Pervasive Networks

The decades old science fiction vision of “smart things” is finally coming to fruition. Within the next few years, literally billions of Internet-enabled microprocessors will provide digital intelligence and connectivity for almost every commercial and industrial product and appliance, extending the Internet into most aspects of our lives.

During this next era of connectivity—product connectivity—manufacturers and service companies will communicate with their products without any real involvement on the part of the end-user. This will bring significant benefits for suppliers and their customers, and cause a major business inflection point.

Imagine any product or appliance you own being Internet-enabled—your home appliances, your automobile, your office coffee pot—with all key characteristics and diagnostics available for review and adjustment online. Your cell phone is already Internet enabled, and you could use it to check whether your car is secure, your garage door is closed, or your coffee pot is still on. And you could correct any problems remotely.

Consider what happens today with millions of online home and office personal computers. The ever-present dangers of newly developing species of computer viruses and spam make downloading of regular anti-virus updates a necessity—this is often done daily, sometimes several times per day. And the revenue model for successful companies such as McAfee or Symantec is largely network centric. By the time you buy their software on conventional media, it’s already out-of-date.

Hundreds of millions of online computers using Microsoft Windows automatically report errors when they occur. The discovery of continually occurring new software bugs and security holes forces Microsoft to provide regular free updates via downloadable “service packs.” Doing this with physical distribution of software upgrades via conventional media is unthinkable.

What has already become commonplace with connected computers will soon emerge as an important service extension for most industrial (and high-end consumer) products and equipment. Everything will be networked, not just as a cute “feature,” but as an important part of operating characteristics.

In the current industrial automation paradigm, the value of equipment typically relates to the equipment itself—competitive operating features, quality, reliability, warranty, service. Sales transactions generate minimal information for the manufacturer—usually nothing more than customer name, date and location of purchase—and not much real, actionable information. Follow-up information is usually left to diligent sales people or logging of service calls from the customer when the equipment fails.

A networked product continues to generate significant information value over its lifespan. Beyond just marketing information, manufacturers can use their connected products to develop new services-based business models, with the potential to drive growth. The manufacturer not only knows where the device is located and when it was installed, but can monitor operating data in the actual environment, including error-codes generated and results of diagnostics. This information can result in tremendous time and cost savings for both the manufacturer and end-user, yielding vastly improved levels of operating reliability and customer service.

Digital nervous system

The convergence of smart devices with the Internet is causing a profound shift in the development of the digital revolution— creating a global “digital nervous system.” The exponential growth of device networking technology is changing the landscape very quickly. Huge opportunities will arise from the convergence of device networking, wireless sensors, machine-to-machine (M2M) communication and the Internet.

The availability of real-time, networked equipment data brings totally new meaning to the term “disintermediation.” When a company makes networked products that send real-time information, the company owns access to the product, and a primary link to the customer. The human link will be bypassed and a new rule will come into force: “The one with the most networked equipment wins.”

Jim Pinto is an industry analyst and commentator, writer, technology futurist and angel investor. You can e-mail him at: jim@jimpinto.com. Or review his prognostications and predictions on his Web site: www.jimpinto.com

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