The Internet of Things: New labels, new models
Although the Internet of Things has not entirely changed the rules of the game—in the form of the fundamental laws of economic activity—it is shifting the ways in which companies can achieve valuable, inimitable differentiation.
The rise of transformative technologies is often the subject of fascination and even obsession as the reach and limits of the new are defined. We track the impact of changes, from the mundane to the magnificent, in our language: heavier-than-air flight, electric lights, automatic washing machines. As the novel becomes understood and then ubiquitous, we drop the modifiers and simply fly, turn on the lights, and wash our clothes.
The Internet experienced this wave function in little more than 20 years. Without staking too much on the claim, let’s say that the early 1990s witnessed the Internet’s cotillion: What had previously been sheltered and relatively unknown was “out there,” and the prefixes “e” and “digital” were suddenly everywhere, from e-commerce to digital information. Twenty years later, we no longer talked like that, and it was just commerce and information once again.
So it is today with the suite of technologies known variously as the Internet of Things (IoT), the Internet of Everything (IoE), machine-to-machine (M2M), ubiquitous or embedded or ambient computing, and the business model changes it enables. At one level, the IoT is simply a continuation of the efforts to connect machines, facilities, fleets, networks, and even people to sensors; feed the resulting data into analytics applications; and automate or improve actions taken by humans or machines. Of late, however, so many related technologies have improved so much that we find ourselves now speaking of “smart machines,” “connected devices,” and “enchanted objects.”
As the new normal takes shape, we will eventually drop much of this affectation and speak once again mostly of machines, devices, and objects. Between now and then, however—as with the Internet, and electricity before it—we need new labels and new models in order to make sense of this metamorphosis. For although the rules of the game—in the form of the fundamental laws of economic activity—have not changed, the players certainly have. In many industries, who wins and who loses are once again up for grabs.
Certainly, successful strategies will be based, as they have always been, on differentiation that is valuable to customers and difficult for competitors to imitate. What is in the offing is a shift in the driver of valuable, inimitable differentiation from products to information. Consequently, designing successful strategies for the IoT world requires defining features of information-centric competition and what they mean for creating and capturing value.
The articles featured here begin that process. Some of the older pieces, dating back to the nearly antediluvian 2010 era, have seen the technologies on which they focus change dramatically. The underlying objective, however, is always to capture the essence of what is new while never forgetting what is eternally true.