1. The World of IoT Data
The purpose of IoT is to get data. Data, as they say, is the oil of the new economy. Nobody wants a smart device; they want the data from the device. In the future, there’s going to be much more data and it’ll be cheaper too. The important question to ask is what is the data doing to value chains?
We’re seeing a significant disruption of value chains via a transfer of power to the end-user, with an associated dissipation or weakening of the power of the brands of large companies. With IoT, it’s all about creating a new experience for your user, your customer, if you’re a business. Or it’s about creating a new business model that wasn’t possible previously. And what we’re seeing are some areas where this is really accelerating and it’s having a fundamental effect on these value chains.
Let’s make it real and look at two examples: vending machines and healthcare.
Smart vending machines
They’ve been around for ages, but we are now starting to see smart vending machines come to market. Smart vending machines are being built around a personalized experience. For example, let’s take Costa Express with their vending machines, they call it a barista without a beard. Costa offer a personalized experience to every individual customer delivered through a machine and it’s much better than, for instance, getting your name written on the side of a cup. The Costa Express machines are not found in Costa shops, they’re found in other people’s premises.
Through these smart vending machines, Costa Express is mining data collected about your experience; what you’re doing, the choices that you’re making on the types of coffee, the additives you put in the coffee, when you have the coffee, the size etc. They’re using this data so they can proactively offer you differentiated services. The machine’s screen reconfigures itself; they send you messages, they link to you via the app that gives you your loyalty points, so they know who you are. Here, in this case, you’ve got the person who makes the coffee interacting directly with the consumer without, one intermediary step, which is the retailer. Secondly, what you’ve got is you are applying the principles of internet 1.0 to IoT.
What we’re now seeing is the opportunity to data-mine our interaction as human beings with billions of physical things, not just digital sites. As more and more physical things become connected, we now can see an exponentially large capability to use that data to create new disruptive business models to disintermediate supply chains and deliver previously undreamt-of experiences.
Internet of Medical Things (IoMT)
What is IoMT? The Internet of Medical Things (IoMT) describes a connected network of physical objects designed for medical purposes; “Medical Things” embedded with sensors and software applications collect, analyse and transmit information over-the-air to the cloud and a wider infrastructure of health systems and services. Learn more about IoMT.
The development and uptake of IoMT has been accelerated by COVID. The traditional value chain or supply chain, if you like, in the health industry is self-diagnosis. For example, I’ve not been feeling great for a few days, so I phone up my doctor and wait to get an appointment. Nowadays you can do this over the phone or video. And the process repeats each time a symptom or health issue occurs.
What we’re seeing now with IoMT, is people producing this new phase of healthcare wearables. These are very advanced pieces of specialized hardware that interact with our skin and what’s happening in our body, and also other devices that are in the home. And the data doesn’t go to your GP, the data goes to a company that uses artificial intelligence to analyse what might be going on in your body. And they’re accessing data from institutions at the far end of the value chain, like the Mayo Clinic, or university teaching hospitals. A good example of this is a company called Biofourmis, who are doing exactly this. Their goal is to prevent the disease from happening in the first place. They’re completely disintermediating the traditional supply chain of healthcare and offering you a choice as a consumer. They are then working with the pharmaceutical companies so they can create drugs for the conditions that they’re seeing happening in real-time.
Now, obviously this has huge implications on the current environment like COVID and things like that, where you wear a wearable and you could get advanced notification of symptoms, especially given that one in three people can be asymptomatic.
Data is going to completely change the competitive landscape for companies. That’s really where we at Eseye advise you should really start by first asking ‘can I be disintermediated?’ or ‘what is the experience to the consumer I’d like to deliver?’ or ‘can I use this as an option to collapse the value chain?’
Start there, think about what needs to be done and then decide what data you need to measure. Don’t just capture data for data’s sake. This disruption, the ability to mine people’s interactions with physical objects rather than digital websites is going to be a much bigger disruptive catalyst than the first wave of the internet was starting in the early ’90s. Because now we’re talking about 50 billion things, not just a few million websites. We’re not just talking about monetizing your search behaviour. Big, big changes are coming and the smart companies are at the forefront looking at IoT thinking, how do I collect data and how do I get connectivity into a device so that I can use that data.
2. The Importance of IoT Hardware
There are millions of IoT devices you can buy; trackers, medical devices and some plug and play IoT devices – put a SIM card in it, and you’re connected. But that delivers a generic consumer experience, not a differentiated consumer experience. We find the leading companies start off by imagining the art of the possible of what they could create, they then say, ‘okay, what type of hardware would I need to do that?’
We’re talking about edge aggregation devices that not only have logic in them, but they’re also programmable. They communicate with multiple sensors. What you very rapidly realize is the device is unique to the use case.
The Costa Express coffee vending machine is enabled by 90 sensors inside. It’s been custom designed to deliver that experience, and it’s got an edge aggregation device, in this case, provided by Eseye.
