As the cost of computing continues to drop, adding ‘smarts’ to everyday objects is moving from a technical curiosity to a compelling, urgent business need. Every object that consumes power will eventually become smart; and in a world of pervasive connectivity, every object that is smart will eventually become connected.
This is because when we make an object smart we are able to gain a multitude of benefits, including the ability to:
• Remotely identify it as a unique object
• Remotely monitor its status and condition
• Understand the conditions of its surrounding environment (remote sensing)
• Give it commands (remote control)
• Link it with specific applications to enable additional functionality
• Have it trigger information and actions
• Aggregate data from a multitude of objects
• …and many more
The interesting feature of these benefits is that they follow the economics of virtual, not physical, goods – like software. These are very different, because while producing the first copy of a virtual good is very expensive, subsequent copies are essentially free. This means that as you scale up, very significant value can be created with little cost – a clear improvement to the company’s bottom line.
To understand this effect, consider WebKinz. These plush animals are not objects I would call ‘smart’, because the only capability added to them is a ‘special ID code’ written on a cardboard slip. However, this ‘special code’ can be redeemed in the WebKinz website, transforming the plush toy into the ‘physical representation of a virtual pet’, which is extremely engaging for children as they can play with it. Of course, this makes us parents pay $20.00 US instead of $10.00 US for it!
As we deal with intelligent, connected objects and go up the scale of capabilities described above, more and more of the value of the individual object becomes virtual, and therefore linked to the same economics. With constant pressure to differentiate and improve profitability, companies are compelled to add these ‘virtual benefits’ to their products.
I believe that in the next few years we will see an explosion of smart objects, because four key elements are falling into place:
The cost of making an object ‘smart’ continues to drop
The cost of adding ‘smarts’ has reached ‘impulse buy’ levels. Objects can now be ‘passively connected’ for less than $1.00 US or ‘actively connected’ for less than $5.00 US. ‘Passively connected’ objects are objects that need to be polled, or queried, externally – they cannot initiate an action on their own (an example is an RFID tag). ‘Actively connected’ objects, on the other hand, are able to trigger events on their own and send them through a network.
The Cloud provides back-end support
The rise of the Cloud is the perfect complement to smart objects, because it allows a model where objects do very simple things (like sending and receiving basic signals), while all the sophisticated analytics, storage and user interaction is driven via capabilities in the Cloud.
Mobile smartphones with apps are the front-end
As people interact with objects, they will not want to do so exclusively through their computers – and it is too costly to add user interfaces directly to every smart object. This makes mobile smartphones with purpose-written apps perfect interaction devices.
Wireless connectivity and new edge technologies are pervasive
In developed countries, the Internet reach is everywhere – either through WiFi or cellular data. Traditionally, though, the ‘smarts’ required for an object to connect directly to the Internet have been expensive and require end-user configuration (cellular activation, SSID configuration for WiFi, etc). For devices to connect massively, a new type of network is needed – one that is simple enough to be deployed at a very low cost and at the same time allows ‘plug and play’ functionality with zero configuration.
Promising candidates are appearing on the scene, many by extending the IEEE 802.15.4 standard (ZigBee, ISA100.11a, WirelessHART, and MiWi are examples) and defining standards to allow connectivity between devices. If past history is a predictor of the future, though, the final standard will be in all likelihood established by a few companies with killer applications that will achieve critical mass in the market – and not by consensus.
The creation of this “edge network” layer is a key element to watch, because it can follow two very different paths: it can follow an open path, like the Internet or the Web which became public spaces; or it can follow a closed path, where it becomes owned mostly by one company, which will then wield tremendous power (think Facebook and social networking).
These four elements have reached the point where solutions are technically possible and economically feasible, so the competitive race is on. Soon you will have thousands of companies selling you the advantages of their new ‘smart’ objects.
There is no question that this mega-trend will change the world as we know it. The only question is, how will you take advantage of it?
Roberto Moctezuma is currently an angel investor and board member in two startups: Suagi.com, an innovative startup focused on changing the nature of social video; and Voxofon.com, an emerging company in the mobile telecommunications market. He also provides business strategy advice and mentoring to startups as part of the Advisory Board at the Houston Technology Center - with a focus on the IT sector. He is very interested in how technology is shaping our future and believes in improving our world through the power of gaming and education.