The Awesome Twosome: IoT & Big Data

Sachin Mahajan MobileLive & ex-TELUS

Its 2001, Apple is readying up to launch an iconic product & experience revolutionizing the portable music player industry. The product is named unconventionally, as the iPod. Steve Jobs has been intrinsically involved in the design, user experience and even the minutest detail such as the color of the iPod…..to this end they were conducting focus groups to better understand which iPod color might be the primary choice of shoppers, and hence to launch in. Over a period of 2 days and intense discussions later the focus groups came back with the unanimous decision on the color – “Yellow”. The product management team thanked the focus group members for having spent their time and as a gesture of their gratitude asked the participants to pick an iPod, of their choice, on the way out  80% of them chose white!

Data often tells a story which is contrary to what people say….some of the big data analytical tools give us the latitude of looking for patterns rather than making us all anthropologists trying to observe people’s behaviour and try to differentiate between what they say vs what they actually do.  How many of you would have believed that with the launch of the white iPhone, the sales of white cars would have gone up in LA; I wouldn’t have. But apparently- women like to match their colors; again big data would have allowed us to make such predictions.

I stumbled upon the following graph from Gartner, indicating that IoT had recently nudged Big Data from the “Peak of Expectations” into the “trough of disillusionment”. Not sure I completely agree with the chart since one in six (15 %) consumers already use wearable tech today, such as smart watches and fitness bands, making me believe IoT doesn’t fit the mould of Gartner’s previous predictions- where largely  <5% adoption existed well into the “Slope of Enlightenment”. Either way IoT & Big Data have arrived and if we marry the two together- we definitely have a winning proposition.

The value of IoT is definitely in increasing revenue, productivity, efficiency & lowering cost, but often companies forget the value of the data it generates. I see the culmination of big data and IoT fundamentally altering the value proposition to the end customers by providing insightful, relevant and actionable data to influence the decision making paradigm in real time, improve QoE and lastly unlock the hidden value of the same data in parallel verticals.

Let me elaborate, essentially IoT and Big Data are working together in 3 ways:

  1. Finding Big Data trends created by IoT Applications.

 As millions and billions of things get connected to the web, there is going to be a tsunami of information generated over the next few years. From the dawn of time until 2004 – 5 exabytes of information was generated and captured. If you ask how much is that data- it essentially is books stacked from earth all the way to pluto and back 80 times over. In the course of the next decade 500x of data it was created and from 2015-17 it is forecasted to grow by 1500x. The biggest hurdle facing organizations considering IoT deployments will be knowing what to do with the massive amounts of information that is being gathered. One challenge which needs to be overcome is to design for analytics – executing a strategy that sees data more as a supply chain than a warehouse. Another is the ability to marry big data trends with in depth expertise in the vertical being explored.  Analysts believe that organizations which can effectively overcome these two issues will financially outperform their competitors by 20-30%. That is incentive enough for most businesses and hence we see companies such as Mnubo & TIBCO’s  and other IoT Analytics Platform companies’ IP becoming increasingly sort after.

2. IoT Applications and Big Data Complementing each other

An auto sharing company recently started allowing their members to drop the car off in any part of the town and through IoT solutions were able to locate it and in real time let potential customers know where to pick it up and open it using electronic keys. Using big data and predictive analysis they were able to optimize the fleet size and through IoT solutions were able to provide unique services and business models which completely flipped the traditional car rental market on its head. This is just the beginning.

The key to really unlocking these new business models and customer experiences is by managing and using IoT & big data in new ways. Another vertical where we see them come together is the retail sector. A 100 years back when someone walked into a store more often than not the shop keeper knew the customer, their choices, socio-economic status and based on it made recommendations. Fast forward to 2015 and it would be hard to find a service agent in a big box retailer to save your life; let alone talk to you abt a product. Here Big data and Iot is being used to recreate the experience from a 100 years back. Providing customers relevant, targeted and focussed recommendations based on their buying pattern of the last few trips and  using IoT as the last mile. Its essentially the golden “2 second rule” i.e providing the customer the required information to help influence their decision making paradigm in the 2 seconds when they are making it. Beacons help track customers in the aisle and while they stand pondering on the type of noodles they need to buy- in real time based on inventory and promotions a recommendation could be pushed to the end customer’s phone. This is not a pipe dream of the future, some companies are making it a tangible reality in the UK today and have reportedly increased revenue by 30+%! Did someone say, it really was the art of the possible?

