Tag: internet of machines

Balkanising the internet

Breaking up the internet into different standards would be a backward step, but it might happen.

Could the current internet spying scandals result in the internet become fragmented into different national empires?

Over dinner with President Obama with fourteen other tech industry leaders, Yahoo!’s CEO Marissa Mayer warned that US spying threatens to ‘Balkanize the Internet’, Bloomberg reports.

Mayer has reasons to be worried, the scale of the US National Security Agency’s multiple programs monitoring internet traffic around the world has surprised even the most hard bitten commentator and it is already affecting US technology sales to China.

Coupled with  revelations that Britain’s GCHQ was tapping the subsea cables themselves in concert with US agencies almost every national government is now pondering the fact that, as an invention of the US military, the internet itself is open to being misused by its creators.

The Internet’s critical economic role

As online communications become more critical to nation’s economies and security it’s understandable that governments would be considering how to make their networks more hardened to interception or interference and creating whole new protocols outside current standards is one way of doing that.

With the industrial sector increasingly being connected through the internet of machines the stakes suddenly become much higher, as the Iranian government discovered with the Stuxnet worm that crippled the country’s nuclear research program.

After Stuxnet every country and business with critical systems exposed to the internet is now working on hardening those systems from similar attacks.

Until recently, almost all the profits from the internet’s growth have gone to US technology companies so its not a surprise that Facebook chief Sheryl Sandberg and Google chairman Eric Schmidt were with Mayer when she expressed her concerns to President Obama.

Balkanising the web

A balkanisation of the internet along national lines and industrial sectors is bad for US business which already struggles to get traction in non-Western markets like China and India.

The irony is though that Yahoo!, Google and Facebook are all trying to balkanize the internet themselves in locking users into their own networks.

While that’s a concern for internet users, it appears those commercial walled gardens don’t seem to be working.

The failure of commercial walled gardens

Yahoo!’s attempt to monopolise their corner of the web has clearly failed and it’s appearing that Google’s attempts to take over social media are failing despite forcing YouTube users onto Google+ while Facebook is beginning to buckle under the sheer weight of its own News Feed.

Common wisdom about internet markets is that you have to be the number one provider in your niche to succeed, what we may well be seeing is those niches are smaller than we thought and leadership in one sector doesn’t automatically guarantee success in another.

As Deloitte’s Eric Openshaw told this blog last week, ““one way or another, these things can be problematic in the short run but typically over time they are resolved.”

Tesla, Edison and Jonathan Swift

One of the reasons for the internet being one of the most successful technologies is that it was standardised relatively early, it didn’t have the battles over industry standards like the AC versus DC electricity arguments between Edison and Tesla, or the insanity of different railway gauges plaguing countries and international trade.

Jonathan Swift parodied these technological arguments in Gulliver’s Travels where the main point of contention between the warring empires of Lilliput and Blefuscu was over which end boiled eggs should be cracked.

It would be a great economic loss if security concerns or commercial opportunities saw the internet follow those examples and saw the online world carved up into many little empires.

Should it happen, we deserve a future Jonathan Swift to parody us mercilessly.

Walls of Constantinople by Bigdaddy1204 through Wikimedia

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Is Australia falling behind on the internet of everything?

Australian businesses are falling behind the rest of the world in using the Internet of machines says Cisco

Last Friday Cisco Systems presented their Internet of Everything index in Sydney looking at how connected machines are changing business and society.

Cisco Australia CEO Ken Boal gave the company’s vision of how a connected society might work in the near future with alarm clocks synchronising with calendars, traffic lights adapting to weather and road conditions while the local coffee shop has your favourite brew waiting for as the barista knows exactly when you will arrive.

While that vision is somewhat spooky, Boal had some important points for business, primarily that in Cisco’s view there is $14 trillion dollars in value to be realised from utilising the internet of machines.

Much of that value is “being left on the table” in Boal’s words with nearly 50% of businesses not taking advantage of the new technologies.

