Internet of Things (IoT) has become a rallying cry for the world of connecting (mostly small devices) together and to the Cloud. This could be one of the largest new markets to develop in decades. You get meters able to read and forward information instead of having ‘meter readers’ walking around to simply record the numbers on the meter on a clipboard. Or, take the concept of healthcare where a number of sensors could be placed around (and in) our bodies and then wirelessly transmit information and alert medical support when necessary (the Apple Watch does some of this already). Or, take a car that has sensors that can assist with driving and can wirelessly communicate to a network that can determine when service is needed or communicate to other vehicles when a problem has occurred further ahead to prevent subsequent accidents.
I think the benefits of IoT will be everywhere and in every industry. The benefits are so profound because we haven’t had such capabilities before so these benefits ‘ring loud and clear.’ One of the drivers of the expansion of IoT is the continued drop in the cost of wireless modem attached to small devices. The network effect is profound.
Let’s say that about 5% of a device cost is attributable to the wireless modem. If the device is a smartphone that costs $700, then allocating 5% of that for the wireless modem would be $35. That all seems reasonable. Now, let’s take this down by a factor of 10 or a device that costs $70. Then, the wireless modem cost has to be around 5% x $70 or $3.50. This is the kind of price reduction that we are seeing being developed for the market in the not too distant future.
However, when the cost of the device is $5, then you’d need the wireless modem to cost no more than $5 x 5% or $.25 which is just about impossible to manufacture today. But, at some point, small wireless modems may be available at such a low cost which makes the market opportunity much greater. While I can’t prove this, I would estimate that a 10x reduction in the price of a wireless modem results in an increase of 100x in market opportunity.
But something else happens in the world of IoT: it gets to the point that you can put wireless modems just about everywhere, and when we reach that point, we will have many many benefits.
But will also have a situation where the benefits of IoT butts up against privacy. My wife and I watched an interesting movie on Netflix recently — The Circle starring Tom Hanks as The Circle CEO Eamon Bailey and Emma Watson as market enthusiast Mae Holland. The story shows what can happen if you get the cost of a wireless modem so low that you can put it with small digital video cameras and place them everywhere and put the entire network of remote video cameras online.
In the beginning, there a ‘gee whiz’ kind of reaction and “Doesn’t that look fabulous!” The Circle promotes total transparency under the pretext that all information should be open to allow truth. In fact, total transparency is used to collect lots of information about people that can be sold to others. They call the network SeeChange.
Mae gets on board with SeeChange and wears cameras and plants them around her apartment and in other locations. Her life then becomes to demonstrate the idea of “total transparency” hyped by Eamon. She goes through each day letting others see and monitor her life.
Ellar Coltrane plays her ex-boyfriend Mercer, who warns her that The Circle is evil and that she’s selling her privacy and her soul. Karen Gillan is her friend Annie who hires Mae to work for The Circle, only to become jealous when Eamon selects Mae to demonstrate SeeChange.
Of course, you can guess where this is headed. Too much information begins to violate privacy. And, The Circle folks, led by Mae, decides to take the real-time imaging further to mix it with social networking and search to enable the system to find criminals in real time. That makes it look even more wonderful. Then, someone wants to see if the system can find Mercer who wants to live off the grid. People zoom on his hideout taking real-time video that is displayed to the public. The network zeroes in on him. He tries to escape and, as a result, crashes his car and is killed.
Now, what’s interesting here is not the storyline which is a bit farfetched but the idea of a world of small distributed but connected (video and data capturing) devices is now upon us and it’s called IoT. Oh, by the way, no one ever discusses in the movie about how all these wonderful remote wireless video cameras are going to be powered. The implication was they were all self-contained, but they don’t show any solar panels so the idea makes for a good movie but couldn’t ever really happen in real life.
But, what can and is happening is the creation of very small wireless modems, some with small batteries that can be recharged quickly, along with measurement capability all hooked up into a network that is online.
There is one actual research project called the ICARUS in Germany that is so interesting that it’s the subject of next week’s column. You’ll find it pretty amazing, and, quite frankly doing some things that take wireless device networking to a whole new level.
In summary, the drop in the price of wireless modems along with the vast expanse of wireless communication networks enables enterprises to consider keeping track of things that were not possible to even envision just a few short years ago. The benefits from such capabilities abound. However, along with these new interconnections of millions of small devices comes with it the responsibility to consider the effect on privacy — either the enterprise’s privacy as a whole or the privacy of the employees either at work, at home or out in public.
We have a long way to go to work through new areas of what privacy means in the evermore connected worlds. I would suspect that if you talked with people 20 or 30 years ago and asked them what they thought about putting live TV cameras on streets, around corners, in grocery stores, airports and just about in every public area that they would consider that an invasion of privacy. Now, such TV images are revered because it helped catch the terrorist bombers at the Boston Marathon and other crimes without having to give up a great deal of privacy. And, your cell phone is basically a personalized wireless monitor since the location can be tracked and presented in a court of law.
So, while the story in The Circle may have been a bit farfetched and focused more on the nature of social networking and privacy, it also offered up — perhaps without the screen writer’s intention — a world in which millions of small devices that can capture images and others that capture other digital information is now upon us. There will likely be a number of courts cases to challenge and need for new laws to be created. But, overall, we’re going to see the benefits far outweigh the detriments. We’ll create laws to ensure that most of our privacy will be protected. But, enterprises will get to operate more cost-effectively and our society will be more protected as a result of our living in a world of IoT. So, while The Circle wasn’t a very good movie (for lots of reasons), it does offer a glimpse of how we are migrating into a world of millions of small devices all connected into networks that help solve given problems.
