Motorola makes the case for password pills, adding swallowables to wearables like Google Glass. And Intel has announced its energy-efficient Quark microprocessor line which is especially suited for wearable computing.

After the smartphone and tablet explosion, mashups of intelligent things and services will define the next stage of mankind Being Digital. The year 2020 will see autonomously driving cars, hydrogen powered energy-efficient vehicles and devices, and billions of people will have entered a truly global economy. Today, we are watching the enthusiastic uptake by solution builders of off-the-shelf sensor hardware and software from companies like Arduino, Libelium and Raspberry Pi. Taking everything together we have enough proof that the ongoing development of digital things and services is the next Big Thing in lifestyle computing.

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