The convergence of smart devices with the Internet
is creating a new inflection point. Huge opportunities are developing from the
convergence of device networking, wireless sensors, machine-to-machine (M2M)
communication, and the Internet. Companies that fail to exploit this next wave
of the digital revolution will simply obsolete themselves.
Within the next few years, literally billions of
Internet-enabled microprocessors will provide digital intelligence and
connectivity for almost every commercial and industrial product and appliance,
extending the Internet into most aspects of our lives.
Imagine the appliances you use being
Internet-enabled – your house, your washing machine, your refrigerator, your
coffee-pot – all these already have the potential to be networked. Your cell
phone too is Internet enabled, and you could use it to check whether your garage
door is closed, or your coffee-pot is still on.
Skeptics think that this kind of "gadgetry" has
few practical applications for consumers (do I really need to talk to my
washing-machine?) But, it's not the consumers that initially have the most to
gain from device networking — it's the businesses that support them. The
manufacturer of your washing machine should be interested in its operating and
usage patterns. Perhaps when it breaks down it will let them know, so that they
can call pro-actively to let you know that they can provide immediate service.
This may sound only slightly interesting for consumers, but for business and
industrial automation applications it yields several major advantages.
Manufacturers can use their connected products to
develop customer service relationships that can ultimately recreate the basis of
customer management and generate new revenue streams in an information economy.
They can use device-networking technology to reduce (for their customers) the
hassles of product ownership, while at the same time helping their own business
to reduce costs and pursue new revenue growth opportunities. Equipment and
appliance networking is not only possible, it becomes essential.
Internet-connected PCs point the way
Consider what happens today with millions of
on-line home and office personal computers. The ever-present dangers of newly
developing species of computer viruses and spam make downloading of regular
anti-virus updates a necessity – often done daily, sometimes several times per
day. And the revenue model for successful companies like McAffe or Symantec is
network centric.
Hundreds of millions of connected computers using
Windows automatically report errors when they occur. The discovery of
continually occurring new software bugs and security holes forces Microsoft to
provide regular free updates via downloadable “service packs”. Doing this via
physical distribution of software upgrades via conventional media is
unthinkable.
What has already become commonplace with connected
computers will soon emerge as an important service extension for most industrial
(and high-end consumer) products and equipment. In the business and industrial
environment, soon everything will be networked; not just as a cute “feature”,
but as an important part of how products and equipment should be used.
The pervasive Internet
Today, most Internet usage is still human oriented
– information that allows people and businesses to interact with each other. The
big initial growth came with business-to-consumer (B2C) and was followed by
business-to-business (B2B) interactions. With a human population of only about 6
billion, this type of Internet connection is reaching saturation.
The Internet need not be simply for connection to
people – it is also an ideal way to achieve automated device connectivity on a
global scale. Genuine e-commerce is built upon true, across-the-board digital
automation, accomplished by enabling everyday appliances and equipment to
communicate with and control each other.
The next major inflection point of Internet usage
is machine-to-machine (M2M) communications. This will far surpass human
communications in scope, value, and sheer numbers. Within the next few years,
more machines will be connected via the Internet than humans. Eventually
reaching tens of billions of connections, machines will communicate with each
other, as well as with data mining and processing systems that will automate the
communication and interpretation of the mass of data they gather. This will add
significant value for businesses and consumers.
The term “Pervasive Internet” refers to the
convergence of machine-to-machine communications, Internet connectivity,
enterprise-level data-management applications, and Web-based smart services. The
phenomenon arises from the connection of smart devices to the Internet, enabling
fully automated global communication, data-collection and control.
Today, a whole new environment of
M2M is emerging, focused on the issues of how
machines communicate, how they are managed, how the data and information within
them are managed, and perhaps most importantly, how the world (humans,
businesses and society) can deal with them.
The M2M revolution
M2M does not arrive in
the world as a distinct, perceivable product operating in a distinct, controlled
environment. You don't buy it the way you buy a PC running a specific desktop
OS. It arrives in a million different ways, mostly designed not to be directly
perceivable by people.
