(R)evolution of IoT
Three crucial challenges when it comes to IoT for products and organizations.
Internet of Things (IoT), in all its hype and glory, has some significant impacts to organizational structures and business models. Impacts that might become troublesome, if not critical, in order to succeed in a market with technologies that evolves faster than our own ability to adapt. More technology companies adopt concepts of connected products conveying them as smart, although convenient might be a better word. My Philips Hue connected light bulb is not smart, it’s convenient. My home is not smart, it’s damn convenient.
Anyhow, as products evolve into connected products and beyond, organizations are forced into a seemingly unintentional revolution. The connected products are part of a grander scheme of the technological evolution, as described in a captivating way by Michael E. Porter and James E. Heppelmann in the HBR article from 2014, “How Smart, Connected Products Are Transforming Competition”.
Historically, products have gone from simple and stupid, to advanced, connected smart products. We are already far into the evolution of IoT products and we have started to move into the final phase, System of Systems. This is where all products and systems are interconnected. This is where competition change and companies have successfully moved toward value networks instead of the traditional value chain. A product allows interactions through smart assistants (Alexa, Siri etc.), collects data (weather apps, various open data hubs), and responds through third-party peripheral actuators (Philips Hue, Sonos speakers, HA motorized devices etc.). The product could be your coffee- or washing machine, it could be your car or even your kid’s toys. It’s the end stop for a product and, as more intelligence is put into the device itself, the less dependency of the cloud is required. Often referred to as edge computing, which becomes a crucial part of System of Systems.
Airthings is a great Norwegian example of how a simple thing as a radon sensor has evolved into a smart connected product, by adopting capable wireless microcontrollers and create an ecosystem of value creation for consumers. To that ecosystem, another great and (not always) obvious example of edge computing is added (and is probably in your hands right now); the smartphone. Beyond Airthings, The smartphone is today packed with sensors and can easily run face recognition, augment the world and run complex 3D rendering in real-time. What do you think it can do in ten years from now?
The technical (r)evolution requires significant changes in how we think about products. Here are three crucial challenges when it comes to IoT for products and organizations:
1. It’s mostly about software
The products become more complicated for each phase, and most of the complexity is resolved in software. Specialized software knowledge is required on a wide range of systems, ranging from embedded programming to smartphone apps and cloud integration. The hardware in the products become more software oriented with each iteration, to allow flexibility and scalability. In the end, the device will be more or less completely software configurable and field upgradable. Even the radio part is software configurable, which means that a device could support various wireless standards such as Wifi, Bluetooth, ZigBee or Thread by a simple over-the-air upgrade.
2. Organisational changes.
With a connected product, the software needs to be interoperable towards all operating systems and backend services, over time. Software isn’t written once for a release, it’s a continuous delivery based on real-time intelligence from the field. This means that software resources need to be tied to business operations and IT in an organised way, where DevOps has become a bit of a hyped concept to describe the needs. It’s about removing internal boundaries.
3. Business model disruption.
Connected products have a huge benefit with the enablement of wireless field updates, to add new features or patch security flaws. However, suddenly you get operational expenses instead of capital expenses. How do you sell a device with a margin enough to maintain further development and maintenance? The concept of Product-As-A-Service is becoming a more relevant model across industries; it’s been used in the industrial sector for a while now, but now we see it happening in the consumer market as well. Instead of a fixed one-time purchase, a subscription model is used. Another consideration is to set an ”expiration date”, a date when the consumer shouldn’t expect more updates.
These challenges have a huge impact on the way organisations and companies operate and can be catastrophic if not handled correctly. Fortunately, startups and corporations alike are becoming more aware of these disruptions and making decisions to adapt. Hire rock solid SW engineers, remove internal boundaries, continuously improve existing products and pivot from capital to operational expenses. It’s also about time to add expiration dates to products!
This also impacts the consumers and what we should expect out of connected devices. We are going to get more of these and, at some point, be dependent on them. As we enter System of Systems, less human involvement will be apparent, albeit life should become more convenient. Else we’ve failed.
