Yesterday I outlined various factors that are hampering the growth of the Internet of Things. However, there is a solution in the form of the blockchain, as IBM have identified. To recap, blockchain technology could elegantly solve the problems that lie ahead for a number of reasons, not least because it introduces:-
- one definitive ledger that records every possible transaction permanently;
- peer-to-peer technology that massively reduces cost and increases security by removing centralised, expensive and vulnerable organisations;
- increased computing efficiency as P2P utilises idle processing power from around the network;
- enhanced privacy as details are no longer surrendered to organisations acting as pinatas to hackers.
In this second post, I just wanted to finish with a few areas that the Internet of Things is likely to disrupt moving forwards and why it is therefore so significant. Again, kudos goes to IBM for setting this out so clearly in their report.
Disrupting the Physical World
In today’s world, buying digital content using the Internet has become entirely normal for most. But the Internet of Things is now looking to turn the physical world into one that is “as liquid, personalised and efficient as the digital one“.
The report identifies five key areas for disruption that will drive the transformation resulting in “the liquification of the physical world”.
1. Unlocking excess capacity of physical assets
The Internet has let us find, use and pay for digital content (books, music, films etc) instantaneously and the public has become increasingly comfortable doing so. But the Internet of Things provides us with the ability to find, use and pay for physical items.
With physical items (rooms, vehicles, whatever) online and actively updating systems as to their availability directly, the opportunities to monetise these under-used resources is huge. Just look at the growth of the Collaborative Economy,
2. Creating liquid, transparent marketplaces
Driven by mobile and social networks, demand will release supply that was previously constrained in the rapidly expanding peer-to-peer economies.
3. Radical re-pricing of credit and risk
All this monitoring will mean that each individual will start to receive customised credit according to their life, history and situation. Rather than relying on one-size-fits-all models, people who were previously excluded from enjoying this will now be able to access consumer credit that is priced reasonably. Money will flow in areas that it has never been able to before.
4. Improving operational efficiency
The sectors that have traditionally been slow to incorporate technology are likely to experience the most significant changes with the Internet of Things. The report highlights farming in particular. It currently requires significant capital expenditure and technology but could benefit from a wealth of data that sensors across equipment, weather conditions, field monitors and many other areas could revolutionise the industry overnight.
5. Digitally integrating value chains
Rather than losing valuable time waiting for a replacement to be shipped after an object breaks, sensors will monitor performance of objects and automatically source, negotiate the price and take delivery of replacement parts and therefore minimise any down time. There will be a rise of connecting ‘recipes’ between services and products (look at IFTTT for a simple example of the value in the concept)
The Importance of Design Thinking
As with every revolution, the key is utility and not techno-wizardry. The IoT will be driven by an improved user experience and improved functionality in devices. The fact that a device is connected to the internet is irrelevant to most people. Compare that with cookers that turn down the heat when the pot boils over or smart toasters that cook toast according to your preference – in these cases, solutions that increase safety and quality of food will be appreciated by users and drive the growth of the IoT.
With the IoT, each device should be acting in the best interests of its users and not third parties. Crucially, the machine-to-machine communication should be invisible to most users whilst designs of interfaces that deal with machine-to-human interfaces must be designed to facilitate far greater degrees of interaction.
I’m going to wrap up by simply copying the report’s suggestion for the sort of businesses that will do well in this brave new world. Put simply, they are most likely to enjoy success if they do the following:-
- Enable decentralised peer-to-peer systems that allow for very low cost, privacy and long terms sustainability in exchange for less direct control of data.
- Prepare for highly efficient, real-time digital marketplaces built on physical assets and services with new measures of credit and risk.
- Design for meaningful user experiences, rather than try to build large ecosystems or complex network solutions.
In the near future, I’ll be delving into how IBM’s thinking has evolved (in the form of the Adept project). But in the meantime, given the fact that predicted growth of the IoT means that it will affect each and every one of us, I hope you found something of use in the last couple of posts.