Boal was particularly worried about Australian businesses with Cisco lumping the country into ‘beginner’ status in adopting internet of everything technologies along with Mexico and Russia, with all three lagging far behind Germany, Japan and France.

cisco-country-capabilities-internet-of-everything

In Boal’s view, Australian management’s failure is due to “the focus on streamlining costs has come at the cost of innovation.”

This something worth thinking about; in a business environment where most industries only have two dominant players and the corporate mindset is focused on maximising profits and staying a percentage point or two ahead of the other incumbent, being an innovator itsn’t a priority – it might even be a disadvantage.

For Australian business, and society, that complacency is a threat which leaves the nation exposed to the massive changes our world is undergoing.

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Our hackable lives – why IT security matters.

Now our cars, homes and security systems are hackable we have to start taking IT security seriously.

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.

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Coming to your city – the internet of machines

A chart by sensor manufacturer Libelium illustrates how the internet of machines is growing

An intriguing infographic from Spanish sensor manufacturer Libelium – which to Australian ears sounds like a new age defamation law firm – illustrates how the internet of things is being used in all walks of life from shipping containers to park benches.

The notable thing about the diagram is pretty well all of the sensor applications have been available for years – in some cases decades – and its only with the arrival of cheap sensors and pervasive internet access that widespread monitoring has becoming possible.

Libelium smart world infographic

With affordable, even disposible, sensors coupled with internet projects like Google Loon and Australia’s National Broadband Network, these networks are now possible at a price that won’t sink a government’s budget.

In fact these sensor networks will probably improve councils’ and governments’ budgets as they promise to improve the efficiency of services like rubbish collection and street repairs.

The real challenge is managing all the data this equipment gathers, that’s going to be one of the big jobs of the next decade.

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Take ten engineers and the internet of everything

LogMeIn CEO Michael Simon sees the future of his business in the internet of machines

It seems a far jump from running a gaming platform to a remote access software company with a focus on the internet of machines, but that’s the journey remote access company LogMeIn and its CEO Michael Simon has travelled.

“Anything that could be connected will be connected in the next decade.” Micheal told me in Sydney last week and it’s where he sees the next step for the company he has led since its founding in 2003.

LogMeIn grew out of a team that formerly worked for uproar.com, an online gaming company sold to a division of Vivendi Universal for $140 million in 2001.

Two years after the sale Michael, who had been CEO of Uproar, and a team of ten engineers who formerly worked for the company thought they could solve the complexities of accessing computers remotely.

For geeks and big business, accessing your computer across the internet in 2003 wasn’t much a problem however it involved configuring software, punching holes in firewalls and configuring routers.

The LogMeIn team wanted to find a way to make this technology cheap and easy for small businesses and homes to use.

A decade later they employ 650 staff, half of whom are engineers, and have twenty million users of their product.

Building the freemium model

The vast majority of those users are using LogMeIn’s free services – Simon estimates that over 95% of users are using the free version.

In this, LogMeIn is one of the leading examples of the freemium business model – offering a free version of a software product and premium paid for edition with more advanced features.

One leader of the freemium movement was the Zone Alarm firewall, a product which earned its stripes in the early 2000s at the peak of the Windows malware epidemic.

Today one of Zone Alarm’s veterans, Irfan Salim, sits on the LogMeIn board along with two former executives of Symantec, the company whose PC Anywhere and Norton Internet Security products competed with both Zone Alarm and LogMeIn.

While LogMeIn has done well over the last ten years, the market today is very different to that of a decade ago with cloud computing technologies taking much of the need for remote access software

Mike Simon sees these changes as an opportunity with the computer industry having gone through three phases – the PC centric era, the mobile wave and now we’re entering the internet of things.

To cater for the mobile wave LogMeIn has released Cubby, a cloud based storage system that competes with Dropbox, Google Drive and Microsoft’s Skydrive, but Simon has his eye on the next major shift.