Networked "embedded
intelligence" is what pervasive computing and M2M are all about. The information
coming from a device can be just as valuable, if not more valuable, than the
device itself – for example: current location, part number, where it was
purchased, when it was installed and by whom, critical specifications,
diagnostics, availability of spares, replacement alternatives, repair
instructions, usage patterns, and more. All this invisible machine activity
makes the information about assets, costs, and liabilities vastly more visible
to managers and to the decision-making process.
Glen Allmendinger of
Harbor Research has a penchant for verbal images that make good sense:
"M2M will bend the
traditional linear value chain into a feedback loop through which the heartbeats
of manufactured objects will continually flow back through complex business
alliances that create, distribute, and service those objects."
M2M will unleash a wave
of productivity and efficiencies previously unseen. When manufactured objects
are continually sending field intelligence back, companies that utilize this
information will be able to shed costs, explore new revenue opportunities, and
solve customer problems as never before.
M2M – the OEM advantage
Automatic M2M communications on OEM equipment can
provide a significant benefit to both supplier and end-user. It can lead
to dramatic cost reductions and drive enhanced customer service initiatives,
facilitating new and significant revenue models.
In the past, to optimize performance, or to
prevent downtime, or degradation of performance, OEMs offered end-users repair,
maintenance or service agreements. The ability to harvest detailed and specific
information from a company’s own equipment, while it is in operation in the
customer’s application and environments, brings a whole new gamut of revenue
generating services and possibilities.
With effective M2M, equipment can provide
information about use (or misuse) trends or single events. Machines can be
networked to each other to develop statistics on operating performance,
predictive diagnostics, downtime analysis and a host of related monitoring and
control information. Actionable decisions can be made quickly, with clear,
cost-saving advantages.
In this information-driven age, the next wave of
OEM business strategy is to take advantage of equipment operating information
that most end-users don’t have the knowledge or ability to collect. It puts the
OEMs knowledge of the equipment into direct service of the end-user, collecting
operating statistics that both can utilize.
As applications become more sophisticated, OEMs
can offer their end users increasingly complex interactions with their
traditionally dumb equipment assets. In many cases, the human intermediaries can
be removed from the equation. Given defined and controlled parameters, equipment
assets themselves can make the key decisions, providing optimum
cost-effectiveness for OEM and end-user alike.
The M2M revolution will transform the way that OEM
equipment is deployed. Most often, the valuable, detailed operating information
is already there, sitting inside the equipment, waiting to be collected and
used. Through the use of M2M, end-users and OEMs can eliminate the barriers of
distance, time, and location.
New software and
services opportunities
Today’s ecommerce is not much more than simple
mechanisms that make certain B2C and B2B transactions are easier, somewhat more
convenient. This is only a first step toward global business automation.
The goal is to network devices that are
self-sensing, self-controlling, and self-optimizing automatically, without human
intervention. This will represent totally new applications for information
technology and telecom, which will totally subsume previous operations and
interactions.
Within the next decade, M2M will drive totally new
opportunities for companies and services involved in device, equipment and
machine networking. Large opportunities will emerge for software companies that
provide information tools to manage the vast, ongoing streams of
device-generated data, and to extract meaningful business intelligence from
them.
The availability of real-time, networked equipment
data brings totally new meaning to the term “disintermediation”. When a
company makes networked product that send real-time information, the company
owns access to the product, and a primary link to the customer. Now, no third
party can sell profitable services to that customer without access to the
historical, diagnostic or status data coming from the networked product. A new
rule will come into force: “The one with the most networked equipment wins.”
Related links:
***
Jim Pinto is an industry analyst and
commentator, writer, technology entrepreneur, investor and futurist. You can
email him at:
jim@jimpinto.com. Or look at his poems, prognostications and predictions
on his website:
http://www.JimPinto.com
. Read extracts from his new book, “Automation Unplugged” at:
http://www.jimpinto.com/writings/unplugged.html
