Q&A: Why IoT has failed to take off and the impact for the world when it doesIn this Q&A, Nick Earle, CEO of Eseye, discusses why he thinks IoT has failed to take off and the impact for the world when it does
Nick Earle, CEO of Eseye, argues that in reality, IoT has never been delivered to the world as was first projected — instead, he suggests there are still only a few devices can communicate with each other… And not all that well, either.
Having held global leadership positions at HP, Cisco and worked with many start-ups before joining Eseye, in the below Q&A Mr Earle discusses why IoT has yet really take off, and the consequences for the world when it does.
1. Why did the predictions get things so wrong — where are the 40 billion missing IoT devices?
There are multiple reasons why the predictions 10 years ago that we’d see 50 billion devices by 2020 proved to be so wildly inaccurate, but it all starts with the fact that the industry has been neglecting the business case for IoT.
It’s hard to make a compelling business case for any IoT device that that doesn’t seamlessly connect with almost 100% uptime, from a single product SKU. After all, no one, not the user or the mobile network operator (MNO), wants a device that’s difficult to set up with patchy connectivity and poor uptime. Especially so when multiplied by thousands of devices around the world and in different time zones. Yet this is the issue that plagues forward-thinking companies wanting to connect their products and devices the world over.
The entire cellular connectivity ecosystem is designed around the idea that you buy a SIM card which is locked to one MNO, and if that network doesn’t cover the area you are in or roam onto another one which provides coverage, then that’s too bad. If you take your device abroad, you then have to switch to an even more costly roaming plan. This is far from ideal for consumers with one phone, let alone enterprises looking to deploy thousands of devices globally.
The net result of this stuttering start for IoT adoption is that IoT is yet to ‘cross the chasm’, in the technology adoption lifecycle, meaning not enough pressure is being put on the MNOs to find a better approach. And finally, this failure to move away from the focus on consumer mobile devices is creating unimaginable amounts of complexity, leading to 74% of IoT projects failing in the proof-of-concept phase.
Let’s not forget too that the MNOs are used to working with a comparatively small number of different mobile handset models from just a few suppliers that each undergo a huge R&D process and rigorous testing before being rolled out. Compare this to testing, certifying and seamlessly connecting the millions of different device models and configurations required for IoT to succeed and you have some idea of why we’re in this situation.
2. How can mobile network models get ready for mass IoT deployment?
We need to end the idea of being tied to one network if mass IoT deployment is going to succeed. Devices must be able to switch instantly between networks depending on which has the best coverage and signal strength, if we’re ever to bring device uptime figures in line with real-life expectations and make a compelling business case. This mustn’t be confined to national borders either, permanent roaming needs to become a thing of the past. In some countries, for example, regulations state that devices cannot roam permanently for more than three months — after which time they risk being disconnected. Devices will have to be able to rapidly localise onto local networks wherever they are in the world both for latency and legislative reasons.
But, whilst we must put the Enterprise back in control, this doesn’t necessarily have to strike fear into the hearts of the MNOs. Device operators and Enterprise customers don’t, by the same token, want to owe money to multiple MNOs or have to make support calls to networks in foreign countries on different time zones, speaking different languages. A mutually beneficial harmony can exist, where customers still have a relationship with one network operator that provides the bulk of their connectivity, but who then doesn’t hesitate to put that customer’s needs first and move their device temporarily onto another competitive network to maintain uptime.
Think of it as a similar model to the Star and oneworld airline alliances. You buy your tickets with your preferred airline which bills you and makes the arrangements for your entire journey. It then carries you on all the legs of your journey it can, but hands you over to its partners on the routes it doesn’t fly. Better for you and better for the airline. This is exactly what we’re building with our AnyNet Federation. We’ve already signed some of the world’s largest MNOs mobile network and will be announcing more soon.
Understanding the convergence of IoT and data analytics
3. What will a connected IoT future look like across various industries and society as a whole?
An IoT explosion will create previously unthinkable, disruptive business models. The first enabler for this is the ability to turn non-connected ‘dumb products’, such as running machines, lawnmowers and hairdryers, into connected ‘smart experiences’ which result in big data goldmines for their manufacturers. As more of these products are launched, more pressure will be exerted on competitors to follow suit and this will, in my view, result in accelerated adoption of IoT. Think of it as a form of accelerated Darwinism for product design. It’s the survival of the fittest. Businesses that don’t adapt and evolve will succumb to natural selection driven by the consumer. We will see a rapid rise in innovation, the likes of which we haven’t seen in decades.
