Monday, March 16, 2015

Observations from Mobile World Congress 2015

I have just returned from a very interesting and jammed-packed week at Mobile World Congress 2015 in Barcelona.  A record 93,000 plus people are estimated to have attended this year’s premier technology festival.  Much has changed in the industry over the last year since I reported my observations of MWC 2014.  However, what is most remarkable is how the boundaries of mobility continue to expand and morph – everything now seems to be mobile?  As such, the show offers a fascinating glimpse into the future of technology and the major social and business shifts that we can expect in the next few years.
The following are my personal observations and extrapolations from the show, based on my conversations with operators, customer meetings, analysts, and colleagues, as well as from simply walking the show floor.

  1. 5G – The Next New Technology What is a technology show without a shiny new technology? Despite the fact that less than 5 per cent of global subscribers have adopted the previous new technology (4G), and over half of mobile users are still back on the second generation (2G) technology, we are now entering the fifth generation of mobile technology – 5G. The remarkable thing though is that no one really knows what 5G is. There are no technical standards or industry agreements on the definition of 5G. However, every major vendor is now “5G ready” and promoting their 5G solutions. And mobile operators like KT and SKT in South Korea are aggressively promoting their pending 5G deployments.
  2. IoT – The Year’s Hottest Three Letter Acronym These 3 letters – standing for the “Internet of Things” – were everywhere. They were on the signs of practically every booth and on the tip of everyone’s tongue. No doubt, the ability to connect sensors, devices and “things” to the Internet is the next wave of mobile growth and presents tremendous opportunities for technology vendors to sell new products and services. A number of key partnerships were announced and some very interesting and compelling industrial IoT case studies were promoted. The mobile operators shouted out their relevance in IoT by displaying their platforms, capabilities and lighthouse customer engagements.
  3. Smart Phone Wars Samsung won the unofficial market launch of the show with its slickly executed unveiling of the new S6. This stunning new device is Samsung’s attempt to get back into the game – trying to recover some of the ground lost to the new iPhone 6 and to firmly establish itself as the Android leader. While many other manufacturers launched new smartphones, Samsung was by far the most talked about brand at MWC. In the continuing saga of the smart phone wars, it looks like we might be back to a 2 player game again for a while?
  4. Building the New MobileFor those of you who follow me, you will know that I have long been a proponent of a “Wi-Fi Max-Mobile Min” strategy to create a new mobile service.   With the near ubiquity of Wi-Fi enabled devices, Wi-Fi access in homes and offices and the growth of public Wi-Fi, there is an opportunity to create a new type of mobile service running largely over Wi-Fi. While there have been a number of smaller, niche players (e.g., Republic Wireless, Scratch), it wasn’t until Google announced that they were getting into the game that it started to get serious. Sundar Pichai of Google gave an unsettling (at least for the traditional MNOs) keynote describing how Google’s MVNO would be primarily based on Wi-Fi, and when that was absent it would select the best, and cheapest, cellular coverage from a number of the big mobile providers.
  5. The Connected Car Show At times you could be forgiven for thinking that you had wandered into the auto show in Geneva or Detroit instead of MWC. There were cars everywhere. The industry sees these as “smart phones on wheels.’ Operators, such as AT&T were crowing about their big deal to connect all new Audis. Auto manufactures, such as Ford, were demonstrating the cool things that you could do with their connected cars. And for some reason, even exhibitors like Visa had cars at their booths. These were not just any cars – they were Porches, Audis, Mercedes, Maserati’s and every other high-end auto you can imagine.   Fancy cars are now the standard “eye candy” at big technology shows.
