IoT Thought Leader on Benefits and Challenges Ahead
When it comes to the internet of things, we can see two types of companies (simplifying).
Companies with an inherent lack of Internet thinking. Let’s call them the incumbent.
And Internet thinking companies. The adjacent incumbent.
In Europe we need to do two things - help create more adjacent incumbents (OTT start ups in particular) and secondly, maybe even more importantly, help change agents to steer existing companies into Internet Thinking
Companies - to make them robust against the adjacent incumbent.
I know taxi and UBER is starting to become a cliche, but it is just so incredibly illustrative. The incumbent (the taxi company) reacts to the adjacent incumbent (an agile internet thinking company) UBER by releasing an APP,
what it thinks is the business secret… But it is not an APP that changes the game it is the inner workings (like the algorithms it uses to calculate the fees) of the company itself that make it an Internet Thinking Company.
Other examples; Car companies are traditional manufacturing industries. For example changing the rubber trim on a car’s design can take a year to complete, from idea to changing the factory. And design cycles are
typically several years. Compare this to internet thinking companies - they are used to much shorter design cycles, releasing products that are in perpetual beta and pushing updates onto live products. In this example
of cars, car companies are in general not afraid of internet companies making cars, but changing the business model so that car manufacturers are pure hardware providers.
Overall, I can see opportunities for internet thinking in 4 maturity levels:
1. Connected devices like the fitbit, withings, etc.
2. Optimised Business - saving 1% of X, e.g. fuel, time, space, waste, resources
3. Servicitation - changing the business model from out of the box to service, e.g. jet engines to flight hours
4. Interconnection effect - big data, data driven innovation (NETFLIX - House of Cards), Smart City
Smart city in this sense is still a difficult concept. It takes into account all of the different opportunities. Connected devices, optimised business, servicitisation and overall looks for the interconnection effect of creating a new operational paradigm using data. But cities are not single organisation, they are complex and slow to react. Light poles have a life time of 75 years, building longer and in London parts of the sewage system is still based on the Roman installation.
But just to recap, in Europe we need to do two things - help create more adjacent incumbents (OTT start ups in particular) and secondly, maybe even more importantly, help change agents to steer existing companies into
Internet Thinking Companies. The first one for me is solved by unlocking more and more risk capital, using incubators and changing culture (as a graduate in Europe you only have one choice… work for a company). For the
change agents - they need ammunition - let them the future research agendas and ask for the results that give them the arguments in their organisations to change their future.
Mirko Presser, Internet of Things Expert and Team Leader, Data Science and Engineering Lab, Alexandra Institute