Paul Wallbank – Brilliant Communications

Category: Internet

Realising value from the internet of everything
How much opportunity does connecting all our machines to the internet really offer businesses and society?

Cisco’s Internet of Everything index released last week looks at one of the great opportunities facing today’s managers in realising business value in these new technologies .

On Cisco’s calculations, the internet of everything is worth over $14.4 trillion to the world economy and nearly half the business benefits are going wasted.

Germany and Japan lead the pack and, as discussed yesterday, Australia wallows between China and Russia.

Cisco comparison of countries

Despite German businesses being the leaders, Cisco estimates $33bn, or nearly 40% of the potential gains, isn’t being realised even in that country.

How different industries are using the internet of machines is notable as well, with Cisco claiming the biggest benefits currently being realised by the IT industry while the greatest potential lies in the service, logistics and manufacturing industries.

Internet of everything value by industry

If anything, these projections could be on the conservative side with Cisco estimating fifty billion devices connected to the net by 2020. Given the rate of smartphone being sold and everything from vending machines to clothing being online, it may well be ten or even a hundred times that number.

The real challenge for businesses in all these projections is how individual organisations can realise this value in their operations.

For some businesses, there’s plenty of existing opportunities with well established services in areas like field services and logistics tracking the locations of staff and packages. These are relatively simple to incorporate into existing operations.

In other applications, businesses will find things more complex as the connected devices will tie into analytics and Big Data plays. These won’t be simple.

One particularly important area for the workforce as a whole in business process automation where many tasks currently done by humans can be carried out by machines talking to each other.

This is already happening in fields like fast moving consumer goods and hospitality where stock levels can be automatically monitored and replacement stock ordered in without staff being involved. As the technology becomes more widespread this will threaten the roles of many previously well paid managers.

Many of those managers though will be challenged anyway unless they’re prepared to deal with the changes that internet of things is bringing to their businesses.

How do you think the internet of everything will change your business?

Similar posts:
August 4, 2013
What business can learn from the lost Island of Jura
What would you do if your entire suburb, town or district vanished off the map? That’s the problem the villagers on the Scottish isle of Jura have had to face after Google wiped them off the map

The good humour of the locals about their predicament shines through the story, although the British and Scottish governments are less than impressed.

Particularly noteworthy is how the island’s distillery dealt with vanishing off the map – Jura’s whisky is quite distinctive for those who’ve tried it – came up with a great idea for a Twitter campaign to promote their brand.

Kira’s residents show just how important initiative and resilience is for business people, it’s a lesson we should all keep in mind the next time you hear an executive or interest group whingeing that the government needs to do something.

Similar posts:
- No Related Posts
July 30, 2013
Our hackable lives – why IT security matters.
Two stories this week illustrate the security risks of having a connected lifestyle. Forbes magazine tells in separate pieces how modern car systems can be overriden and how smarthomes can be hacked.

Smarthome system security is a particular interest of mine, for a while I was involved in a home automation business but I found the industry’s cavalier attitude towards keeping clients’ systems secure was unacceptable.

The real concern with all of these stories is how designers and suppliers aren’t taking security seriously. In trading customer safety for convenience, they create serious safety risks for those using these system. It’s as if nothing has been learned from the Stuxnet worm.

A decade ago, a joke went around about what if General Motors made cars like Microsoft designed Windows. Like all good stories, it had a lot of truth to it. Basically, the software industry doesn’t do security particularly well; there are developers and vendors who treat security as a basic foundation for their work, but they are the exception rather than the rule.

That may well be a generational thing as today’s young developers and future managers are more aware of the risks of substandard security in the age of the internet.

Rather than seeing security as something that is bolted on to a product when problems arise, this generation of coders are having to treat security as one of the fundamental foundations of a new system.

What is clear though is that the builders of critical systems are going to have take security far more seriously as embedded computers connected to the internet of machines become commonplace in our lives.

Similar posts:
July 27, 2013
Google and Microsoft show how online business is changing
Both Microsoft and Google yesterday reported their second quarter earnings for 2013 and both missed the targets expected analysts. Does this really mean anything?

Microsoft’s earnings were particularly notable as they included a $900 million dollar write off on Surface RT inventories, this almost certainly means a key part of the company’s tablet strategy has failed.

