Connecting an object to the Internet, whether it’s a light bulb, thermostat, pacemaker, home security system or coffeemaker—or building-wide HVAC [heating, ventilation and air conditioning], power, lighting, plumbing and security, a fleet of cars, or global manufacturing plants—is becoming easier, thanks to increasingly ubiquitous wired and wireless connectivity, increasingly small and inexpensive sensors and radios, and the cloud with its vast, elastic processing and storage capacity.
And there are a lot of things being connected to the Internet. According to a June 2015 report by IDC, there will be 29 billion connected devices by 2020, creating a $1.7 trillion Internet of Things market.
Roughly 200 attendees from companies including Cisco, EMC, Goodyear, Schneider Electric and Steelcase attended LogMeIn‘s Xively Xperience 2015 conference, held last week in Boston, to learn more about leveraging the IoT. “Xperience is for senior executives at companies that are thinking about or already have started an IoT product line and are looking for useful, actionable information to make the IoT work in their business,” said Michael Simon, the CEO of LogMeIn, parent company of Xively, an IoT platform and application solution for enterprises building connected products and services.
“I see four levels of value for IoT,” said Jeffrey M. Kaplan, the managing director at consultancy Thinkstrategies, who attended the event. “It lets you react more quickly when something goes wrong. You can proactively anticipate issues and try to mitigate risks. You can better inform your current business to be more efficient and effective. And it can be transformational, creating entirely new business opportunities. IoT is all about use cases.”
Learning From Experience
The IoT, like mobile and cloud technologies, can drive industry-wide business-model changes, as companies like Uber and AirBnB have shown. But during a session called “Learning from Experience: Connected Product Success Stories,” panelists said they’ve discovered that focusing on their customers’ interests and on long-term returns has been vital to successful IoT product rollouts.
“We learned that you need to talk with your customers,” said Tim O’Keeffe, the CEO of Symmons Industries, a plumbing manufacturer that sells the Symmons Inflow showerhead to hotels. The product comes with a wall-mounted display that tracks shower duration, water temperature and flow rate to encourage guests to reduce water and energy consumption, while allowing hotel managers to monitor usage or detect problems via a Xively interface. O’Keefe noted that how customers will adopt connected products is important. “Think about how people will install and use it. Integrating the connectivity into our showerhead was too much. It had to be ‘screw this in behind the showerhead, and have a module on the wall.'”
Panelists stressed that understanding the technology’s possibilities is key, but so is making attainable goals. “You have a list of thousands of feature ideas, but your customers see the ten that they want now,” O’Keefe said. “Look at the opportunity for additional features and products,” but realize that “enhanced features can come later.”
Starting with an IoT platform that can expand with your IoT product line is also important. Nick Hill, the CEO of pet door product maker SureFlap, noted that its RFID-controlled pet door is only the first in a line of new products the company wants to roll out. Running user trials has been critical, he explained, in terms of understanding what customers want and how they’ll interact with your product. “Redoing an app’s graphics and UI [user interface] is the easiest thing to address, but as far as the user is concerned, it’s also the most critical part,” he stated. “The app has to be usable, and look and feel nice. Otherwise, the customer will have a negative experience.”
Moderator Paddy Srinivasan, Xively’s head of products, pointed out, “There are so many examples of companies with great hardware and software who didn’t onboard customers because they didn’t think through the friction of somebody buying the product, downloading the app, and getting the hang of it.”
Building a Roadmap
Building a connected-product business takes specific skills and other resources that your company may not currently have, which raises the questions of what you partner for, versus what you try to hire or learn. Panelists discussed these “build, buy or partner” decisions in a panel called “Building and Launching Successful Connected Products.”
When asked what led him to create a connected product, Ben Stagg, the CEO and cofounder of Halo Smartlabs, which makes a connected smoke alarm, said “We realized that consumer expectations, especially for price-sensitive consumer electronics, included connectivity… there wasn’t going to be room for a ‘dumb home’ anymore. We’re now all in the information business, transforming data into information, and finding relevance in it… removing the ‘I don’t know’ from events in the home, being able to identify physical events, create whole-house alerts locally and also to mobile devices.”
Regarding the challenges in executing the decision to make a connected product, “There were a lot,” Stagg reported. “Get smart people. We discovered that we had to DIY it ourselves to do what we wanted. We turned into a manufacturing company within eighteen months, and that takes a lot more [effort] than you think.”
In terms of reasons to create connected products, Stephen Goodman, the VP of global innovation and product development firm Radius, said “I see differences between emerging and established larger companies. Larger ones have either pain or possibility driving them. Smaller ones see a challenge, an opportunity.”
No matter a company’s size, however, providing tech support for connected devices can be challenging, the panelists agreed.
Jeremy Hill, the director of product management at Radial Point, which provides tech-support software and services that help technology vendors and IT help desks, said that companies, rather than viewing tech support as a liability, should see it as an opportunity. “Support calls are a way to improve your products—not just solve problems, but make them go away in the next iteration [of the product],” he explained.
At the same time, good support for connected devices can be essential. Hill talked about waking up in a frigid house at 3 AM because the temperature outside was thirty degrees below zero, and his home’s Nest thermostat had failed. Sometimes, he said, “[a problem] needs to be fixed NOW, not later. The same goes for other health, security and life safety devices. It needs immediate full-scope support—you can’t just open a ticket.”
Hill advised attendees to “focus on support early on in the [product-development] process, not as an afterthought. And think about creating that perfect support experience, where the end user doesn’t know that something had gone wrong.”
Additionally, the panelists emphasized, having the data isn’t sufficient. Companies need “data literacy,” Goodman explained, describing it as the ability to understand the information they’ve got. And the value in that information has to be communicated meaningfully, he said—for example, “if a warning light at a workplace doesn’t initiate action, it’s not the right solution.”
Many firms lack the in-house expertise required to start building connectivity at the chip level. To simplify the process for IoT developers, Gil Reiter, the director of strategic marketing for IoT at chipmaker Texas Instruments, said, “We started building a system-on-a-chip with all the software for Internet, cloud stack, security, etc. on it. And then we built fully certified modules, and then created kits and put all the documents online, and engaged with integration companies to make it easier for developers to connect to the cloud. All an OEM [original equipment manufacturer] has to do is build their application. Now, anybody can build and enable tens of thousands of devices. Without this, only big companies would be able to do this.”
In his session titled “Methodologies to Overcome the Complexity of IoT,” Adithya Sastry, the general manager of IoT business at IT consultancy Cognizant, summarized the take-home message: “The commoditization of technology leads first to smarter products, and then to smarter processes… We think about IoT as a technology but it’s really about digital transformation—how to use new insights to transform your business, and the way you engage with employees, suppliers and companies.”