The Art of the Possible with IoT

Microsoft and BCG released an analysis on the future of IoT recently called “The Art of the Possible with IoT“. It’s a great read for anybody who is trying to get caught up quickly on the Internet of Things (IoT), what enterprises are using it for today, and where it is going in the near future. The whitepaper was created after 50 subject matter experts (SMEs) and 150 IoT executives were interviewed. The study includes data on companies that attempted an IoT initiative, successful or otherwise.

What is the biggest takeaway from the paper? For me, it’s what enterprises today are using IoT for. As a mobile device management (MDM) SME, there isn’t much difference between IoT and MDM. Both technologies can manage devices through commands sent from a centralized administrative center. Both technologies secure devices through standard payloads, certificates, and configurations. Both technologies can leverage cloud services for a non-on-premise infrastructure. From my perspective, the only major difference between IoT and MDM is that IoT is less control heavy, and thus less complex and labor intensive to manage. To further clarify: MDM technology is good for fully securing and managing an entire mobile device such as an iPhone or Android phone. IoT on the other hand is good for securing and managing simple “things” with a wifi chip. This is why many companies tend to use IoT for managing sensors. IoT seems to be great for managing and collecting data from thermometers, cameras, seismometers, etc.

BCG and Microsoft seem to have the same sort of understanding in the paper, but emphasize that the concept is still innovative and groundbreaking:

More importantly, companies are beginning to drop the notion that IoT is simply a technology project to be deployed, realizing instead that connecting to the real world via sensors can create a rich source of contextual and actionable data in their business settings

In other words, “Don’t just throw out those smart sensors into the field. Realize the true value of the data you are collecting.” The paper goes on to describe how enterprises are using IoT, which matches my understanding of a focus on sensors: video surveillance by Genetic, Coca Cola soda fountains, smart mirrors, smart trashcans, etc. The true value of IoT, in general, is the capture and aggregation of real-time data. We live in a world where anything can be made “smart.” Put a wifi chip in a lightbulb, refrigerator, anything, and it can report data about its surroundings. Companies can use that data to derive value. The paper describes six sources of value. In short: data is helpful, and IoT can help you get more of it:

  1. Revenue: discover new sources of value by monitoring environment and customer preferences
  2. Business models: leverage IoT to create and develop new business models and value propositions
  3. Technology: create new synergies between IoT and existing technology platforms
  4. Domain: merge seemingly unrelated platforms together
  5. Environments: gather data from the real world, using sensors out in the physical plane
  6. Impact: sensors can be used in all facets of industry and businesses

One of the best part of the paper was the detailing of the difficulties of implementation. I’m sure that there was some incentive on BCG’s end to describe these (so that future clients would be more inclined to hire BCG), but I can 100% attest to the full truth of these difficulties. A lot of these difficulties are true for any digital transformation project:

  • People don’t like change: Although on a technical level it might be simple to push out a new technology, it can be much harder to persuade people of the value and how to use it.
  • Prioritizing data: Yes, you can put a chip into anything. But is that piece of information really helpful? A big problem thus becomes scope: how do you decide what is important and what is just “nice to have?” You don’t want to over-scope your project and go over budget.
  • Managing expectations: What do you expect to get out of your IoT infrastructure? What is going to be your ROI for the project? The paper emphasizes that there are companies that fail to implement IoT because they realized that there was no real long-term value for them. Before doing an implementation, it’s important to determine the long-term value of the platform, manage your partners and ecosystem, appoint a true leader that understands what to do with IoT, and manage the risk. One of the final points of the paper is that companies are 15% more likely to succeed with IoT if it is one project of many in a “balanced portfolio (a collection of multiple projects from low risk to high risk).”