What’s striking in Microsoft’s earnings report is the terrible performance of the Windows Division which saw sales increase 10% year-on-year to 4.4 billion dollars, but earnings collapse by over 50%. Excluding the Surface RT write off, the division would still have seen a ten percent fall.

The company’s statement emphasised how the division is struggling with increasing costs.

Windows Division operating income decreased $1.3 billion, primarily due to higher cost of revenue and sales and marketing expenses, offset in part by revenue growth. Cost of revenue increased $1.2 billion primarily reflecting product costs associated with Surface and Windows 8, including the charge for Surface RT inventory adjustments of approximately $900 million. Sales and marketing expenses increased $344 million, reflecting advertising costs associated with Windows 8 and Surface.

At Google, the company’s 2nd Quarter report show trend is still upwards but the core business of online advertising is showing some cracks as the total number of paid clicks grows, but the value of each falls. At the same time traffic aquisition costs are rising at the same rate as revenues.

This could indicate that advertisers’ appetite for online links is fading. For smaller businesses, the cost of adwords campaigns has been escalating to the point where the old days of newspaper classifieds and Yellow Pages listings start to look cheap.

Couple the cost of advertising with the inevitable ‘ad blindness’ that web surfers have developed and a worrying trend for Google starts to appear. Overall Google’s net profit margin was 26%, down from 31% a year earlier.

While both companies remain insanely profitable – Google earned $14 billion this quarter and Microsoft $6 billion – both businesses are showing stresses as their markets evolve. It proves no business can afford to be complacent in these times.

Similar posts:
July 19, 2013
NBNCo’s storytelling failure
One of the baffling things in reporting the Australian tech and business scene is how the National Broadband Network project manages to get such bad press.

Part of the answer is in this story about Google Fiber sparking a startup scene in Kansas City.

Marguerite Reardon’s story for CNet is terrific – it covers the tech and looks at the human angles with some great anecdotes about some of the individuals using Google Fiber to build Kansas City’s startup community.

This is the story that should have been written in Australia about the National Broadband Network.

I’ve tried.

Failing to tell the story

Earlier this year I travelled to Tasmania to speak to the businesses using the NBN and came back empty handed.

In Melbourne, I finally made it to the Hungry Birds Cafe – vaunted by the government as the first cafe connected to the NBN – to find they do a delicious bacon roll and offer fast WiFi to customers but the owners don’t have a website and do nothing on the net that they couldn’t do with a 56k modem.

I’ve found the same thing when I’ve tried to find businesses connected to the NBN – nil, nothing, nada, nyet. The closest story you’ll find to Cnet’s article are a handful of lame-arsed stories like this Seven Sunrise segment which talks about families sending videos to each other, something which strengthens the critic’s arguments that high speed broadband is just a toy.

Businesses need not apply

This failure to articulate the real business benefits of high speed broadband after four years of rolling out the project is a symptom of a project that has gone off the rails.

It’s not surprising that businesses aren’t connecting to the new network as NBNCo and its resellers have continued the grand Australian tradition of ripping off small businesses. Fellow tech blogger Renai LeMay has quite rightly lambasted the overpriced business fibre broadband plans.

Even when small business want to connect, they find it’s difficult to do. The Public House blog describes how a country pub was told the cost of a business NBN account be so high, the sales consultant would be embarrassed to reveal the price.

“The cost for exactly the same connection (and exactly the same useage) is so much higher for a business that you wouldn’t be interested.”

The whole point of the National Broadband Network is to modernise Australia’s telecommunications infrastructure and give regional areas the same opportunities as well connected inner city suburbs.

Failing objectives

If businesses can’t connect, or find it too expensive, then the project is failing those objectives. So it’s no surprise that NBNCo’s communications team can’t tell a story like Kansas City’s because there are no stories to tell.

Apologists for the poor performance of NBNCo say it’s a huge project and we’re only in the early stages. In fact we’re now four years into a ten year project and we still aren’t hearing stories like those from Kansas City.

Telling the story should be the easy part for those charged with building the National Broadband Network, that they fail in this should mean it’s no surprise they are struggling with the really hard work of building the thing.

Similar posts:
June 21, 2013