Can IOT Revive The Connected Homes Opportunity?

In 2011, I authored the Intellect (now TechUK) report on Connected Homes, for the UK. Among the key findings were (1) that while this is a massive opportunity, the inherent cross-industry environment creates a number of challenges, from standards, to service optimisation, to ownership; (2) that the infrastructure in most homes will need to be upgraded – with challenges to networks, physical infrastructure, and home equipment; and finally (3) a more pervasive level of connectivity may be required for essential services such as healthcare and education, so as not to exacerbate the digital divide. 

What did surprise me during the course of that research was the complete absence of any kind of linkage between property prices / value and home technology or connected services. Whether it was real estate brokers, property portals, or architects and developers, there were no real incentive to put in better infrastructure or technology, as there was no perceived value (i.e. reflected in a correspondingly higher price). 

As the population ages, and with a bigger challenge of care for the elderly, I fully expect this link to get established in future, and was happy to see at least one article commenting on the lack of connectivity in high value properties. Arguably, this is just anecdotal, and a one-off, but it’s a start! 

More excitingly, we are seeing a re-emergence of connected services with the rapid evolution of the sensor economy and the Internet of Things. 

At the Mobile World Congress in Barcelona, in February, it was noteworthy that Telcos, especially the Asian ones, were deeply committed to the sensor economy. Having lost out on OTT services in the last spurt of innovation, Telcos seem to have recognised that expecting to get paid because of their structural role in the ecosystem is a bad strategy (notwithstanding the recent Netflix deal). This time around, elcos are participating more wholeheartedly in the service delivery. From smart t-shirts to track your heartbeat to birthing systems for farm animals, and from home-automation to education, a slew of services are now being provided from telcos which put the user at the core and keep the technology under the hood. NTT Docomo reported that they are now making over $10bn per year from non-traditional (Voice/ Text) services.

Cow BirthingIt’s not just telecoms, but a number of other businesses are now eyeing the home for connected services. Insurance companies, utility firms and technology majors such as Google (Nest, TV), Apple (TV) and others have their eye on your home. The Internet of Things has the potential to democratise a lot of these services, so that small, 3rd party companies can build simple and innovative solutions with access to devices and data. 

Personal and home technology will be the next battleground, therefore, and may be the connected home will finally become a reality. 

 

 

10 Talking Points From the Mobile World Congress

1. Wearables are evolving fast. 

Almost as visible as the new smartphones, was the Samsung Gear 2 smart watches.  There has been much talk about wearables, but this is a big step forward for a number of reasons. The device features are themselves noteworthy, for example the curved AMOLED 1.84 inch screen. But also the focus on healthcare and wellbeing is clearly taking on the market so far dominated by Fitbit and JawBone. The changeable straps provide a nod to fashion, and under the hood, it has a Tizen Operating system, which itself comes from a family tree of operating system innovation from Nokia, Intel, Samsung and the Linux foundation.

The programmability of the device will no doubt provide a slew of clever applications, which will take away the oh so onerous effort of taking your phone out to answer calls, check emails, or even do video calls. The Gear Neo 2 has a 2 MP camera and even a remote for your TV. 

It doesn’t stop there. We also saw t-shirts that can monitor heartbeats while you run, and smart gloves from Fujitsu with which you can point to things and using AR glasses, get more information about them. The Sony smartbands are certainly eye-catchinly stylish. 

But for me, the next wave of innovations will be the one to watch – when the open systems in wearable devices allow swarms of innovative developers to create entirely new ways to use wearables, in ways not even thought of yet. 

 

2. Ecosystem Conference 

Ginny Rometty, the IBM CEO, accurately called this an ‘ecosystem conference, more than a mobile conference’. Increasingly, it’s hard to separate the components. Cloud, Mobile, hardware and software, middle layer and front end tools, wearables, watchables, eatables, sensors, all the boundaries are getting blurry. Moreover, the value delivery is via the ecosystem, rather than any individual layer. 

This means that solutions thinking needs to span the ecosystem and not focus on any one layer alone. This in turn requires a number of related competencies to be brought together in one place. 

Seems like an obvious point but you’d be surprised how uncommon this common-sense is. 

 

3. Telcos in the services game

Telcos have been the perennial bridesmaids in the IP enabled world. All the value created by World Wide Web, VOIP, messaging, OTT TV and other innovations have stood on the shoulders of telecom networks, yet Telcos have seen little of the value. A part of the reason could well be that Telcos have wanted to get rewarded for being structural enablers, rather than end-service providers. 

