Green bananas and the Internet of Things
At the Bosch IoT Lab at the University of St. Gallen, we are currently researching the influence of the Internet of Things (IoT) on business models. Having re-read the well-known articles “What is Web 2.0?” by Tim O’Reilly and “What is the Internet of Things” by Elgar Fleisch, I was tempted when coming up with the idea for this blog post to headline it “What is Web 3.0?” But since I wanted to avoid placing my humble post in the same category as those iconic papers, I went for bananas instead…
Elgar makes some very important points in his article. The analogy of the IoT enabling “high resolution management” is in many cases very helpful to me when thinking about IoT applications and business models.
For example, Rolls-Royce is famous for introducing the “Power-by-the-hour” program for its jet engines. In this business model the jet operator pays a fixed fee per flying hour for maintenance. Remote monitoring of the engine’s condition is a key factor in making such a business model successful. For me, increasing the resolution means the same principles can be applied to much smaller and less expensive devices than jet engines. Thanks to decreasing component prices and ubiquitous connectivity, Brother, for example, is already able to offer a pay-per-use business model for rather inexpensive laser printers.
Thus, high resolution management in this context means that what was too expensive to be measured yesterday will be measured in the IoT age. The Internet of Things will dramatically increase the density of connected sensors per square, just as the density of pixels on image sensors will also increase.
Certainly the article “What is the Internet of Things?” is very relevant when looking at the IoT, but there are some interesting aspects in O’Reilly’s article, too.
- The Long Tail
- Data is the Next Intel Inside
- Users Add Value
- Network Effects by Default
- Some Rights Reserved
- The Perpetual Beta
- Cooperate, Don’t Control
- Software Above the Level of a Single Device
Looking at these patterns (written in 2005!) from an IoT perspective, they still appear remarkably fresh and meaningful. And they are really good food for thought. To give but one example: No. 6 “The Perpetual Beta” was clearly meant for software when O’Reilly wrote his paper.
The Perpetual Beta: When devices and programs are connected to the internet, applications are no longer software artifacts, they are ongoing services. Therefore: Don’t package up new features into monolithic releases, but instead add them on a regular basis as part of the normal user experience. Engage your users as real-time testers, and instrument the service so that you know how people use the new features.
But in the light of the IoT, software becomes an integral part of more and more connected devices. This means that the principle of a perpetual beta also becomes applicable to physical devices, in a way. Even after they buy a product, customers can profit from future development of it. What is true for smart phones, computers or, let’s say, TVs today will one day be true for cars, heating systems and watches, too: They ripen after delivery to the customer; just like green bananas.
What insights do you get when looking at those eight patterns through the IoT lens?