  6. Virtual Reality Samsung demonstrated a very cool technology for adapting one of their Galaxy Note 4’s or the new S6 into a virtual reality device. Not only does VR make games incredibly cool, but it has lots of applications to industry, enhancing solutions and business processes. HTC is working on a similar VR adaptor for its mobile devices. Several exhibitors were also using virtual reality devices to enhance the impact of their messaging. As virtual reality becomes integrated with cost-effective, and near ubiquitous smart phones, we can expect it to have a big impact on re-shaping many businesses – far beyond the gaming world.
  7. Virtualization Reality — Virtualization and the cloud have finally hit the core mobile network elements. Not only will this make it less expensive for operators to build networks, but will provide them with much greater flexibility and responsiveness and allow the network to extend well beyond the boundaries of the traditional mobile network.   This is the year that the promise finally started to become a reality. Mobile operators, such as Telefonica, China Mobile and NTT DoCoMo, announced fully operational NFV (Network Functions Virtualization) deployments. AT&T reiterated its desire to move 75 percent of its network to a cloud architecture by 2020.
  8. Making Wearables Wearable There were 53 wearable devices on display at the show – 10 of which had their own SIMs to connect directly to the mobile network. The majority of these were smart watches and fitness trackers. The challenge, however, seems to be getting people besides device geeks to wear these. Huawei made a very interesting debut in this category with a high-end watch with a round-faced classic design. It looked like something that even James Bond might wear. And, although Apple was nowhere to be seen, rumors (and subsequent launch) of its new Apple Watch presented additional hope that wearables might in fact become wearable.
  9. Mobile Monetization – An Industry on the Edge — At one time, service providers were the kings of the show. They are now just one of the participants in the massive and rapidly changing mobile industry. The decline in voice traffic, loss of messaging and competition to their data business from over the top providers and alternative access networks such as Wi-Fi, means that they desperately need to find new ways to make money. Most of the world’s major mobile operators now have their own large and prominently placed booths on the show floor. They are proudly displaying the latest business solutions, cloud services, gaming, IoT and other innovative mobile offerings that they have to sell. They are hoping that these new revenue-generating opportunities will move them beyond merely connectivity providers and deliver the next wave of monetization opportunities.
  10. The Battle for the Great Indoors — Changes in devices, applications and social behavior are re-defining mobility from an on-the-go activity to a more nomadic activity, which takes place largely indoors. Traditional macro networks have a tough time penetrating buildings and reaching indoors. Hence operators are struggling to provide 5 bar coverage in homes, offices and public spaces. Traditional mobile technology vendors are now showcasing their small cell, Wi-Fi and DAS solutions as the answer to this challenge of lighting up the indoors. At one time, these solutions were relegated to the back corner, but they are increasingly becoming center stage as a solution to this new and growing problem. Not to mention, they offer an attractive new revenue opportunity for traditional macro network vendors.
  11. Selfie Journalism – TV Production in the Palm of Your Hand – It was truly amazing to watch journalists reporting on the show holding their smartphones at arms-length in one hand and an attached professional-grade microphone in the other. In the past crews of cameramen and soundmen would have been needed to produce professional quality reporting from remote locations. The mobile revolution has created “selfie-journalism”, replacing these crews with one reporter, a smartphone and some clever software. The BBC did an interesting story on how they filmed, edited and produced their coverage of MWC entirely on mobile devices.
  12. Mobile Payments – This May Be The Year? — The last point that I always seem to make on these reviews of MWC is on mobile payments. Once again, mobile payment solutions from banks, credit-card companies, MNOs and other providers were all competing to create a wallet-less world. However, unlike the promises of past shows, this may be the year that mobile payments finally take-off. With the launch of Apple Pay earlier this year and the big announcement that Samsung’s new S6 would incorporate technology from their recent acquisition of Loop (making mobile phones work with any existing magnetic card reader) we may finally start to leave our wallets at home.




