|Issue:||North America I 2016|
|Topic:||The Internet of Things, coming to an iIndustry nNear yYou|
Macario Namie, Vice President – Strategy, Jasper
Macario Namie joined Jasper in 2007 and currently leads corporate strategy efforts, including ecosystem development. Prior to this role, Macario spent 8 years leading marketing, responsible for product marketing, corporate marketing, field marketing, and demand generation. Macario brings over 18 years in marketing Software-as-a-Service enterprise applications.
Prior to Jasper, Macario led Worldwide Product Marketing at WebEx, the leader in on-demand collaborative solutions, where he was responsible for solution definition and execution of go-to-market plans for the entire WebEx product portfolio. Macario also held senior roles at ePeople and Lycos.
Macario Namie holds an B.A. from the University of California, Berkeley.
It is no surprise that North America, with its long established and robust telecommunications infrastructure, along with its service industry work ethic, is emerging as a leader in the development of industries that are reinventing themselves to capitalize on IoT. Take what is happening today in automotive manufacturing where, more than any other industry, manufacturers understand that extending the digital world into the physical world unlocks added value for customers and lucrative new sources of revenue
The Internet of Things (IoT) is growing, but it isn’t the huge numbers of connected devices that we should be getting excited about. You see, the Internet of Things is not about ‘things’, it’s about service. When every product is connected to the Internet, it fundamentally changes the way a company interacts with its customers and how revenue is generated.
In an IoT business, one-time product sales become a thing of the past. With IoT, when products leave the store, showroom or warehouse, the manufacturer gains the opportunity to deliver ongoing services such as the rapid detection and resolution of issues, performance optimization, rapid upgrades and the introduction of new capabilities. Along with adding value to the customer experience, all of these connected services are potential revenue channels for the manufacturer, which finds itself transformed from a product company into a connected services company.
It is no surprise that North America, with its long established and robust telecommunications infrastructure, along with its service industry work ethic, is emerging as a leader in the development of industries that are reinventing themselves to capitalize on IoT. Take what is happening today in automotive manufacturing where, more than any other industry, manufacturers understand that extending the digital world into the physical world unlocks added value for customers and lucrative new sources of revenue.
A smart car for everyone
Last year, General Motors (GM) announced that all new vehicles in the US would ship with 4G-LTE embedded, and that it expects to make $350 million in additional profit over the next three years from IoT services. As a result, GM no longer just sells cars – it sells a platform for connected services. GM’s connected car strategy includes – but is not limited to – a Chevy app store for downloading applications to vehicle dashboard screens, safety & security services via OnStar, navigation services, and other exclusive apps like Vehicle Health for vehicle performance information.
Phil Abram, Chief Infotainment Officer at GM sums it up: “The Internet of Things creates a playground for us, a great opportunity to create new services and continue to deliver them to customers even after they’ve purchased the vehicle. This ongoing interaction with the customer is one of the biggest changes is the industry, and it will continue to get better over time.”
Today, connectivity is rapidly becoming a standard across vehicles, which means IoT is making further inroads into our daily lives. Although we tend to experience the connected car most commonly through features like satellite radio, infotainment console apps and navigation, IoT is also improving automobile safety in leaps and bounds. For example, GM is using its networked OnStar system to actively analyze vehicles’ internal components and notify their drivers when preventative maintenance is recommended. That means the connected car will inform its driver of, say, a specific filter that’s becoming clogged before it causes a serious problem. This marks a revolutionary shift from diagnostics to prognostics.
Or maybe you’re taxiing down the runway when you realize that you’ve left the car unlocked in the airport parking lot? OnStar also allows you to check on your vehicle and take corrective action – like remotely locking the doors of your connected car – from anywhere in the world using your smartphone. This delivers not only additional security, but also peace of mind.
In the same way that OnStar attempts to predict potential problems by monitoring real-world vehicle conditions, insurance companies have seized upon IoT as a way to tailor their policies to drivers’ actual behavior. Traditionally, they’ve used historical data coupled with abstracted, proxy-based risk assessment models to determine policy prices. However, people who share similar characteristics – age, total annual mileage, typical drive times – don’t necessarily behave in the same way. Thanks to smart tracking devices and telematics systems, insurance providers are now able to access real-time data on individual driving behavior and determine risk on a case-by-case basis. This voluntary usage-based insurance (UBI) model saves good drivers money on their policies while encouraging less attentive drivers to improve.
