There Is No Internet Of Things
More than a decade ago — in May 2001 — Forrester authored a report heralding the coming of the X Internet, or extended Internet, defined as “Internet devices and applications that sense, analyze, and control the real world.” We proclaimed that “the Web is fading fast . . . smart devices will push the scale of the Internet far beyond today’s PC-based Net.”
Turns out that the vision we laid out in 2001 still hasn’t come to fruition. While enterprises in healthcare, manufacturing, and utilities are well down the path of the X Internet — better known today as the Internet of Things, the industrial Internet, or in Cisco Systems' parlance, the Internet of Everything — consumer adoption and general business adoption of sensor devices and services are just getting started.
The sensor-laden consumer products that are starting to hit the market are “smart” in sensing and relaying information about the physical bodies wearing them or the physical environments they inhabit — a phenomenon we call “smart body, smart world.” But these smart products could get a lot smarter: Today they are largely fragmented and not as useful as they could be.
By and large, these devices don’t talk to each other, and don’t integrate with larger “systems of engagement” that deliver value for consumers and enterprises. 94Fifty’s Bluetooth basketball can sense dribble force and shot angle. Nike Hyperdunk Plus basketball shoes can tell you how fast you’re running and how high you’re jumping. And the Under Armour Armour39 shirt knows your heart rate and lung capacity. But you could be using all three of these devices at the same time, and they wouldn’t even know they were playing the same game: They are three products from three separate manufacturers, and the data they collect is siloed in their own separate apps.
To stick with the basketball analogy, imagine that you’re sitting in the new stadium for the San Francisco Warriors, which is scheduled to be finished by 2017. Now imagine that the players are using the devices we’ve described above and that you can vote on who needs a break based on players’ real-time biometrics via a “you be the coach” mobile app. The stadium effects — lighting and sound — are coordinated with the excitement of the game, as measured by collective heart rate. Perhaps your own biometrics feed into these effects via a wristband that also serves as your non-scalpable ticket and concessions payment device (the concessions come to you at your seat, like an Uber app for hot dogs).
The sensor devices required to implement this scenario exist today, but the systems for managing the data flow need some work. Today, data in a basketball stadium may reside in multiple systems of record, such as customer relationship management (CRM) for ticketing and inventory systems for concessions. A smarter stadium would have this data — and lots more, thanks to ubiquitous sensors — integrated into dynamic “systems of engagement” to enable smart services like the ones we’ve described.
Leading brands aren’t waiting for the Internet of Things to perfect itself before they act — they’re already using sensor-connected devices in unique ways to increase revenue, product engagement, and product satisfaction. The value comes not from the sensor devices themselves but from the way in which brands integrate the devices with larger systems of engagement.
Take, for example, Walt Disney World Parks And Resorts. You may have heard of MagicBands, the waterproof, RFID-enabled wristbands that Disney has developed for its theme park guests, starting with Walt Disney World in Florida. MagicBands can be used as hotel room keys, theme park tickets, FastPasses for skipping lines, and payment for concessions and gifts, and they can store personal information so that, if you opt in, a character can recognize you by name and know it’s your child’s birthday.
The MagicBands are nifty, but what’s really impressive is the system behind it, called MyMagic Plus. MyMagic Plus combines multiple systems of record — trip planning, ticketing, CRM, asset management, and payment — into a system of engagement that enhances the guest experience while improving efficiency and increasing revenue for Disney. Because the bands can be preprogrammed by guests before they take their trips, Disney can better plan for staffing within the park; guests are more likely to stay longer in the park (rather than go to a competitor park), as they’ve planned their whole day. In addition, guests can move through the park more easily, tapping their wrists rather than wrestling with cumbersome turnstyles. Frictionless payment with the wristbands is easier for the guests and makes it more likely that they’ll spend more money in the park.
This kind of innovation doesn’t have to happen in a closed system like Disney’s– multiple products use open APIs and common standards so that their smart products can get even smarter. Jawbone has opened up its APIs for the UP band so that third-party developers can mash up their products and services with Jawbone users’ activity and sleep data. Dropcam’s new product, the Dropcam Pro, acts as a hub for low-energy Bluetooth Smart devices, so that you could sync, say, your Fitbit Force with your Dropcam so that when you come home and are in proximity to the device, it will stop recording.
In a new Forrester report published today, we examine the implications of these trends in more depth, and we’ll be talking more about this research at Forrester's Forum For eBusiness & Channel Strategy Professionals coming up November 5-6 in Chicago. Registration is still open—hope to see you there.