To give you an example of how this is already beginning to happen, within retail we’ve seen Costa Coffee disrupting the coffee industry with its Costa Express machines. Costa has essentially taken the coffee shop experience and distilled it into a machine that delivers a highly personalised coffee retailing experience akin to, or arguably better than, a traditional coffee shop. So much so that they market it as ‘a Barista without a Beard’. Not only that but it can be wheeled into a petrol station or convenience store anywhere in the world, and instantly start selling coffee. The machine can be monitored by Costa remotely as data is collected by one of the 90 machine sensors and transmitted back to HQ for analysis. The coffee beans and milk are topped up by the retailers’ own staff. No need to take out a costly lease on a building, buy new equipment or hire and train new employees. If machines don’t perform as well as expected they can be unplugged and moved to a new location or even country. Switch it on and within minutes it is vending high quality coffee, and collecting valuable usage and customer behavioural data. It just works — and it’s highly personalised to each and every user.
Looking further into the future, IoT won’t be limited to big-ticket items or highly engineered machines. We’ll also see a rise in printable, disposable sensors, which have the potential to have an even more significant impact on society. Currently, it’s estimated that around 30% of the world’s food is wasted. Imagine if the location, age and temperature of every box of produce was constantly being monitored, from farm to store. How big of an impact would that have?
But it’s worth noting that IoT is already having an impact and changing societies in meaningful ways. For example, eWaterPAY is helping to solve the challenge of providing continuous clean water resources to rural communities in Tanzania, Ghana and the Gambia. IoT connected pumps can
collect micropayments via mobile phones to help pay for their maintenance and upkeep, and alert engineers if they fail. The pumps are having a secondary societal impact, because they are enabling communities and individuals that typically don’t have a traditional bank account or credit rating to build up a financial history as well.
4. What new user experiences can be created by IoT, and how can these experiences be monetised?
It was Henry Ford that said, “If I had asked people what they wanted they would have said ‘a faster horse’.” It’s through a similar lens that businesses need to look at the possibilities of IoT and the disruption it can cause.
There are several different ways of monetising IoT. Most IoT use cases we’ve seen so far in the world have been devices with additional ‘connected’ features, that enable manufacturers to charge more for them. Some are charging a subscription fee for additional features, services and experiences. This is better as it brings customers into a mutually beneficial ecosystem where the experience can be constantly updated and helps to lower the initial cost of the purchase. All fine, but these models will never help us to cross the chasm on their own. All we’ve done is made a faster horse.
True IoT will see brands cut out layers of intermediaries and build relationships directly with consumers. Physical products will not only offer personalisation by learning and remembering your likes and dislikes, but will constantly evolve and improve. Think about how Apple is constantly updating the user experience of its devices and the excitement when a new operating system is released. Manufacturers that once would have sold via third party retailers will find themselves selling directly to the end-user.
For this to really take off, however, we need to bring the cost down, whilst maximising the experience. Would Facebook be in the position it was today if it charged users a subscription fee? By the same token, would it make as much money as it does if it charged a subscription fee, rather than utilising the power of the data it gathers from the usage of the platform?
To make IoT financially viable, we must start by looking at what can be achieved with the data gathered from that product or service. How can this data be used to enhance it? Whilst by no means an affordable option (pioneering new tech never is but it will be eventually), just look at how Tesla cars are constantly fixing and improving themselves over the air thanks to data being gathered across every Tesla car in the world. Look at how trends can be spotted in peoples’ behaviours and usage of a device or service, like a smart vending machine, to be able to improve it.
Then, we can consider how this data can be monetised to provide additional revenue streams for the business, ranging from helping to inform the R&D department on which new products and services would work best, to helping create better marketing campaigns, and even selling anonymised data to other companies to help with their market research. And finally, you can interconnect with other companies to develop greater, joined-up experiences that work seamlessly together.
By creating the best possible product or service you can that builds customer/brand affinity and provides additional sources of revenue from the data it gathers, you’ll accelerate adoption and find a significant economy of scale. Meanwhile, your competition will be left looking like dinosaurs.
5. How can the world’s connectivity challenges be overcome to secure IoT’s future?
We need to be brutally focused on the idea of simplicity and invisibility. Everyone, from device designers to MNOs, needs to ensure that connectivity just works, that the devices just work. That IoT just works. We must remove all barriers to effective use and create a seamless experience for consumers.
By achieving near 100% global connectivity coverage, as I previously outlined, the connectivity challenges we battle today will be overcome. This will signal the dawn of a new era for IoT that will see it take centre-stage as one of the most important innovations and disruptors of the century.