The penny seems to have dropped, though as evidenced by the number of Telecom providers, especially in the APAC market, who have end user services built around innovative and mature smart systems. These are, importantly, not sold as technology but as services. NTT has a “Cow Birthing Service” built around monitoring body temperatures of pregnant animals, and alerting the right time for delivery. 

 

4. Old Media left behind?

Tucked between the presentation from Cisco and Shazaam, was a presentation from Bob Bakish, from Viacom. It was a very good presentation underpinned by a well thought-through content strategy, yet it felt like we were being dragged back into the past after being shown a vision of the future. 

I couldn’t put my finger on it for a while, and then it dawned on me. This was a good old-media presentation but it missed the transformation to services, analytics and interactive thinking which now characterises most successful and evolving digital media businesses of today, such as Netflix. 

 

5. Dealing with intelligent worlds 

It is no longer a big shout to suggest that the world is becoming more smart, programmable and intelligent. But perhaps our ability to deal with smarter environments is not yet developed to the extent required. This could impact privacy, security and many other areas. 

It could also make a difference to how well we’re able to extract the maximum value of our smart surroundings. Mark Zuckerberg spoke about the need to connect the whole planet, and called out the fact that many people don’t see the value of the Internet, so they don’t know why they should invest. Similarly, how many of us are really equipped to deal with a smart city or a smart environment in the optimal way? 

 

6. Yet another phone? 

Samsung switched strategies to launch the S5 at the MWC. There was also the wearables, and a few other interesting phones – the Yotaphone and the BlackPhone for starters. But there seems to be a level of fatigue with more marginal improvements. We’re going to need some truly disruptive innovation to get excited about smartphones again. 

The S5 has biometrics, the latest connectivity tools, and more megapixels than you can count on your fingers (16 to be precise). The most interesting feature of the S5 may be it’s power saving feature – when the phone is down to the last 10% energy, it has the option of switching to black and white and shutting down a lot of power consuming services, to extend the battery life by a few hours. 

 

7. Shazaam’s next trick. 

It could well be Shazaam that changes the TV advertising landscape going forward. Having solved the “what’s that song?” problem, and having turned it’s attentions to identifying television program, Shazaam is now offering a way of engaging with ads. When the app recognises the advertising, it offers ways in which you can engage with the ad – through a number of ways, over the phone. 

By ensuring that it is connected to the advertising on TV, there is a clear element of triggering the engagement. A number of questions will still need to be addressed, but by making it easier for consumers to engage, which is the problem Shazaam solves, this could be the way forward for interactive advertising. 

 

8. Innovation & Value 

There is much talk about innovation in the mobile environment in general, and especially at events like the MWC. But it’s harder to identify where the real value lies, versus where there is just an interesting app. Messaging may not be new and exciting, but continues to attract gravity defying valuations. What is innovative about mobile messaging in 2014? Yet, some 200 million (400 m if you go by Whatsapps December announcements) are using the service every month. 

The trick may be in simplicity. Whatsapp does not try to do anything apart from helping you message and talk to your friends and it doesn’t get in the way of the communication. Much like the early Twitter. The question of course is what happens now and how do you monitise this? 

Jan Koum, the founder suggested that Whatsapp will go after voice, with the same simplicity and customer focus. Who knows, may be video is next? Skype beware! 

Meanwhile other clever apps like CamMe (use a hand gesture to take better selfies) and Brewster (combine all your contacts), and Blippar (augmented reality using Google Glass and phone) made headlines. Their commercial value remains to be seen. 

 

9. Marginal innovation in payments 

I did go to the MWC hoping to get a glimpse of the future of payments. But I came back having witnessed only marginal innovations and the industry essentially shuffling it’s feet, waiting for a big move from somebody. 

That somebody might be Apple, who have over half a billion iTunes users with credit card information, an app to enable purchases through this environment (Apple Store App), about $150 bn in cash reserves, and some pending hardware patents for payment related areas. But of course this is not an MWC story, as Apple were only there in spirit. 

 

10. Architectures not clear yet 

John Chambers spoke about the critical need to get the architecture right, in the new world of digital services. The challenges is that as new technologies give rise to newer innovations and as sensors, wearables, mobile and web technologies collide to create new ideas, it’s quite hard to figure out what this architecture should be. Clearly something scalable, modular, service oriented, and capable of serving and receiving information from this array of end points is a must. And to bind all of this to some enterprise grade system of record. Easier said than done, methinks.