In fact, initiatives like the Mobiliz program are helping to de-stigmatize the oft-maligned drivers in the 16- to 24-year-old age bracket. Data collected in real time via connected devices installed on their vehicles is delivered to Baseline Telematics, which crunches stats such as GPS positioning, vehicle usage information, and driving patterns. This data is relayed to the insurance company, which uses it to assign a rate appropriate to that individual driver. This information is also shared with these young drivers on a regular basis through a private portal or weekly e-mail. It has been shown that young drivers are more receptive to this sort of feedback on their strengths and areas for improvement than they are to criticism from their parents.
Many of the IoT enabled services in connected cars are targeted directly on consumers, but there are many B2B applications, where IoT is having a profound impact on entire industries. Just ask the farmer.
Farmers probably aren’t the first group of people you’d expect to be among early adopters of technology. But for many years now they’ve been relying on IoT to battle pests, maximize irrigation, and increase crop yields to help feed our planet’s growing population. There’s even a name for it: precision agriculture.
Take California-based Topcon Precision Agriculture. This specialized business unit of Topcon Positioning Systems works with heavy-equipment manufacturers to install embedded telematics systems into farm equipment. This enables farmers to, among other things, track the productivity and performance of their equipment over time. They can then use that information to estimate repair and replacement costs — crucial budgeting variables when your profitability hinges on something as fickle as the weather. By optimizing farming for weather conditions farmers are able to increase their crop yields, leading not only to greater profit, but also helping to feed our growing population.
Another example of IoT’s impact on agricultural producers is Semios, a Vancouver-based company, which is using IoT to help growers adopt healthier alternatives to chemical pesticides. They equip growers with a network of complementary devices such as pheromone dispensers, automated traps, soil moisture meters, moisture monitoring, and weather stations. These devices then work together to keep an eye on insect levels and release pheromones—the natural language of insects—into the air at meticulously controlled intervals and concentrations, thereby disrupting the pests’ communication pathways and keeps them from producing offspring which can ruin crops.
Yet farmers don’t deal in produce alone. Livestock farmers are using cloud-based IoT devices from companies such as Motech Moocall to record characteristics like the pedigree, birth date, weight and growth of their animals. Similar to a Fitbit for livestock, these devices work with scales and other measuring instruments to update the animals’ stats regularly and automatically. Farmers can use the data to keep close tabs on the health of their herd. This info can even be utilized to determine the market value of the animal and the processed meat. Each data-driven step has the potential to bring huge gains in efficiency and productivity along the way.
Smart Water, Smart Electricity
IoT isn’t just found on the farm or on the road. It’s also underground and overhead. Utility companies all over the world are integrating IoT solutions into their infrastructure to cut costs, increase efficiency, and conserve precious resources.
A few years ago, Peterborough Utilities Group in Ontario, Canada began installing smart switches, relays, and revenue-metering equipment throughout its distribution network. At short but consistent intervals these devices collect and relay readings on temperature, electrical current, set points, and board status. This enables the company to adapt almost instantly to different usage patterns and create dynamic rate plans for their users.
The effect this has is twofold. First, customers save money through efficiency optimizations that are taking place before they even turn on their tap or plug into an outlet. And second, Peterborough has been able to streamline its in-house operations through cost-saving automation and remote management.
A little more than 100 miles away in the same Canadian province, SMART Watering Systems (SWS) is working along those lines too. For starters, it’s replacing its outdated radio communication network with an IoT backbone, saving its employees from the unreliable back-and-forth information relays of the past. IoT has also allowed SWS to deploy networked weather-monitoring devices that tell massive landscape irrigation systems to switch off when they’re not needed, helping to conserve critical and scarce resources. On the consumer scale, IoT monitors can remotely diagnose problems in the field and supply SWS with up-to-the-minute information on customers’ water consumption. That makes SWS more responsive to any issues that could affect service, and it allows the company to inform its customers of specific steps they can take to conserve water.
Just like the telematics systems embedded in farm machinery or the prognostic combination of hardware and software in connected cars, IoT is a vital tool that is transforming the utilities sector.
Whether a highly visible part of your everyday life, or an unseen element working behind the scenes to improve the lives of the world’s population, IoT’s impact is everywhere – and it’s coming to an industry near you.