A Connected Year in the Making?
Throughout the past 24 months the CE (consumer electronics) market has wreaked havoc on the typical way of doing business in enterprises, both large and small. Almost every CIO, SVP of HR, and/ or head of corporate governance has had to deal with the post-holiday onslaught of devices pouring into their once tightly controlled sanctuary of enterprise data and top-down-device assignments. The new normal is the moat around the enterprise kingdom has been breached, and well more than half of these leaders have found a way to securely allow employees to bring their productive habits into the work world. The smart ones realize this is the thin edge of a wedge into gamechanging, IT-enabled innovation. Early studies are even showing this shift is actually valuable for the enterprise, raising employee satisfaction levels, reducing (or at worst shifting) capital costs, and actually increasing productivity (and often times the hours of work).
The idea of BYOD (bring your own device) and the “consumerization of IT” trend that it supports is hot news in almost every CIO publication in the market today. The trend however doesn’t stop with internal IT. It is extending into social media circles with CMOs ensuring their message is hitting home with the increasingly “Connected Consumer” via their device du jour, and social channel of choice. Now supporting a multibillion dollar industry, these trends are really pretty common sense. At its core it is about connecting people (some of whom also happen to be employees) with one another, and with information that provides perceived value in realtime (some of which comes from machines).
The risk in firms reacting to these trends, however, may be that strategists haven’t stepped back far enough to see the forest through the trees. What if BYOD, “consumerization of IT,” and “social” were all just earlier indicators of a much larger phase we are about to embark on: The Connected Era. If these trends are actually just elements of a broader “connected program” highlighted first through the “connected workplace” or “connected consumer” aspects, then maybe the connected era needs to look at some of the drivers. So, Why Now? So what is driving this “connected era?” On one level, it is the perfect storm of technical building blocks: ubiquitous network, micro-computer power, cloud-based infrastructure, ability to “mash up” data from many diverse sources, etc. However this alone wouldn’t do it. There is also the human factor. Incredible focus on Ux, a society that appreciates openness and sharing, and economic marketplace that makes “applets” (aka apps) bite sized and affordable all are embedding CE devices deep into our way of life. The combination of these marketplaces that accompany many popular CE devices (iTunes, Google Play, etc.), coupled with the SDKs (software development kits) have revolutionized the value chain for consumers. Not only do these marketplaces reduce the cost of “trial and error” for consumers to a negligible amount, but the SDKs create an army of “makers,” ever extending the usefulness of the original manufacturer’s device. This is truly driving innovation from the outside in for these CE firms. You see, the usefulness of all these CE devices didn’t occur until the CE manufacturers opened the value chain to a larger group of developers. This vast group of innovators found value in the devices, and found new ways for consumers to create, change, and share information. The question is, as more and more devices connect, how long will other connected-device ecosystems take to embrace this “maker movement?”
Make Your Own Path
The “makers” represented in the now well established app stores are only a very small fraction of a much larger movement. The broader maker movement has been growing as a DIY (do it yourself ) culture for some time now. It became publicly recognizable in 2005 when MAKE magazine launched as the modern-day version of Popular Mechanics. One year later, Maker Faire (a massive event that showcases the top DIY inventions) was born, giving inventors, tinkerers, and self-proclaimed “makers” an outlet beyond their basements or garages to display and coordinate their scientific/ artistic expression.
If you have been fortunate enough to visit one of these events, you have seen “hacker” versions of connected experiences everywhere. For most enterprise executives, it may be difficult to see past the homemade automated fire-breathing dragon (seriously, there was one on tour in 2011), or the go-cart recliners. The show, however, has connected devices throughout demonstrating that some consumers want to connect, regardless of what the mainstream product companies are launching to market today. This maker movement will have a significant effect on the “connected world” around us. In fact, it may just be the missing ingredient to allowing it to explode into every aspect of everyday life.
As CE companies gave up some control of their value chain, by inviting in external innovation partners in the form of “makers” (i.e. developers), consumers saw them as more relevant, and market demand increased, as did marketshare. Eventually all this led to their share value skyrocketing. Think of what will happen if similar value chain alterations occur in a broader connected world. Makers in the M2M space could have an even more profound effect. Making single devices more innovative or potentially stringing many devices together could create a very relevant “connected life.”
A few companies have recognized the combination of two very hot trends may combine to define the connected world—maker movement and M2M. An example would be the Kickstarter darling, SmartThings. This upstart is building an ecosystem of sensors that can interface with, or affix to, non-connected devices. The interesting part is that consumers can “make” their own M2M “app” and define what happens when a sensor reaches a particular value. There are similar enterprise-level platforms, like that from ILS Technology called Device-Wise. They make it easy for developers to interact with many different industrial controllers and sensors by creating a simple logic-based middleware layer allowing the focus to be on business logic vs. technical integration.
These companies (and new competitors launching every year) are shifting the M2M focus from “look how smart my product is” to “look how easy my ecosystem is to work with.” These are “maker” styled messages!
Regardless of exactly when and how this maker movement will start to significantly impact the broader connected era, there are two things that you can bet on:
1. Customers (no matter if they are consumers or enterprises) demand customization. Trends spotted in one customer market will transfer to others. It is only a matter of time. So what was born in the CE market will find its way to other device markets, regardless of how sophisticated or unsophisticated the device may seem.
2. Enterprise IT leaders need to continue to keep their heads up. If CIOs think the device game is hard today, just wait. Everything is connecting, and as soon as a few companies attempt to “open” their marketplace-style value chain, it will explode.
So how will you and your firm handle this massive wave coming? It will be interesting to see how many will try to lock out the broader array of connected devices as they originally tried to for the ever popular CE devices (e.g. iPhone, iPad, etc.), just to watch them creep back in.
The real excitement in the marketplace will be to see the more aggressive leaders who support innovation inside and outside of their firms. These will be leaders who allow for BYOD policies to broadly cover a myriad of devices (M2M, CE, etc.), and push for their firm’s products or services to be open enough to let external innovators, makers, and users find unforeseen value. It is these types of connected leaders that will truly shape our connected future!
Gregg Garrett leads a team that advises clients on how to harness innovation in the connected economy as CEO and president of CGS Advisors. He lectures at several universities and contributes to Connected World. Previously, he served as chief strategy officer of IT and innovation at Volkswagen Group of America. He can be reached at email@example.com