Building the Internet of Things is risky—and a great opportunity

Getting to total connectivity will be hard.
Getting to total connectivity will be hard.
Image: Reuters/Paulo Whitaker
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Although most of us have come to anticipate boundless gains in cost, energy and human efficiency from the Internet of Things, there is one major hitch: it’s not here yet. The Internet of Things (IoT)’s disruptive potential has been deathly slow to realize, in large part because the commercial landscape is not ready for it.

Much of the delay resides in linking the vast islands of digital data from sensors and applications to an information highway, primarily wireless technologies.

Those of us involved with intelligent industrial products working toward integration for Internet of Things opportunities repeatedly face what we term “last” challenges. At Emerson, for example, we work on “last mile” deployments to extend cellular infrastructure, the “last hundred meters” to connect sites, “last rooms” referring to wireless dead spots and even the “last square mile” when investigating satellite coverage of oceans and deserts.

In each case, the world lacks ready solutions to make that last link.

Soon the world’s infrastructure will include 50 billion smart devices, broadly deployed 5th-generation cellular networks, immense cloud computing and storage capacity, as well as a fascinating array of innovative big data analytical tools. Making the “last” connections for these devices underpins the Internet of Things’ colossal risk of disruption, but that produces a conundrum that I term the last link paradox: to grasp the powerful yet inevitable Internet of Things’ promises, business must connect, but in doing so, they face being swept away in the floods of cost and productivity gains.

To solve these missing link problems requires immense collaboration and cooperation among wireless, sensor and applications providers, as well as among those companies aspiring to own Internet of Things platforms. But why should they?

Over the last half-century or so, the world has seen technological disruption destroy commerce. From radio to TV to YouTube and newspapers to Twitter, business model after business model has risen, peaked and failed (or at least stagnated). The most effective and universal technological disruptions have often been low-earning, sparked by innovations that were low-cost or free.

In the Internet of Things, bountiful returns will—eventually—come to only a select few entities that either own IoT platforms or prime synthesizing applications. However, even those large economic gains typically occur only in later phases of the developments, after blending sizable, diverse information. This requires that businesses first launch multiple initiatives to digitize and link sensors and devices, and to achieve widespread adoption, these last-lin­k initiatives will entail free or low-cost offerings with little or no immediate economic return.

It’s an unattractive proposition for incumbent companies. The very nature of disruption as a public good is undermining the necessary cooperation among corporations that is required to solve “last” wireless developments and realize the Internet of Things.

In the home automation field, for example, an automation developer may sort through as many as a dozen alternatives to complete their “last” links, including prominent alternatives such as Wi-Fi, Bluetooth or LTE to less familiar ones like Zigbee or Z-Wave. But with little incentive to innovate last links, each of the currently-available options typically falls short on at least some dimension.

Today, the vast majority of the world’s digital data resides in unconnected silos just like those in the home. Progress toward the Internet of Things will favor industry verticals that share the risk to reach for that data.

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