Wednesday, February 18, 2015

The Mobile Paradox – Why Are There Price Wars in a Time of Plenty?


One of the first lessons that every economics student is taught is “supply and demand” – the fundamental economic principle that price goes up with increased demand.  Yet we are witnessing the opposite to these age old principles in the mobile business.  Despite phenomenal demand for mobility services, the mobile operators that provide these services are engaged in a fierce price war.


Faster, sleeker, and more powerful mobile devices, running countless of applications have transformed businesses and our personal lives.  The insatiable demand for mobile devices and new bandwidth-hungry applications is generating enormous amounts of mobile data. The Cisco Visual Networking Index™ (Cisco VNI™) predicts that these trends will cause global mobile data traffic to increase 11-fold from 2013 to 2018, surpassing 15 exabytes per month by 2018.  Operators continue to invest in leading technologies like LTE, purchase more spectrum, and race to deploy ever more network infrastructure to meet this huge demand. 

In spite of this phenomenal growth and insatiable consumer demand, many MNOs are struggling to profit from this mobile gold rush. Mobile operators are watching as their average revenue per customer (ARPU) flattens or declines. Despite increasing customer appetite for mobile data, minutes of use in their cash-cow voice business are falling off sharply, and usage of text messaging is peaking. In fact, Ovum predicts that 2018 will mark the first year of revenue contraction in the history of the global mobile market. Following four years of less than 1 percent growth between 2012 and 2017, revenues will decline by 1 percent in 2018, ending the year $7.8 billion lower than in 2017.


When other industries, such as the automobiles, hotels, or airlines, face healthy customer demand, they build out more capacity, raise or maintain prices and sell more products, reaping greater profits.  However, the mobile industry doesn’t seem to be like other industries?  This “Mobile Paradox” - huge growth and customer demand, yet significant business and market challenges for MNOs to make money - seems to be unique to the mobile industry. 

Yet given this grim outlook we are witnessing very aggressive price wars in the US, and other markets.  In the US, T-Mobile has significantly disrupted the market by slashing prices, dropping device subsidizes which had tied consumers to their carrier, and most recently, introduced “rollover data” – allowing subscribers to rollover their unused data allocation to the next month.  All of the American operators have been forced to follow T-Mobile’s lead or watch their customers walk out the door.

What gives?

In seeking to understand this paradox and the current price wars, we need to consider three critical characteristics of the industry: 

  1. High Fixed Cost Business – Operators spend billions of dollars to acquire spectrum and deploy far-reaching sophisticated networks to service a large base of subscribers.  Once they have built this expensive asset every new customer that they add contributes significant revenue at a very low marginal cost.  Operators have every incentive to add new customers and to keep the ones that they have to profit from these huge economies of scale.  Most markets are now saturated, with mobile penetration rates of 80 percent and higher.  So, it becomes a zero-sum battle with competitors to steal customers.  While a somewhat blunt instrument with huge long-term profitability implications, T-Mobile has clearly demonstrated that slashing prices is an effective means to fight this battle.
     
  2. Substitutes and Alternatives – While it lacks many of the quality, coverage and features of cellular mobile, Wi-Fi has quickly become an important means to connect devices to the Internet without wires.  Aside from smartphones, most of the important and fast growing mobile devices, such as tablets, eReaders and laptops, are exclusively Wi-Fi enabled.  In fact, smartphones, which we tend to think of as synonymous with the mobile industry, are increasingly accessing Wi-Fi for Internet connectivity.  Our research shows that smartphone users actually connect to the Internet through Wi-Fi over one-half of the time, versus accessing the mobile network.  The Cisco VNI™ study confirms that Wi-Fi will account for 56 percent of all IP traffic in 2017, versus 12 percent from mobile.
     
  3. Value Migration – Mobile operators once controlled all of the value that was created on their networks.  Whether that was voice, messaging or the early media services that they offered (e.g., music, games, ringtones) through their exclusive “walled garden” platforms.  Much of this business is now being lost to substitute over-the-top (OTT) services and to major shifts in usage behaviors. Mobile consumers would rather pay for these OTT services or be subjected to advertising from the likes of Google, Facebook, YouTube, and the App Store, than pay more to mobile operators.

Tuesday, January 27, 2015

Is the Internet of Things the New Dot-Com Era?

Fifteen to twenty years ago we were in the middle of another frothy, technology-hyped revolution -- the Dot-Com era.  Mass adoption of the Internet promised radical changes in business and our everyday life and a new social and economic Utopia.  In those halcyon days, stock prices were on a tear, venture capital money flowed like water, and countless start-ups greedily chased the pot of gold.  Could the most recent technology revolution, the Internet of Things, be another Dot-Com experience?