I will add one more difficulty to the implementation of IoT, but it is a little bit technical. You can’t just put a chip onto an item and then collect that data. That chip has to be compatible with software that can collect the data and then transmit it somewhere. On top of that, the software has to be coded in a way that is compatible with cloud services. For example, in order to leverage IoT technologies on the Microsoft Azure platform, you have to be able to connect compatible devices to what is called the Microsoft IoT Hub. These are decisions that have to be made way in advance, with agreements and contracts between trustworthy vendors and partners. There is a fair bit of technology and coding expertise that is required in order to get an IoT platform up and running. The paper does reference that “talent” is needed, but didn’t specify on a technical level.

Overall it was a great paper and I was able to confirm my understanding of IoT, and also get a view of what the current industry is doing with the technology. I’m glad that my past experience is relevant in many ways, and am excited for what the future holds.

 

My Take on the Forbes Cryptocurrency Webcast “Beyond the Bubble”

I just finished listening to the Forbes webcast on cryptocurrency, and it was not bad! It was hosted by Jack Tatar, a finance veteran who has served as an executive to companies like JP Morgan and Merrill Lynch. In the webcast he covered the basics of cryptocurrency: what it is, how to trade it, and what the risks are. As someone who has been participating in the cryptocurrency world for a few years now, I didn’t exactly learn too many technical things. But this was the first time that I listened to somebody in the finance industry talk deeply about crypto, and it gave me some great new perspectives and insight. I specifically learned two things: crypto asset classification and crypto contract utilization.

First, what is a crypto asset? When I first signed up to listen to the webcast, I assumed that by “crypto asset” they meant cryptocurrency. Well, in the crypto world, cryptocurrency is actually just one of multiple asset classes. In the webcast (and his book apparently), Tatar describes different types of crypto assets: cryptocurrencies, cryptocommodities, and cryptotokens. Tatar argues that although all of these assets rely on the underlying blockchain technology, distinguishing between them is important for analysis and investing. Yes they’re all crypto, but they have different uses and functions.

I found this viewpoint of classifying the different kinds of cryptocurrency interesting. After a moment, I realized that this is completely valid idea. Bitcoin and Ethereum are commonly lumped together, for example, but they have vastly different ideologies. Bitcoin aims to be a true currency, meaning that people are meant to spend it to get goods and services. Ethereum is able to do that too, but the focus is different. Ethereum is a contracts based technology that aims to store transaction information such as contracts directly onto the blockchain. Cryptotokens aim to be similar to what a stock is: they represent the value of a part of a company. These are all crypto assets, but not necessarily cryptocurrency.

Secondly, why even use blockchain technology? This is something that I’ve had trouble understanding for a long time now. I’m not alone. Companies and people are still trying to utilize the blockchain in a way that isn’t done better using a different technology. It stores data but it’s not as good as database software. It can be used as currency but it isn’t as easy to use or as fiscally worth it as regular fiat. What’s the point? Well, this is the one aspect that I can now understand: the data that is stored on a blockchain is permanent.

Why is permanency so important? Well, let’s take the data that is stored on a government database. Let’s just go ahead and for the sake of argument assume that the data is fully secure and usable. That database is essentially software that stores data onto a hard drive, accessible by a database administrator, who follows orders given to him by a superior. There is absolutely nothing technical preventing the database admin from modifying that data if he so chooses. And if he does modify that data, the original data may be lost forever. On a blockchain, that is impossible. Because the data on a blockchain is decentralized and copied onto thousands of machines all over the world, even if someone modifies their own local copy of the data, the consensus of all the other machines in the world will prevent that change from ever affecting the major blockchain.

This aspect of truly permanent data, I think, has the potential to be world changing. Imagine a blockchain of information created in China, for instance, that holds data that can never be changed by the government. In a true decentralized blockchain, the government would be absolutely powerless to censure or retroactively change data that has already propagated into the world. Today, companies have already gone ahead and run this technology with contracts. Blockchain technology is incredible for contracts because once the contract is on the chain, it is irreversible. Both parties can forever refer to that piece of data on the chain to verify the contract. If the deed burns up, or one party claims something, the data can be verified on the blockchain. Absolutely nothing, not even the government, will be able to modify or delete that data.