Four Design Imperative for the Internet of Things

For my Innovations column in The Washington Post this week, I noted four critical issues holding back consumer adoption of the Internet of Things.

As Paul Nunes and I explain in Big Bang Disruption, transformative technologies must not only be better and cheaper than the products and services they replace, but also need to overcome consumer inertia.  That’s particularly so when the disruptor affects many industries, or when the worse and more expensive products are so familiar to consumers that they won’t replace them even for a better and cheaper alternative, at least not without strong incentives to do so.

Those incentives include life-changing new applications of the products.  In other words, the disruptor, to reach the rapid take off we refer to as the Big Bang, must do more than just replace existing and still-working products.  It must do so in a way that adds new functions and new applications that the existing technology can’t possibly duplicate.

Each of these characteristics is present in the emerging market for an Internet of Things, where everyday objects will be enhanced with some measure of computing power–processing, memory, and the ability to communicate over the Internet with other devices, sending and receiving data (often very small amounts of data) through the cloud.  When fully realized, the IoT has the potential to dramatically remake the supply chains for many consumer and industrial goods, revolutionizing every step from design to sourcing to manufacturing, distribution, retailing, and service.

And it will do so across industries, affecting financial services, manufacturing, energy, consumer goods, agriculture, and more.

But so far, the IoT has made only incremental progress.  What’s holding back the Big Bang?

In the Post article, I identify four obstacles–some technical, some legal–that are keeping consumers from jumping fully on-board with connected, smart homes, wearable health and fitness, and other high-potential IoT applications.   If developers and their investors want to see big returns and jump-start the connected device revolution, they’ll first have to design solutions for each:

  • Interoperability – As is typical with emerging technologies, every Internet of Things vendor hopes to establish itself as the industry standard for interactions with other networks and other products. Competing industry groups have also sprouted up, hoping to eliminate incompatibilities by offering an open, neutral set of communications and data exchange rules anyone can follow. Some Internet of Things vendors are trying to build products that follow everyone’s standards, while others are leaving the problem to third party developers. The standards war will undoubtedly be resolved, but in the interim consumers are understandably hesitant to make big investments in new systems.
  • Mobility – Internet of Things devices may not need to communicate large volumes of data, but the sheer number of connected items and their need for constant interaction can’t be supported even with today’s fastest 4G LTE mobile networks. That’s one reason mobile providers and their partners are investing billions in next-generation 5G networks, which will increase network speed and capacity by orders of magnitude, optimizing performance for both the close quarters of your home and the potential range of autonomous vehicles on the road and in the air.  In the United States, both Verizon and AT&T have already announced tests of 5G technology.  But the new networks require more and different ranges of radio frequencies, which only the FCC can allocate.
  • Invisibility – Sleep Number isn’t actually the first company to offer a smart bed; they’re just the first to build the sensors right into the mattress. Earlier efforts required users to remember to wear separate devices that were uncomfortable to sleep with or extra equipment that had to be installed under an existing “dumb” mattress.  To work for all consumers, technologies that transform markets have to become invisible — just part of the scenery. So Sleep Number’s mainstreaming of the disruptive technology is a necessary condition for mass adoption.  Ironically, the more disruptive the technology is, the sooner it tends to disappear.
  • Security — Already, a few early products with inadequate protection have led to some embarrassing security breaches, including a hacker who gained control over a “smart” baby monitor to talk to the baby. The Federal Trade Commission and other regulators are already circling the emerging industry, threatening pre-emptive action.  But as Kohlenberger points out, a widely-deployed Internet of Things will generate tremendous improvements in health outcomes, traffic fatalities and home security, among others. If lawmakers overreact to the Internet of Things’ growing pains, it may unintentionally delay both the development and adoption of technology that will actually improve the safety and security of activities that today rely on fallible human operators.

As these issues are resolved, the Internet of Things is likely to experience the same kind of dramatic takeoff that followed the introduction a few years ago of smartphones that users actually enjoyed owning.  Once the value proposition and technical obstacles are overcome, if history is any guide, consumer adoption for the Internet of Things will happen on an expedited schedule.

In other words, watch for the bang.