Like the Dot-Com revolution the Internet of Things is the culmination of radical advances in four core technology pillars: 1) Connectivity (dial-up modems of yesteryear vs. mobile data and high-speed broadband today); 2) Data (the browser vs. big data and analytics); 3) Cloud (CompuServe and AOL vs. cloud storage and computing); and 4) Things (PC computer vs. smart phones, sensors and other machines).  Like the Dot-Com era, technology visionaries and strategists could see that the perfect storm of the disruption in these core technology pillars would herald the dawn of a new revolution in how business was done and society operates.  While everyone could see this new horizon and the benefits that it would bring, no one was really sure of how to get there or where the money would come from.

Businesses saw the value when they connected their businesses and unleashed the value of the Internet.  Customers and employees could now serve themselves, businesses processes were re-designed for a connected world and businesses found new online products and services to offer.  But, it was not a direct path.  Some companies immediately embraced the Dot-Com world, many had false starts and many others took a long time to jump on, or the revolution passed them by completely.  The technology vendors and providers faced similar challenges adapting to the Dot-Com era.  For some, the frothy bubble offered huge new markets.  However, after selling the initial vision and promise the sale became much more complicated and competition started to commoditize products and erode margins.  Customers eventually didn’t just want the technology; they wanted to know the business case, what to do with it, and how to re-design their business to capture the promised new value.

Like all technology revolutions, the path was not a straight line.  We had sock puppets and business models based on the illusive quest for eye-balls, and outrageous promises of new businesses and social upheavals.  But, in the end we got there.  No one today would argue that the Internet has not added immeasurable value to the world and changed our lives forever.  The Internet of Things is similar to where we were two decades ago, at the start of the Dot-Com era.

There are some huge estimates of the value that will be created by the Internet of Things.  While some of these optimistic values may never be realized, like at the dawn of the Dot-Com era, we know that IoT will not only add tremendous value, but will fundamentally change businesses, the economy and ultimately society.  We are already witnessing companies capturing significant new benefits from implementing IoE in their businesses.  For example, GE is using data from sensors in its jet engines to do proactive maintenance, Barcelona is becoming a smart city to save costs and improve the quality of life for its citizens, and many utilities are installing smart meters to remove meter reading costs and better manage local energy usage.  But, we are still very much in the early days of the IoE revolution with many companies knowing that they need to do something but not sure, what or how.  A recent study by Harvard Business Review and Verizon found that less than ten percent of enterprises had deployed IoE initiatives.  And, of that small minority only 56 percent of those had an IoT strategy.  What does that say for the 90 percent of companies who have yet to implement IoT initiatives?  And, like the Dot-Com days the technology vendors and providers have yet to figure out how they will make money.  Nor, is it clear who will win and who will lose in this new technology provider arms-race.
The Dot-Com experience can serve as a useful reference model for how the Internet of Things revolution may unfold.  There is little doubt that the promise of IoT will be realized, and more.  But, we need to heed some of the key lessons of the Dot-Com era to make sure that businesses and vendors alike share those promised benefits:
  1. Ensure that you have a clear and compelling monetization model and a well-developed business case in place for any IoE initiative.
  2. Focus on the use case and how the technology supports it, rather than the other way around.
  3. Recognize that people are a critical component to any successful implementation and ensure that change management is a key component of any program.
  4. Re-design the business (processes, organization and business models) around the IoT initiatives to achieve the promised value.
  5. Technology vendors and providers need to focus on open technologies, flexibility, and new business models and financial arrangements.  They also need to help their customers identify and realize the potential business benefits through consultative selling and services.


 

Monday, January 5, 2015

10 Predictions for the Future of Wi-Fi and Mobility

The close of every year brings startling headlines that herald the continued meteoric rise of mobility.  This past year was no exception.  The 2014 announcement that there are now more mobile subscribers than inhabitants on the planet exemplified the mobile zeitgeist and its importance in our daily lives. 

But, the big mobile news in 2014 was around Wi-Fi.  Wi-Fi continues to blanket the world, with iPass estimating that the number of public hotspots will increase almost 8-fold over the next four years to cover 1 out of every 20 people on the planet.  And, Wi-Fi is becoming more like the mobile cellular experience.  The seamless authentication and experience promised by Hotspot 2.0 is now available, with Time Warner and others announcing last year that they would roll it out across their entire Wi-Fi networks. And, we can now roam to other international Wi-Fi networks, like we do on cellular, with Comcast and Liberty Global, and other providers, announcing global roaming agreements.  And, 2014 saw mobile operators beginning to embrace Wi-Fi in a big way.  T-Mobile USA began shipping wireless routers to provide five bars coverage at home by allowing customers to make calls over Wi-Fi instead of the mobile network.   