3.Running different algorithms on the same data set to create use cases for secondary IoT verticals

In a world where we possibly have north of 4BN sensors (and only 3.5BN toothbrushes), we are being spoilt by the richness of the data available across industries. Often, we find ourselves uncovering insights being driven by the data captured for an entirely different business need to begin with. A key example is the connected car. The connected car experience brings safety, security, diagnostic and infotainment applications to the end customer. Applications such as real time traffic information, streaming music, ability to watch a Netflix movie and so and so forth make the consumer’s commute a lot less taxing and more productive. As the next wave of growth comes through the connected car in the IoT space, companies are also finding different applications for the same data:

  • Insurance companies are tapping into real time parameters such as average speed of vehicle, number of traffic violations, harsh braking, accidents and so and so forth. This information is then being used to price the insurance premium of the clientele.
  • Cities are finding valuable insights by looking at congestion of traffic and health of the roads from the connected car. These data points are being used to reduce travel time through improved traffic congestion planning and more insights for emergency response teams
  • Dealerships now have a better handle on the health of the car and are able to communicate more effectively on why the car needs to be serviced with the ability to provide certainty on cost, time and effort needed to rectify the issue.

Clearly, Big data and IoT are harnessing data and converting regular day to day interactions into transformative consumer experiences and that’s where the value for businesses lie.

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Google, Apple, Sasmsung…who among today’s front-runners is most likely to dominate the IoT ecosystem?

Sachin Mahajan TELUS

For nearly a decade industry analysts and technology enthusiasts have been discussing IoT and the art of the possible.  Early on it seemed like a pipe dream or a luxury only the rich could afford- with the physical world around you reacting to your unique needs and preferences to provide a contextual, relevant and a very targeted experience. That all began to change over the past 3-4 years as hardware became more affordable,  wireless connectivity ubiquitous, and applications available across various industries. It also finally started becoming main stream as the big boys i.e. google, apple, intel, Samsung, IBM etc. have all started making significant bets in this space. In the past 6-12 months multi-million and in some cases multi-billion dollar acquisitions or partnerships have been announced. Google has just under $60BN and Apple a formidable $160BN of cash sitting in the bank. That’s a sizeable war chest to be used for acquisition and growth in industry verticals they truly believe in!

googlenest                               Dropcam

Anyone following the market would be quick to realize how bullish google is in this space. Over the last few months alone they have invested ~$4BN in acquisitions in the IoT ecosystem- Boston Dynamics, Nest, DeepMind, Dropcam on top of seven small to mid-sized robotic companies!!!! Not to forget their investment in Google’s futuristic X lab – which has a plethora of IoT Platforms(Glass, Driverless car) and the omnipresent android OS which is going to be powering half, if not more, of the IoT devices in the long run!!!! It’s one home run after another. The barriers to entry they are creating are mind numbing – from the consumer hardware space to focussed application platforms (Glass in the B2B space as an example), to Manufacturing plants, Killer IoT Solutions and finally the OS space. I would probably give my right arm (and possibly even other parts of my anatomy) just to be in the room with Larry Page & Co. as they discuss their IoT acquisition/expansion strategy.

download                                                     homekit-logo1

Apple on the other hand has a world domination strategy, more in line with their past escapades. Rather than dish out billions to grow inorganically- they have recently announced Homekit, Healthkit, Carplay and iBeacon plays.  HomeKit is a new framework for communicating with and controlling connected devices in a user’s home. At the outset it doesn’t seem like a novel idea in home automation, as present manufacturers (Belkin, Insteon, Lutron, etc.) have all been vying to be the “central home automation platform”. However, the critical mass of Apple products currently in use (800-900MN) and the smart developer community awaiting a standardized API kit and certified device program will provide the company a MASSIVE advantage!

Healthkit on the other hand is a framework used to store, retrieve, manipulate and present health info on apps. It helps giving the user a dashboard view of their health status by aggregating data across multiple devices and platforms. With over $9,000/person/year being spent on healthcare in the US –it is a perfect vertical to cause disruption or provide help in making sense of all the chaotic programs in place. From a consumer’s perspective Healthkit is exactly what the doctor ordered, so to speak.

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Then you have the other lesser known enablers such as PTC- who first acquired ThingWorx ($120MN) and then subsequently Axeda ($170MN) for the Application Management Platform. Everyone wants a piece of the pie!!!

Clearly, most companies are realizing that IoT is poised to become a key driver of their financial and technological growth for the next few decades and are trying to position themselves best to unlock its hidden value. The race has just begun and the verdict is still out but clearly we have a few front-runners most likely to dominate the marketplace. I as a end-consumer couldn’t be happier; as I truly believe that the use cases for IoT are only limited by our imagination…and we are just beginning to realize the “art of the possible“!