Series 3 – Why IoT Matters?
By Tom Vu, Digital Manifesto and Michael Koster, Internet of Things Council Member
Three-part Interview Series (Part 3)
Tom Vu (TV): Describe how Internet of Things matters? Why should anyone care? Should futurist, technologist, data hounds, product extraordinaires, executives, and common consumer need to understand what’s to come?
Michael Koster (MK):
There are two main effects we see in the Internet of Things. First, things are connected to a service that manages them. We can now monitor things, predict when they break, know when they are being used or not, and in general begin to exploit things as managed resources.
The second, bigger effect comes from the Metcalfe effect, or simply the network effect, of connecting things together. Bob Metcalfe once stated that the value of a communications network is proportional to the square of the number of connected compatible communicating devices. Since then it’s used to refer to users, but maybe Bob was thinking way ahead. Notice the word compatible. In this context, it means to be able to meaningfully exchange data.
When we connect physical objects to the network, and connect them together in such a way as to manage them as a larger system, we can exploit the Metcalfe effect applied to the resources. We are converting capital assets into managed resources and then applying network management.
Because Internet of Things will be built as a physical graph, it’s socialization of everything, from simple everyday devices to industrial devices. Metcalfe states that 10X connections is 100 times the value. Cisco is projecting that the Internet of Everything has the potential to grow global corporate profits by 21 percent in aggregate by 2022. I believe these represent a case for pure information on one end, and an average efficiency gain over all of industry on the other.
This has the potential to change things from a scarcity model, where the value is in restricting access to resources, thus driving up price, to a distribution centered model, where value is in the greater use of the resource. Connecting things to the network is going to reverse the model, from a model of “excluding access” to “inclusion access”, a model where you push toward better experience for consumer/customer/co-business.
Crowdsourcing of things is an example, where models are inverted. The power arrow is going in the opposite direction, a direction equalizing toward the benefit of the massive body consumers and people. This in turn, helps shift the business model from a customer relationship managed by vendors, also called advertising, to vendor relationship managed by customers. This is called Vendor Relationship Management, or VRM, pioneered by Doc Searls. This reverses the power arrow to point from customer needs toward business capability to meet needs, and needs are met now that the vendor is listening. A lot of this is not just IoT but also open source nature, and the big changes happening in people, where sharing being held more valuable than the exclusion of access.
Inverting the value model, breaking down artificially bloated value chains, creating a more efficient economy, I believe it important to create a layer of connectivity that will act as the necessary catalyst to the next Internet of Everything, Internet of Things, Industrial Internet. Break down the scarcity-based models, exclusion of access, turn it around. Instead of excluding access and driving prices up for limited resources, we will yield higher more efficient utilization of resources.
Michael Koster describing Internet of Things and the Maker Movement and Open Source Importance of this Development with Booth attendees at Maker Faire 2013 in San Mateo
It matters on a Global Scale, by giving us better resource utilization. SMART Grid alone has resulted in up to 19.5% efficiency improvement, with an average of 3.8% improvement over all deployments already. We do not have enough energy storage or transmission capacity to deal with the major shift to solar energy sources now in progress worldwide. We are going to have to adapt, learn, monitor, manage, and control our usage in ways only possible with large scale sensing and control.
For the spirit of IoT, it’s not only in making peoples/consumers lives more convenient, solving their first world problems, but its more in the ability to manage resources together as a larger system, from the individual out to a global scale. Especially, this holds true with the effects of globalization, balancing, localization, connectivity, and ubiquity. It’s for the people. Social Media had it’s transformation across many things, Internet of Things will also have an efficiency and business transformation.
Companies like Atmel play an important role in creating the building blocks for embedded control and connectivity by means of progressing the ARM / AVR / Wireless / Touch portfolio of products, all of which are the necessary thinking and connecting glue of the Internet of Things. Internet of Things has a large appetite for ultra low power connectivity using wireless standards. Wireless Sensor Networks are key technology for the IoT, so much that WSN was probably the number one issue in the early deployment. There are many competing standards: Zigbee, SA100.11, Bluetooth, Body Area Network, Wi-Fi Direct, NFC, Z-Wave, EnOcean, KNX, XRF, WiFi, RFID, RFM12B, IEEE 802.15.4 (supporting WPAN such as ZigBee, ISA100.11a, WirelessHART, IrDA, Wireless USB, Bluetooth, Z-wave, Body Area Network, and MiWi).
Michael Koster Exhibiting with Atmel Booth at Maker Faire 2013 San Mateo
Tom Vu (TV): What would be the most important design decision that supersedes the eventual success of an open source Internet of Things compliance?
Michael Koster (MK):
The first most important decisions are to do open source design based on needs and use cases. I don’t think we can build an IoT if its not open source, or if it’s not connected to the real world use cases.
Tom Vu (TV): Describe the importance of Internet of Things silos and other M2M standards currently at large in the development community? What are the differences?