Of all the 2014 Wi-Fi activities, perhaps the biggest event was Apple’s announcement that the new iPhone 6 would support Wi-Fi calling (Voice over Wi-Fi).  This technology bombshell indicated that Wi-Fi had truly arrived and should now be considered a true partner and complement to traditional cellular. 

What does 2015, and beyond, have in store for Wi-Fi and mobility?  The following are my ten predictions of what we have to look forward to: 

1.    Wi-Fi will be “almost everywhere” – While we may not find it on mountain tops, in remote locations or along highways, Wi-Fi will be in most places where we spend our lives – homes, schools, work, shopping malls, hospitals, sports facilities, etc. 

2.    Providing Wi-Fi will be a “cost of doing business” – Like providing lighting and heating, customers of retailers, restaurants, sports venues and all other customer-facing organizations will expect Wi-Fi to “just be there”. 

3.    Consumers will expect Wi-Fi to be free, or almost free – The bar has largely been set – with the exception of some “expense account” venues like hotels, customers will expect to have Wi-Fi included as part of the overall service. 

4.    Wi-Fi will become an important part of indoor mobile coverage – As the mobile battle moves indoors, Wi-Fi and Wi-Fi calling will be important ways for mobile operators to enhance their indoor coverage. 

5.    Wi-Fi will be a key access technology for Internet of Things enablement – Due to cost, coverage and bandwidth challenges of mobile cellular, Wi-Fi will be the key connectivity technology for home, business and public IoT deployments. 

6.    Public Wi-Fi will get better – With growing customer demand and expectations, public hot spots will need to upgrade their infrastructure to move beyond the initial “trial” phase of many public deployments. 

7.    Service Providers will be the major builders and operators of Wi-Fi networks – Given the growing complexity and importance of their Wi-Fi networks, many business will want to outsource the deployment and operations to a service provider as a managed service; concurrently allowing SPs to expand their growing Wi-Fi networks. 

8.    Wi-Fi wholesale and roaming agreements – We will see more domestic and globally roaming agreements to create a mobile-like experience.  Wi-Fi network operators will wholesale network capacity, and site locations for licensed small cells, to mobile operators to help them to extend their networks. 

9.    New Wi-Fi Max models – Wi-Fi centric mobile offerings, with cellular fallback, will expand beyond niche providers, such as Scratch Wireless and Republic, to more mainstream landline and cable service providers as their core mobile offering. 

10. “Next Generation Wi-Fi Monetization” – With public Wi-Fi becoming essentially free, businesses will look to new monetization models, like advertising, data analytics and advanced location-based services, to recover Wi-Fi network costs.

Read on Cisco.com

Tuesday, November 25, 2014

How Service Providers Can Become Leaders in the Internet of Everything


Over 50 billion “things” or devices are projected to be connected to the Internet through wired and wireless networks, generating zettabytes of data, all powered by cloud computing.  This Internet of Everything (IoE) will fundamentally transform businesses, generate enormous economic wealth and create immeasurable social value.    

We are discovering that successful IoE implementations require a solid technical and business platform into which different vertical solutions can be easily plugged to efficiently and effectively achieve the promised business, economic and social benefits.  The cornerstone of this IoE platform includes a robust connectivity and technology infrastructure, operational and management services, to accommodate a range of vertical and horizontal solutions.  Details of this IoE platform are outlined in Buildingthe Platform for the Internet of Everything.

The ideal IoE platform leverages common requirements across all vertical solutions to create a scalable, “build once – deploy many”, technical and business architecture. But, who is going to build and deliverable this scalable platform? 

I believe that service providers are well positioned to lead the development and implementation of the IoE platform.  Not only do they have years of experience building and running networks, operations and customer services, but many SPs now offer extensive cloud  and systems integration services.  Not to mention, their strong brands, vertical sales and solutions and a history of complex technical implementations. 

