The Internet Of Analytic Things

The latest edtion of the McKinsey Quarterly contains an interesting article by Michael Chui, Markus Löffler, and Roger Roberts on The Internet of Things (registration required or download PDF below).

The authors main point is that some years after Vint Cerf (one of the founders of the internet) began talking about 'The Internet of Things' - it is now a reality: that now "the physical world itself is becoming a type of information system".

"In what’s called the Internet of Things, sensors and actuators embedded in physical objects—from roadways to pacemakers—are linked through wired and wireless networks, often using the same Internet Protocol (IP) that connects the Internet. These networks churn out huge volumes of data that flow to computers for analysis."

The authors go on to say that:

"as more sensors enter our devices and clothing, we will have the ability to monitor the behavior of people, places and things through space and time, enabling such business applications as presence-based advertising."

This is just the tip of the iceberg. Just think of the analytic opportunities that the widespread use of IP connected sensors represents. Sensor data is a great chance for analytics to move further and faster into decision support - unteathered from your PC and mobile. Real time analysis will be the only way for us to turn the flow of data around us into information we can action.

What we are talking about here is a fundamental change in our environment. To be more precise: the linking of two worlds is happening. Our information world (mostly the internet) and our physical world (the stuff we do when the broadband is down).

So far, the internet has largely been something that we join as we want. No one forces you to have a Facebook page or LinkedIn profile. We choose to participate (or not) based on the value that participation gives us. The Internet of Things changes this. You will not be able to control the actions of most of the sensors in your enviroment - and that includes the flow of sensor data. So opting-out in the future is going to be a lot harder to do than simply switching off your computer or mobile phone.

Above: The authors see six distinct types of emerging applications, which fall in two broad categories: 'information and analysis' and 'automation and control'.

The biggest surprise to me was the impact that sensors are already starting to have on the pricing of products and services. It's a logical result I had not seen coming. Here are a couple of examples from the article:

"... insurance companies, for example, are offering to install location sensors in customers’ cars. That allows these companies to base the price of policies on how a car is driven as well as where it travels. Pricing can be customized to the actual risks of operating a vehicle rather than based on proxies such as a driver’s age, gender, or place of residence."

"In the aviation industry, sensor technologies are spurring new business models. Manufacturers of jet engines retail ownership of their products while charging airlines for the amount of thrust used."

The examples discussed are, one the whole, all positive as they deliver something most people would argue is good: reducing cost and risk or enhancing products and services. The darker side is less well addressed - and I'm not talking about the fact that in the near future my socks are going to announce to the world how many holes I have made in them or when was the last time I washed them!

Right: Forget about body scanners at our airports. Sensors have the potential to make the whole world one large scanner.

I guess it comes down to how comfortable you are in having Governments and Corporations knowing more about both your online and physical activities. Maybe now is a good time to lock and load and move back to Southwest Montana!

Do you remember those little cell-phone blockers you could buy at your local spy shop in the 1990s? I admit to owning one - just so I could stop cellphone calls some of my fellow cinema goers felt were vital to answer during film screenings.  I wonder if there is a smart entrepreneur out there who is already developing a way of disabling sensors in our immediate environment?

The McKinsey article is a very good overview of emerging sensor applications and worth reading. Here's the article to download.

Comments

[pcb suppliers]

Useful information shared..I am very pleased to study this article..Many thanks for giving us nice information.

[Lyndia]

What type of alarm system is it? Not the stkcier on the window, take a look at the keypad and the main panel circuit board.Once you have done that I can tell you how to change the code. Typically you will need the master code to change it so you may need to contact the realtor. There is a link to a Blogger blog on my website (in the archive) where I can easily answer your question.

[Johanna]

Great show as usual!Interesting thoughts on where the gprekeeaets are While it is possible to create media on a super low budget, it generally doesn't seem to turn out as well (as often) as projects that are normally funded. While someone working from their garage can compete on medium technical level, he's just not going to do as well when it comes to story, understanding an audience, and making a workable business.We've definitely benefited from lower tech prices out here in the non-LA production world, but it still takes experience to create an overall profitable high-quality show- maybe less long-term technical experience and more long-term we tried to do this show and it failed with the audience, why? experience.You mentioned Avatar as an example of good 3D: if you watch the blu-ray behind the scenes, one of the ideas they emphasize is how far ahead the motion capture/virtual camera tech they were using is. You can't do that kind of thing in your average garage In the future, that may be possible. But my thought is, if the high-end film people want to keep competitive, they have to keep innovating at a level that keeps them ahead of people who don't have the budget to innovate high-tech.

[OzAnalytics]

Thanks for the insight Evan. I guess that's what has changed - the mobile internet delivered care of Wi-Fi means that infrastructure costs are vastly reduced now. And I still think that mobile data plans are wildly overpriced here. Of course in Australia coverage is spotty at best but perhaps $50 billion of taxpayer money for NBN might help change that.
As to privacy, I'm happy to give some up if it's worth it. The trouble will be the lack of this choice to pick and choose just the 'good' stuff.

[Evan Stubbs]

While I was at General Motors quite a few years ago, we were looking at using RF transmission combined with 802.11b/g hotspots to provide automated service tracking for fleet vehicles. Combine that with an up-market service that marries an 802.11 transmission system to the drivetrain computer, and fleet purchasers would have had an end-to-end automated system that would have let them ensure all their drivers were looking after their vehicles correctly. We didn't end up doing it largely because there quite simply wasn't enough margin in fleet sales to justify the infrastructure costs of the time, but it was definitely technologically feasible.

It's fun stuff, although the privacy implications can obviously get somewhat hairy when it isn't anonymised.