Truly great IoT requires custom hardware.
I’m reminded of Marc Andreessen’s famous phrase: “Software eats hardware.” However, it’s not about ‘hardware is old-fashioned’, it’s all about the cloud and SaaS. But when it comes to IoT, it’s the other way round. It’s all about hardware.
At Eseye, 80% of our 2,000 customers came to us because they had a failed IoT project. More than 80% of that was because the hardware didn’t do what they intended it to. It’s called hardware for a reason, it’s really hard.
People don’t want to get into IoT hardware design, it requires asking questions like ‘How do you design the sensors in such a way that you only collect a certain amount of data? which data do you back hold? and how do you get your devices certified onto mobile network operators?’ It works differently in the US than it does in Brazil or Europe.
Hardware is fundamental to delivering the experience, so the big question is, who creates the hardware? Who designs the hardware? And right now, it’s a massively fragmented ecosystem. When enterprises are considering IoT projects, one of the questions they have to ask themselves is, ‘how do I get my IoT hardware designed around the use case?’
70 to 80% of all IoT projects fail, and they often fail on the thing that everybody thinks is the easiest of all, the device. There are loads of them, thousands of them, I can just buy them. But it’s not as simple as that.
If you get it wrong and it doesn’t work, you will have to go back to the beginning and your business outcome collapses. That’s one of the reasons why at Eseye, we spend a lot of time doing IoT hardware design, as well as cellular connectivity. We work with our customers and people who we hope to be customers in the future by asking ‘what experience are you trying to deliver?’ We then, through IoT rapid prototyping, show the art of the possibilities regarding the experience. This means you don’t have to be hardware experts.
When you start your IoT project, step 1, do the Imagineering: the disintermediation of the supply chain, the delivery of a previously undreamt-of consumer experience. Then ask yourself, how can you create the hardware to deliver the experience? Unfortunately, that probably means some degree of custom work. But the work that you do upfront in the hardware design phase pays for itself many, many times over when it comes to the delivery of the business outcome and the speed at which you can deploy the devices.
The second prediction is that those with hardware skills and those that can design the business case around the experience will rise to prominence as we go forward, simply because there is no alternative but to design the device around the experience.
3. Smart Supply Chains
This third area is one that I think will play out a little bit in 2021, but more so in 2022-2023.
My third prediction is to do with disposable IoT. IoT devices that cost just a few dollars, you use them, and you throw them away. If you could do that if you could create a disposable, perhaps printed, IoT device, then you could look to tackle some major problems that today are huge issues for the world.
Let’s take food distribution. 30% of all food is thrown away. It’s a very complicated problem for multiple reasons. One of them is a lack of end-to-end supply chain visibility. You don’t know when the food is going out of temperature range or it can be in the supply chain for too long, so it’s gone past its sell-by date.
We’ve tried to solve this huge problem as a society. Overproduction of food at one end, which has issues to do with carbon gas production, especially if it’s meat and the farming, through to not enough food on the consumer end, or people throwing things away in their fridge because they just bought too much.
Due to advancements in multiple areas of technology, we now can print a battery or a circuit. You can print sensors because the sensors are a circuit. Now you can’t quite print a modem, but we are seeing the cost of the modems coming down significantly. They’re getting really slim, like a small scrabble piece. We’re also starting to see the emergence of the first generation of food labels.
We’re not talking about the Mars bar wrapper yet, but in an IoT supply chain, you could for example attach a food label to a box of crabs’ legs. If that food label was $5 or $6, which might be the target price we could see within six months, you could then do real-time tracking of the box, both location and temperature. This would give complete visibility of your product and its condition as it travels through the supply chain.
The idea is that you print the label when you create the box, you put the label on the box, you monitor it. I’m not talking about some of the early versions that use things like LoRa, which required specialist hardware and you could only measure things when the box went past the hardware. I’m talking about ubiquitous global cellular near 100% coverage across multiple countries, which of course is one of Eseye’s key value propositions, but some other components of this technology are important as particularly the printing side.
If the box gets too warm, you can intercept it where it is. Once the box gets to its destination, and by opening the box you break the circuit and throw the tag away. More advancements need to be made to prevent too much waste with recycling being a key issue. We need devices that decompose over a period, but the technology is still lacking in that area. That’s why I think it’s going to be a big thing in 2022/2023. I think the first devices are really going to be in the market in 2021.
Now, when you do that, you then start addressing some major societal issues like eliminating up to 30% of food in the global food supply chain. Now what we’re seeing is, IoT moving beyond traditional IoT where we’ve predicted for years there’s going to be 50 billion things by 2020. We’re now going to what’s being called massive IoT. Massive IoT is the 500 billion things and food tag tracking or vaccine tracking. As all the prices reduce, including data, it will be possible. We’re not quite there yet, but we’re getting very close.