Service providers need to consider their strategic options for developing and operating the IoE platform.  Although it varies by provider, the strategic options build from an inherent, more technical, strength for SPs at the bottom of the platform, to less core capabilities in the services and management layers at the top.  A SP’s strategic options are:

1.    Core Network Connection – extension of the core networking business.

2.    Closely Aligned Network Access, Technology Platform – leveraging capabilities in deploying and operating network access and cloud services.

3.    Stretch Vertical and Horizontal Solutions, Shared Operations Platform – likely partnering/acquiring to create IoE solutions; extending internal NOC and customer care operations as a service.

4.    New Areas Professional Services, Program Management – while some SPs have some SI capabilities most will need to partner or organically grow consulting and services capabilities.

5.    Monetization – extension and growth of existing capabilities in advertising and data analytics to create vertical-specific monetization opportunities.

Our detailed analysis of the revenue potential for providing an IoE platform for Smart Cities (SmartCities Are a $7.5 Billion Annual Opportunity for Technology Providers) provides a good example of the value that can be created by providing the technical and operational requirements for successful IoE deployments.  Roughly one-half of the platform revenues come from the core or closely aligned areas – areas not very distant from a service provider’s current business.

We are starting to see SPs around the world chasing the significant IoE platform opportunity.  However, they are typically focused on their core business of providing network connectivity.  The big opportunity exists to move up the IoE platform stack to build and deliver new sources of value.  Service providers should start by expanding beyond connectivity to the closely aligned areas of network access and technology platform.  From there explore stretch and new areas by building off existing capabilities, seeking partners or considering select acquisitions.  In parallel, investigate areas where you can create new monetization opportunities in select verticals leveraging existing and new business capabilities.

Building and delivering a scalable IoE platform that can be deployed across multiple vertical solutions provides a compelling business case for SPs to capture a significant portion of the $20 trillion that IDC estimates will be spent over the next three years to realize the promise of the Internet of Everything. 

Service providers are well placed to take a leadership role as the providers of the IoE platform.  But, they better act fast.  Technology vendors, services companies, start-ups and niche players are all circling the waters to see how they can grab a piece of this tantalizing $20 trillion business.

Read the blog on Cisco.com

Monday, November 3, 2014

Building the Platform for the Internet of Everything


We are embarking on a new technological journey that will fundamentally change forever the economy, society and the way that we live.  Wired magazine described a new era where “the most mundane items in our lives can talk wirelessly among themselves, performing tasks on command, giving us data we’ve never had before.”  The Internet of Everything (IoE) is a world where up to 50 billion things (or devices) will be connected to the Internet by 2020; or, the equivalent of 6 devices for every person on the planet.

Businesses are beginning to completely re-design their processes, operations and business models to benefit from this new era.  We are already starting to see the emergence of smart cities, connected utilities, connected railways, connected factories, connected cars, and even connected mines, to name but a few.  All industries are looking to IoE as a breakthrough technology to help them optimize their business, enter new markets and enhance their relationship with their customers.  This is why industry analysts, like IDC, estimate that businesses will spend up to $20 trillion over the next three years to realize the promise of the Internet of Everything. 

But, The Internet of Things is More Than Just “Things”.  As I described in this recent article, the Internet of Things is really a short-hand for the four technology pillars (mobility, cloud, big data and things), wrapped in security, that are forging a revolutionary new, and revolutionary, connected world.  Successful IoE implementations don’t happen in isolation or independently.  We are discovering that successful implementations require a technical and business platform into which different solutions can be easily plugged to efficiently and effectively achieve the promised business benefits.  The cornerstones of this IoE platform include a robust connectivity and technology infrastructure, operational and management services and a range of vertical and horizontal solutions. 

In our experience, all IoE implementations require all of these technical and business elements to be successful.  Our vision is that effective IoE deployments will build an IoE platform that can be extended across the business, or even entire industries, to deliver a range of unique, value-added IoE solutions.


Starting from the bottom, the layers comprise:
 
1.    Network Connection – connecting all of the solutions, data and applications through fiber backhaul or licensed cellular.

2.    Network Access – a managed Wi-Fi, or other unlicensed wireless network, to connect all of the sensors and applications.