Michael Koster (MK):
The IoT has started off fueled by crowdfunding, VC money and other sources that have to some extent built on a business model based on vertical integration. Vertical integration has a big advantage; you need to have a self-contained development to get things done quickly for proof of concept and demonstration.
Vertical integration is also a big driver of the current machine-to-machine, or M2M, communication market. This is the paradigm supporting the initial deployment of connecting things to services for management on an individual thing basis.
The downside of vertical integration is that it leads to silos, where the code developed for a system, the data collected, and even the user interfaces are all unique to the system and not reusable in other systems. Moreover, the vertical integration is often seen as a proprietary advantage and protected through patents and copyrights that are relatively weak because they apply to commonly known patterns and methods.
It’s not always this way, though. As an example, the Eclipse foundation is open source, allowing their M2M system to be used for vertical application development as well as integrated with IoT Toolkit data models and APIs to enable interoperability with other platforms.
The European Telecommunications Standardization Institute, or ETSI, also has an M2M gateway that is a combination of open source and paid license code. New features are enabled through Global Enablers or GEs that implement a particular function using an OSGi bundle consisting of Java code. The Smart Object API can be built into ETSI through a GE bundle, which will enable an ETSI M2M instance to inter-operate with other IoT Toolkit instances. This is the power of the approach we’re taking for interoperability, which is obtained by adding a Smart Object API layer to the system.
Tom Vu (TV): Explain horizontal and service interoperability for Internet of Things, why is it so important?
Michael Koster (MK):
Connected things connect through WSN gateways and routers to Internet services that fulfill the application logic for the user. Today, for the most part, each vendor provides a cloud service for the devices they sell, e.g. Twine, Smart Things, or the Nest thermostat. There are also some cloud services that allow any connection, providing an API for anyone to connect, for the purpose of integrating multiple devices. But the dedicated devices mentioned earlier don’t work with the generic cloud services.
Many IoT services today are based on providing easy access to the devices and gateway, with open source client code and reference hardware designs, selling hardware on thin margins, and Kickstarter campaigns. There is typically a proprietary cloud service with a proprietary or ad-hoc API from the device or gateway to the service, and a structured API to the service offering “cooked” data.
These systems contain a highly visible open source component, but much of the functionality comes from the cloud service. If a user wishes to use the open source part of the system with another service, the APIs will need to be adapted on either the device/gateway end or service end, or both. It’s not exactly a lock-in, but there is a fairly steep barrier to user choice.
Internet of Things (IoT) in Silos
There is the beginning of an ecosystem here, where some devices are being built to use existing services, e.g. Good Night Lamp uses Cosm as their cloud service. Other services that allow open API connectivity include Thingworx and Digi Device Cloud. These services all use very similar RESTful APIs to JSON and XML objects, but have different underlying data models. As a result, sensors and gateways must be programmed for each service they need to interact with.
The current system also leaves users vulnerable to outages of a single provider. Even if there was a programmable cloud service that all could connect to that ran user applications, there would be a vulnerability to provider outages. Much better and more robust would be an ability to configure more than one service provider in parallel in an application graph, for a measure of robustness in the face of service outages. Even more, it should be possible to run user application code in IoT gateways, local user-owned servers, or user-managed personal cloud services. Today’s infrastructure and business models are at odds with this level of robustness for users.
In terms of business and business models, a lot of the connection and network infrastructure today was built on a “value chain” model. These are businesses that are built on a model of vertical integration. In these models, value is added by integrating services together to serve one function, hence vertical. With the Internet of Things, traditional value chains are collapsing down and flattening. There is a bit of a disruption in the business model (services, etc), but also new opportunities emerge to create new Internet of Things services, which is good for business and consumers.
Companies will continue to build out vertical models to specialize in their services. IoT can potentially augment service models with the customer even further and offer creative possibilities of cost savings and experience and deploy more customer centric business fabrics, which will result in better service for consumers.
If companies build their vertically based infrastructure of applications integrating into the IoT Toolkit platform, the basic enablement for horizontal connections will already exist, making it easy to create horizontal, integrative applications based on automatic resource discovery and linkage.
Access to the knowledge can enhance the customer experience and ROI for businesses. We are at the brink of the new era, where companies and products can arise from the information economy; only now motivation via implicit or explicit engagement is tied to things, assets, information, sensors, education, and augmentation; and everything is more intertwined and involved.
Tom Vu (TV): Please assume the role of a futurist or even contemporary pragmatist. How does the landscape of Internet of Things fit into that picture for an individual?
Michael Koster (MK):
It goes back to the idea that your life is going to change in ways that we are no longer be driven by the scarcity pressures we experienced as hunter gatherers. IoT will trigger the overall shift from the resource accumulative, to the interaction driven and resource sharing-enjoying model due to the ubiquitous connectivity and the right kind of applications we can use to bring this experience to maturity.
