Jessica Groopman is an industry analyst with Altimeter Group, a Prophet company, where she conducts research on disruptive technologies, specializing in the Internet of Things. She is a regular contributor to numerous blogs and media outlets, and a contributing member of FC Business Intelligence’s IoT Nexus Advisory Board and the International IoT Council. The views expressed are the author’s own, and do not necessarily represent the views of Qualcomm.
We can find a lot of information on the Internet—arguably more than any single creation in our history. We can search for just about anything: Where can I get a quality New York bagel in Tangier? How many people live on Easter Island? What exactly is “dark matter,” and why are physicists so obsessed with it? You can even read a text message, check the baseball score, or map the quickest bike route out of town right from your wrist.
So now what do we do?
The Internet of Things (IoT) puts our growing trough of information—of data—to good use. It empowers people to take action, to do, control, conserve, monitor, and accomplish. If the Internet is the foundation of the Age of Information, then the IoT is the bedrock of the Age of Enablement. As was the case with the Internet, widespread adoption will have ripple effects on our day-to-day interactions with one another, and with society at large.
This change all starts with the individual, with sorting out what enablement actually looks like from where the average person sits. Recent Altimeter research identified the primary use cases for the consumer-facing IoT, each of which “enables” various elements of the user experience. This takes on several forms, including rewards (a nearby beacon leads you to a coupon), information (a well-timed weather report warns you to grab an umbrella), and service (a busted tail light alerts you to replace it).
But much of the IoE we see today is about facilitation. These schemes—often most celebrated for their “wow” factor—allow consumers to accomplish tasks more seamlessly through the use of connected products. Some examples include turning on your coffee pot from bed, feeding the dog from your smartphone when you’re running late, unlocking a hotel room with your wearable, controlling lighting through gestures, or reordering paper towels when you’re running low.
How Data Changes Your Experience
By digitizing our physical world in this way, we add data streams to previously unconnected things and environments. The data in turn impact our relationships with products—how we interact with them, how they interact with us, and how these interactions are tracked, stored, and analyzed. By extension, this also influences the ways businesses engage us, and, by a greater (less obvious) extension, how we may be interacting with an entire ecosystem of gadgets, services, and companies in the future.
Let’s take one example from one product in one industry: the connected car. A driver may find the efficiencies, accountability, and service propositions of such a car quite attractive. But what does this new realm of product interaction actually mean?
I’ll explain: I can own a car, but who owns my behavioral attributes within that car? Who owns my location data? Who can access it? What are the doing with it? Today, my identity as a driver is tied to my driver’s license. But with sensors now tracking how I drive, suddenly my identity as a driver becomes more complex.
In this way, the IoT challenges and transforms our notions of identity ownership, product ownership, consent, and privacy. How much control do I have in this data collection? This is where the IoT begins to breed questions about its role in society and culture—and where it might turn existing business models on their heads.
Let’s stick with our connected car example to illustrate: In the hardware-software paradigm, a car’s life transforms. The manufacturer can deliver problem resolutions, services, upgrades, and even new features directly to the car through over-the-air updates. This is exactly what Tesla is doing—in fact, it recently resolved an issue on over 29,000 cars through a software update. (The company also crowdsources ideas for new features from drivers, some of which it implements across its fleets in this way.)
Short-term implications center around providing a better customer experience. But in the long term, thanks to advances in machine-learning and predictive technologies, our products may begin to “know” us intimately, which could increase their value to us over time.
This presents an entirely new paradigm for the manufacturer, as well. Whether making a car, cell phone, refrigerator, sound system, or other device, revenue typically relies on releasing new products and discontinuing service on old ones. (When the Apple iPhone 74+ comes out, the iPhone 73 inevitably begins its fall into obsolescence, and so on.) But is this sustainable in a connected world? Redesigning any product to have software, connectivity, and data-gathering components changes the very notion of the product. Rather than an endpoint, it becomes a vehicle for data (read: behaviors, services, innovations).
How Data Impacts Industry Dynamics
All this data also transforms how business entities interact with one another. Increasingly, the most effective business models are no longer parallel, competitive, or disparate, but integrated, cooperative, and interwoven.
Continuing with our connected-car scenario, the metrics produced therein can allow new, focused interactions between people, places, and things. For example, Taco Bell is sending ads to people via the Waze app, but only when they’re stopped at stoplights. Or, in a smart city, connected streetlights could alert drivers of the nearest parking spaces. From a sociological impact, the point here is not that this “small” data is being collected about me, but that more and more, companies are incentivized to work together and make use of this data
This becomes a dance among industries. Driver behavioral data may be sold to insurance companies. Media consumption data would go to media providers or retail partners for more targeted, hyper-local radio, advertising, and promotions. Malfunction or incident data could be shared with government services—as in the case of Europe’s new eCall initiative, in which sensors automatically report accidents to emergency and traffic services.
Yet, as data grows larger, more-profound questions emerge.
Insurance companies, for example, might use driving, medical, home-owner, and other data to model risk profiles of individuals, neighborhoods, communities. But what happens if aggregating this data, some public and some private, inadvertently identifies a concentration of high risk—say, of heart disease, car crashes, or in-home domestic violence? Would insurance rates rise in this area? Would they decrease in areas of lower risk? Would other metrics of value (real-estate or school systems, for example) rise or fall depending on the area’s data trends? And who is responsible for monitoring this?
As the IoT industry weighs innovation, opportunity, and potential on the one hand and security, privacy, and ethical risks on the other, all involved have a role in helping to answer these larger questions. Sifting through these scenarios, we can’t see the future. But what we can extrapolate is that our interactions with an increasingly connected world leave countless data trails. As digital connectivity spreads to all corners of our physical world, we must consider its impact not just in terms of momentary convenience, but in terms of our larger social contract.