3.    Technology Platform – a platform to allow new devices and solutions to readily and securely “plug and play” into the overall architecture, and to connect to cloud storage and compute services.

4.    Vertical and Horizontal Solutions – the combination of devices and applications that deliver the unique solutions for different vertical and horizontal industry segments/.

5.    Platform Monetization – in some verticals, like smart cities and B2C, opportunities exist to leverage the platform and network to create new sources of revenue.

6.    Shared Operating Platform – a shared platform to consolidate the management, customer care and service issues across all of the solutions.

7.    Professional Services – services to support areas such as systems integration, planning and design.

8.    Program Leadership – services to program manage the entire implementation, operations and partner ecosystem. 

Successfully deploying and capturing the tremendous potential benefits of IoE is not just about cool things and applications.  A comprehensive technical, operations and management IoE platform is required to turn vision and promise into reality. 

Read the blog on Cisco.com

Monday, October 13, 2014

The Internet of Things is More Than Just “Things”

It has been 15 years ago since Kevin Ashton popularized the term the Internet of Things.  How could we have known then what that would come to mean and the huge impact that it would have on our lives?  Cisco projects that 50 Billion things (or devices) will be connected to the Internet by 2020; or, the equivalent of 6 devices for every person on the planet. This exponential growth of connected devices is fundamentally impacting both society and the economy—changing our lives forever.

However, with all of our focus and media attention on the Internet of Things, we are really missing the fundamental technology revolutions that are re-shaping our world.  Radical advances in processing, storage, wireless technologies and new ways of delivering technology are reshaping our world - all at a much faster speed and drastically reduced price. 

In my view, the Internet of Things is really a short-hand for the four technology pillars that are shaping a revolutionary new, connected world.

1.    Wireless – High speed, licensed and unlicensed, networks mean that people and devices no longer need to be tethered by a wire.  We can now collect and transmit information from things that are moving (e.g., automobiles, trains); things that are remote (e.g., oil wells, agriculture), or things that are too costly to wire up (e.g., city parking spots). 

2.    Big Data – The billions of applications, sensors and devices connected to the Internet will create zettabytes of data (1021 bytes, or 1 billion terabytes).  But, while the volume of data is just astounding, what is truly revolutionary is the ability to put that data to work.  Advanced data analytics is now capable of managing vast amounts of disparate data to reveal amazing relationships and insights, and drastically improve our predictive capabilities.  As a result, machines will be able to intelligently interact with machines, with limited, or no human intervention.
 
3.    Cloud – Not only does the cloud provide an efficient and cost-effective means to process and store all of the data created by the IoT, but it is essentially the “glue” that holds the Internet of Things together.  Cloud computing allows all of the sensors to communicate with the applications, and the control and monitor devices, across multiple networks, anytime and anywhere. 

4.    Devices (Things)Of course, the devices, or things, in the Internet of Things are important.  Inexpensive devices and sensors that focus on specific tasks (e.g., temperature, carbon monoxide levels, heart rate) can now be made that are also economical on power consumption, or can tap into alternative sources of power.  And, they are all connected – to a network, the cloud and each other.  Through compelling and easy to use applications, we can access and control these devices through powerful, personal devices such as smartphones, tablets and PCs.

None of these technologies can ever truly revolutionize the world without another key technology – a fifth technology pillar:
5.    Security – The recent high profile Internet security breaches and data thefts highlighted in the media reinforce the importance of security and guaranteeing user online privacy.  Security is paramount to the growth and adoption of IoE.  We have to be able to assure users that their connected car and home will not be taken over by hackers.  Or, that the extremely personal data collected from medical devices is safe from prying eyes.  Businesses and cities will need similar assurances that the sensors that they have deployed and the data that they generate are 100 percent secure.
So, next time you see, or hear, the Internet of Things don’t think of it in the literal sense.  Rather, think of it as a short-hand for the Four + One technology pillars that are truly changing the world.  It is the radical innovation and combination of these five critical technologies that are really delivering the promise of the Internet of Things – reshaping businesses, economies and the way that we work, live, play, and learn.

Read the blog on Cisco.com