Controlling the internet of machines

The internet of things is a crowded market, but Simon believes companies like LogMeIn have an advantage over the telco and networking vendors as businesses with freemium and startup cultures look for ‘pennies per year’ rather than the ‘dollars per device’ larger corporation hope to make.

It’s a big brave call, but with the market promises to be huge – General Electric claimed last year nearly half the global economy or $32.3 trillion in global output can benefit from the Industrial Internet.

That’s a pretty big ticket to clip.

Whether Michael Simon and LogMeIn can achieve their vision of being integral part of the Internet of things remains to be seen, but so far they do have success on their side.

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Latently obvious – the importance of data networks

The internet of things is going to see more emphasis on reliable and fast network connections.

One of the big buzz phrases of 2013 is going to be “the internet of everything” – where machines, homes and even clothes are connected to each other.

In the near future, we’re going to be more surprised when things when things like cars, washing machines and home automation system aren’t connected each other.

To get all these things talking to each other requires reliable communications with low latency – quick response times – so technology vendors are seeing big opportunities in this area.

Last night Blackberry launched its new platform and the beleaguered handset company’s CEO Thorsten Heins was adamant in his intention to focus his business on the internet of machines where he sees connected cars and health care as being two promising areas.

Blackberry isn’t alone in this with the major communications providers and telcos all seeing the same opportunities.

Cisco has been leading with their role in ‘the internet of things’ and much of their Cisco Live conference in Melbourne two weeks was spent looking at the technologies behind this. The company estimates the “internet of everything” will be worth 144 trillion in ten years.

Rival communications provider Ericsson sees the revenue from this sector being worth $200 billion by 2017, so it’s not surprising everyone in the telecommunications industry want to get a slice of it.

The question is though how to make money from this? Most of these communications aren’t data heavy so metering traffic isn’t going to be the deliver the revenues many of these companies expect.

If offering priority services with low latency is the answer, then we hit the problem of ‘net neutrality’ which has been controversial in the past.

Whichever way it goes, businesses will want to be paying a premium to make sure their data is exchanged quickly and reliably. For many organisations data coverage and ping speeds are going to be the deal breakers when choosing providers.

The ‘machine to machine’, or M2M, internet market is something we’re going to hear more about this year. It’s clear quite a few executives are staking their bonuses on it.

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Retail and the internet of machines

Paypal and eBay are using the Internet of machines to put service station cashiers out of work.

Online retail and payment giants Ebay and PayPal hosted a media lunch in Sydney yesterday to publicise their Australian Business Update.

While eBay dominates the online selling market, PayPal’s position in the payment market place is extremely powerful with Internet monitoring company Comscore reporting in their Digital Wallet Roadmap how PayPal dominates the US market and does likewise in other markets like Australia.

PayPal's US market lead

Their update confirms the trends which have been obvious for some time, particularly in how mobile devices are now driving retail. eBay’s research indicates properly implemented multichannel strategies drives six times more sales than just having an online presence.

What was particularly notable with eBay’s presentation was how the Internet of Machines is changing the retail and logistics industries as smartphones and connected point of sales systems are cutting out jobs and middle men.

Paypal are particularly proud of their US partnership with cash register manufacturer NCR that integrates smartphone payments with the point of sales systems in restaurants, convenience stores and gas stations.

eBay illustrated this with their examples of coupon offers being tied to smartphone payment systems so people paying for gas with their smartphone get a voucher offer for various up sells.

Studies in the US have found a $10 offer can result in sales of up to $100. A pretty compelling deal for most merchants.

With these technologies, we’re seeing how connected machines are changing even the most mundane business tasks.

It may well be that the days of the service station cashier are numbered; it’s quite possible that in one generation we’ll have gone from full staffed gas stations to totally automated facilities.

The example of gas station attendants and cashiers is just one example of how automation is changing many retail and sales tasks. It would be a brave person to say their job isn’t safe.

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