2015 is supposed to be a big year in IoT.
2015 also marks the 5th calendar year INEX Advisors has been an active participant in the definition, development and deployment of IoT solutions, companies, markets, the global industry.
We practice IoT product, market, partner, industry, standard development every day in our teams, with our clients and portfolio companies, and with amazing people from every major stakeholder group that makes up the IoT industry, and markets.
During that time, we have learned a lot about what ‘IoT’ is, is not, could be and should not be.
This is our framework that we use to help us keep our now-term work focused on the long-term prize. The nine ‘imperatives’ below – three commercial, three technical, three organizational – are a concentration of the fundamental ideas of IoT – the primitives if you will – that we developed with hundreds of brilliant people doing the work to create an intelligent, intentional, impactful IoT.
Take a look. Tell us what you think.
Three Commercial Imperatives
Simple truth: IoT is about people. We need to start with value propositions for humans and their organizations with responsibilities and opportunities to optimize their physical worlds. Optimization has at least three dimensions.
Deployment of IoT Has to Ultimately be Tied to Profits and Other GAAP Metrics
IoT must directly drive risk mitigation/ cost reduction and/or revenue generation that ultimately drive profits. Revenue impact alone is insufficient. Moreover, those profits must accrue to the primary deployer, their customers and the solution supplier – at least. Profits for a single entity in an ecosystem will not be enough, for IoT deployments will have too many obvious impacts on multiple stakeholders. But look beyond the income statement to the balance sheet too … there is real money in optimizing assets.
Broader Quantifiable Impact Beyond GAAP Financial Metrics
IoT must directly drive impacts beyond corporate income statements and balance sheets. The most innovative companies in the world today are pursuing meaningful CSR (corporate social responsibility) agendas. Within the smart cities domain, one need look no further than LEED, GRESB and GISB for the start of target impacts that can be measured in real time, managed persistently, and linked directly to GAAP.
Privacy in IoT is not dead. Privacy is top of the agenda not only for FTC, or EU. Examples are emerging across multiple industries and markets. Privacy is a killer application, enabling technology, and market maker in IoT. From user associations (AEMP) to multi-stakeholder industry initiatives (AFBF) to the growing stream of cases of conflict over IoT Digital Rights Management (DRM): It’s privacy, stupid.
Three Technical Imperatives
Three years ago, Cisco convened a collection of people from all over the world to help define the fundamental requirements of IoT, or IoE. We were there thanks to our partners at VHG. Many of the true thought leaders in IoT were there. What came out of those meetings seemed radical to some back then. Today, many are non-negotiable. Cisco gets this.
Event-based Approaches to System Design
Always-connected modes of operation and time-series data analysis are inappropriate or insufficient in an increasing share of IoT solutions. We need systems that are context-aware, and engage on context-aware event-bases. The concept of billions or a trillion devices chirping at regular intervals, regardless of status, is a terrifying, wasteful or at least dumb idea to many of the best system architects in the world. Context.
Self-Defining/ Describing ‘Things’
The cost, stability and availability of embedded intelligence, security, comms and storage in ever-smaller devices screams ‘distributed systems’. In a world with tens of billions or hundreds of billions of ‘subscribers’ and ‘publishers’, we cannot expect that a single, centralized architecture managing all those interactions is going to scale. Devices need to be given an appropriate level of autonomy to transact, peer-to-peer capability, even if only sharing basic updates on the immediate part of the physical world a device tracks.
Two-Way, Multi-Level Security
One of the primary barriers to broader and deeper deployment of IoT solutions is ROI. And some of the primary barriers to ROI are in actuation, or how systems ‘close the loop’. If you cannot change conditions in ‘real time’, knowing what is happening in ‘real time’ is of limited value. IoT systems need to design closed loops for applications. That means having access to the actuation operations – digital (machines) or carbon (people). And THAT means significant security requirements – at multiple architectural levels: (a) Sensor input, (b) network uplink, (c) data storage/ processing, (d) network downlink, (e) actuator output.
Three Organizational Imperatives
For the past 5 years, we have been researching, analyzing, advising and investing in a number of IoT markets. During that time the needs of people and their organizations have been primary barriers or enablers to success in IoT. Despite the certain, if uneven, rise of machines, people are making the decisions in IoT.
The best teams that we have seen in the past 5 years are the teams that balance focus on commitments with keeping their market radars tuned, and being judicious in applying their agility to pivots. Among the keys for us: They include as part of their leadership subject matter experts from the physical world that the teams are working to instrument, digitize and optimize. Chemical engineers and metrologists on the digital oil field teams. Veterinary sciences and animal nutritionists in precision feeding programs. Former Tier 1 operators in public safety and national security IoT. Tech, finance, marketing and operations matter. So too, do these physical world SMEs.
Data Governance Policy
Creative. Actionable. Relevant. Authentic. Scalable. These are the imperatives for an IoT ecosystem. Too often, too many companies race to meet one requirement or another to enter as many partner alliances, programs, networks as possible. This ‘skipping across the top’ approach is not working in IoT. IoT markets are fragmented. Successful IoT solutions reach deep into organizations. Partnerships, alliances, networks must be prepared to dig a lot deeper to succeed – as measured in the commercial imperatives section above. To win in IoT you do not need the largest ecosystem, only the most relevant for the intersection(s) of your technology and your target customers, with the partners that can deliver CARAS value.
In one of our first public comments about IoT back in 2012, we implored developers and deployers to ask questions about their connectivity strategies and plans. Starting with Why.
Why connect something. We found our early answer and shared it in our TEDx talk on IoT.
Many of you have found your why and are racing into the ‘What’ that you do.
We have time to address these fundamental ‘how’s. I think we have fiscal and moral responsibilities too.
My dear friend, and CEO of one of INEX’ first portfolio companies, Stew Skomra puts the ‘how’ question another way: Billions of people know how to ‘get’ connected, now we need to learn how to ‘be’ connected.
Stew and his team and their approach to instrumenting the physical world are a great example of a team obsessing over ‘how’. We like that.
We have a moral responsibility that is not at odds with our fiduciary responsibilities to persistently ask why, what and perhaps most importantly, how we will instrument the physical world.
How is the bridge between what and why – and the primary path to max ROI, IRR, ROIC, market share, revenue, margin, growth and a whole host or broader impacts you and your teams and partners may care about more than money, less than your families.
Answering how will have as much to do with framing your IoT work as any other question you may ask or answer.
If you need any help, give us a call. We would be honored to help.