September 3, 2013

Why Collaboration Will Replace ‘Zero Sum Game’ for Internet of Things Success

Partner Post by David Stephenson, author of SmartStuff: An Introduction to the Internet of Things and consultant on the Internet of Things as Stephenson Strategies.

In a recent post, Chris Rezendes, president of INEX Advisors, wrote that there’s a new “flexible business design” paradigm emerging, “where the end of my company and the beginning of yours can be hard for outsiders to pin down. Zero sum game is fading…”

I was reminded what a dramatic shift is underway to that new model by a new book, Topsy: The Startling Story of the Crooked Tailed Elephant, P.T. Barnum, and the American Wizard, Thomas Edison. The focal point was a bizarre event 110 years ago this summer, when Thomas A. Edison, in an attempt to demonstrate the superiority of his Alternating Current (vs. Westinghouse’s Direct Current), executed Topsy, the circus elephant, by a lethal shock. Talk about a crazy, narcissistic way to demonstrate value, yes? What’s the connection? Plenty!

Back then, the economy was a zero-sum game: the intelligence that I gathered, that you didn’t, meant I won and you lost. As we know, the closed AC standard won out over the closed DC standard. GE went on to become one of the real behemoths. If you went in for bad puns, you might even say GE was the Topsy of its day, but we won’t go there.

Fast forward 110 years, and GE is still around.  The company is a leader in a number of the most important industrial and commercial businesses in the global economy.  Its strongest business during the last decade may have been its financial services arm.  Today, through the “Industrial Internet,” the ad term for its brand of the Internet of Things (IoT), is doubling down with a vengeance on industrial innovation.

By some accounts, GE may be the firm most associated with bringing manufacturing back to the US.

In part, it’s because today’s GE realizes that the old era of proprietary standards in industrial technology has been eclipsed by the IoT’s push for open standards, with broader access to device and operational intelligence, and for its commitment to the hallmark of flexible business design, collaboration.

Two recent news stories illustrate vividly how GE gets it about collaboration.

Last Spring, this household name partnered with ElectricImp and Quirky (now there’s a name that you don’t associate with GE!) to sponsor a competition, open to all, to design IoT products that could be ready for the market by this Christmas season. Can you imagine the discussions that must have gone on in Chairman Jeffrey Immelt’s office about the risks of such a huge corporation teaming with two unknown startups? Yet they did, and the contest was a success.

More recently, GE once again threw open the doors to you and me, announcing that it would crowdsource design of an innovative 3-D printed jet engine mount.  Coming up with some new IoT products was one thing, but imagine the liability risk that GE would incur if this new engine mount were to fail in flight! Now that’s a real commitment to collaboration.

Certainly, these cases are both well-promoted, and the fact of our citing them contributing to their ROI.  Moreover, their commercial success is far from certain.  But the point is, GE is experimenting.  In public.

Chris shared a couple of INEX examples with me for this post.

Recently, INEX Advisors completed a four month study that focused on digging deep – maybe more deeply than ever – into the state of connectivity for a specific class of industrial assets.

Current penetration rates for IoT/ M2M connectivity solutions for the asset class was stubbornly low.  But that was not the most pressing challenge.  The research uncovered that usage rates for deployed connectivity solutions was anemic.

Why?  Stakeholders in that market developed some brilliant frameworks for collaboration on traditional dimensions of their businesses, but, have outmoded views on data:  ownership, access rights and value of.  Those brilliant frameworks accounted for the inherent value of the asset, the personnel working with the asset, even the schedule and budget impacts of those deployed assets.  But those frameworks were not applied to the data about those assets.

IoT demands collaboration with digital and silicon assets as well as carbon and analog.  INEX has been sharing these ideas with their community for the past two years.  You will read more about this specific case mentioned above in the coming months.

Another INEX project, PetNet, now participating in Boston’s BOLT hardware incubator, is built on the concept that IoT solutions can DRIVE and ENABLE new forms of closer, safer, more profitable collaboration in the physical world.

PetNet is building connected devices – Pintofeed — to create a digital backplane to enhance the health and wellness of animals under direct human care.  PetNet’s first devices are intelligence feeders for pets.  But the technology can be applied to different classes of work animals and livestock.  The data created by tracking feeding schedules, volumes andconsumption is a critical source of intelligence that PetNet solutions are designed to make available first to pet owners, and then, with pet owner permission, to other stakeholders with interests in the health and wellness of the animals being fed with PetNet devices.

The data is not hyper-concentrated by PetNet for deployment in an ad platform.  PetNet has found that more value can be created through authentic IoT collaboration – sharing selected data with various stakeholders under specific conditions and permissions.

These are but three examples of how the largest industrial companies on the planet across through startups, and leaders in IoT antecedents such as M2M, are reshaping the definitions of collaboration through and with IoT.

One of what I like to call the “Essential Truths” of the IoT is that companies are going to have to learn to automatically ask a new question that’s the antithesis of the old zero-sum game: “Who else can use this information?

Instead of closely guarding data, that’s going to lead to more of the kind of thinking that created one of Chris’ favorite anecdotes: how German pump manufacturer Grundfos shared the data from the sensors it installed on its pumps on remote African water wells. Someone realized that data could have social benefits as well, and created an app for feature phones that allows people close to those water pumps to query them for operating status , before trudging miles to bring back their family’s water for the day instead of finally getting there only to realize they’d have to hike to yet another well to find water.  Talk about win-win collaboration!

Thankfully GE is no longer executing innocent elephants to prove the superiority of its products. Thankfully, GE is creating a new model of profitability through collaboration that the other behemoths of the Industrial Age would do well to copy in the new realities of the Internet of Things.


September 3, 2013