We expect the Internet of Things to be where the interaction moves away from screens and becomes more like everyday life, only more convenient, comfortable, and easy to manage. We’re still looking for the valet, the system that simply helps us manage things to enable us to become more as people.
Tom Vu (TV): Do you have any insights into how industries like Semi-Conductor can help share the responsibility of making Internet of Things for the People and by the People?
Michael Koster (MK):
Yes, of course, everyone has a part in the build up and build out of Internet of Things. From business to academia, in the home and across the planet, the march to Internet of Things is inevitable. Again and again, the familiar signs of disruption are being seen. We see that happening today with the very first initial releases of connected products. There is a movement in Makers, with substantial global activity. Which is quite harmonious to open source and open hardware. This will be even wider spread once critical mass takes effect with products more and more becoming connected and smart via Internet. The power of the sensor proliferation is akin to Twitter having 10 people registered and using their Social Fabric versus 100s of millions. The more everyday devices and things are connected, the more the power of IoT will overwhelmingly surface.
It’s only how well we integrate and collaborate together across industry to propel this next phase of Internet to the next level. Every potential disruptive technology has a turning point. We are at that point and we are all part of this movement. In turn, the Internet of Things will make better products, a better user experience, and optimized efficiency across all resources. How we decide to apply this technology will make all the difference.
This very notion forces industries to be more aware, efficient, and productive. Sensors and connected devices will help supply chain, manufacturing, research, product roadmaps, experience, and ultimately drive an economy of growth. The enterprise begins to have a visibility, transparency to customers, people. Ultimate, it’s a true nervous system, connected via an enterprise level to a personal consumer level.
SMART, AWARE, and SENSORY are new enhancements to business to include customer habits and patterns of use, threaded right into the production routine and product design. Internet of Things will help sculpt a more consumer oriented and customer centric world of products. Customers will have direct influence in the manufacturing of individual products and instances of products. Companies can help by being part of the community, albeit in the field of electrical engineering, design, data, to software development on the cloud. Internet of Things will have touch points between customers and business as much as the electrical power grids have influence across all business today.
The new ecosystem will have micro scale and agile manufacturing at a level of customization unimaginable today. It’s the next driver for brilliant machines, maybe artisan-machines that work for individuals but still live on the factory floor.
You can work with the developers and work toward expanding businesses that can embrace the development world. Help build the $50 cell phone or connected devices that bridge fiscal and energy compliance for a better world.
Ride the long tail wave… and the inverted business models… Make more accessibility to all products and be responsible in accessibility… From crowdfunding or crowdsourcing, like Kickstarter or Makers, someone is going to figure out how a sensor can do more, in a very impactful and human experience paradigm. The new innovations will come from everywhere; from the 14 year old in Uganda who takes apart her cellphone to repurpose it into a medical monitoring device, from the basements and garages of millions of makers and DIY’ers worldwide who have sure genius among them.
It is super important to get the very latest hardware out to the open community so that innovation can be leveraged, taken to new levels of creativity and crowdsource ideation for collaboration and massive cross-contribution. Accessibility, documentation, development, ecosystem for software support for the MCUs are all too important. Atmel holds building blocks to many of these pieces, combined with their development tools and evaluation ecosystem (Atmel Studio 6, Atmel Spaces, Atmel Gallery) and involvement with Makers and Arduino.
Open Hardware / Open Source will come to be de-facto standards. Bundle open source along with the open hardware to make it even more accessible and embed rapid guide start for newcomers. Right now a key piece is the Wireless Sensor Net. If there were a good open source WSN available and supported by manufacturers, it could enable a groundswell of connected devices.
Build open source and open hardware educational IoT developer’s kits for ages 8 and up, for high school and college, to hit all levels of involvement and expertise. Support community hackspaces and places (ie Noisebridge) where everyone can learn about the digital world and programming.
We are seeing the leveling out of the development happening in all parts of the world. Radical innovation is happening everywhere. Open Source is helping shape this curvature. This is the broader whole tide that we are seeing. Pinocchio is one great innovation emerging from Makers and Open Source, then we have IoT hubs such as SmartThings, Thingworx, or Xively (formerly Cosm). There is a lot of crowdfunding, ideation, blooming of disruptive products looking to change the scene of things to come….
Support open source and open collaboration in everything, to create a culture of sharing and innovation, a culture of synergy in building the Internet of Things together. Involve customers as participants and makers of their own experiences. Make sure everyone has access to the information and support they need to build, maintain, hack, and repurpose their devices over time to promote a healthy ecosystem.
This time innovation is going global. The ideation is happening everywhere. There are many global Silicon Valley type hubs, other metros in the world, as well as global accessibility to the same information. We see startup mentality blossoming across all geo-locations. Again, Semi-Conductors is contributing, helping pave the back-plane for innovation & connectivity for the development layers on top. Global village of innovation is coming of age… Now.
Also read Part 1 and Part 2 of the Interview Series.