THE IOT: A REVOLUTION IS UNDER WAY T.J. MCLEISH

THE IOT: A REVOLUTION IS UNDER WAY T.J. MCLEISH

Much (perhaps too much) has been written about the Internet of Things or Internet of Everything. But the idea itself has been around for decades. Marshall McLuhan described the content of a light bulb in Understanding Media: The Extensions of Man in 1964. Decades later, Mark Weiser described physical manifestations and uses of ubiquitous computing in The Computer for the 21st Century. However, the actual technology to make the IoT practical and affordable has only been around for a few years. Together, the advent of simple communications protocols (like Bluetooth low energy); the continued evolution of processing power, speed, size, and energy efficiency; advances in machine learning and management of vast real-time data streams; the proliferation of prototyping platforms easing IoT development; and the ubiquity of smartphones driving down the cost of technology have all created the opportunity to act on those decades of pent-up ideas. That acting on these ideas is relatively easy shifts who can act. One doesn t need a big lab with armies of engineers and mountains of money. Crowdfunding (like Kickstarter) has had a big effect on what is being developed and who is developing it. Numerous great ideas, and several not so great, are being pursued. A revolution is under way. A higher profile The movement of big and visible companies into the IoT space has attracted a great deal of attention. Apple, with its recent launch of the Apple Watch, has many people believing that wearables are ready to go mainstream. The much anticipated release of its IoT platform, HomeKit, along with the first wave of home products compatible with it, suggests that Apple believes IoT to be ready for the mainstream, as well. Samsung acquired the IoT home platform, SmartThings (launched on Kickstarter in August, 2012) on August 14, 2014, and has committed $100 million in funding for the creation of an open Internet of Things to which all things are to be connected by the end of 2020 (see Figure 1). Google acquired the home IoT innovator, Nest, on January 13, 2014, for over $3 billion. FIGURE01 Samsung & SmartThings The most profound technologies are those that disappear. They weave themselves into the fabric of everyday life until they are indistinguishable from it. - Mark Weiser The Computer for the 21st Century, 1991. Samsung has committed $100M in funding for the creation of an open Internet of Things to which all things are to be connected by 2020.

Facebook has Parse (2013), which recently released a software development kit (SDK) for IoT development (see Figure 2). Microsoft, Intel, Cisco, Amazon, and Huawei are in the mix, as well. In fact, it might even be easier to list the companies that haven t made a claim on IoT. 1 FIGURE02 Facebook & Parse Parse is an SDK that connects hardware, such as the Arduino Yun microcontroller, with cloud-based databases. This would allow, for example, regular storing of sensor readings or images from a security camera in the cloud. Why all the fuss? IoT is a new computing platform and the expectations are that it will have an impact similar to the introduction of PCs in the 80 s, the web in the 90 s, and smartphones in the 00 s. The expectation is that it will transform our world. How exactly? Well, the hype today points to the Apple watch, while reality points to the agricultural industry (where exemplary investment in IoT innovation is occurring). No one is really sure of the full impact on business-to-consumer (B2C) interactions, but everyone is getting ready and no one wants to miss the boat. ARDUINO YUN At SapientNitro, we consider the digital ecosystems created by connected IoT environments to be Story Systems and platforms consisting of enabling technologies, connections planning, and systems thinking. The platforms are essential to our Storyscaping approach. However, big questions remain. How does one design useful IoT services? How does one then sell these services? How does a brand exist in an IoT service? Is there a place for contextual advertising? Is there something better? 1 Cnet. Samsung snaps up SmartThings, embracing Internet of Things. http://www.cnet.com/news/samsung-snaps-up-smartthings-embracing-internet-of-things/.

1Trends to watch INSIGHTS AND LEARNING, NOT AUTOMATION As we approach 5 billion connected devices, each sending real-time data, the ability to ingest and interpret that data will place the emphasis on robust insights and analytics on a huge scale. 2 Quality, affordable analysis will become more important. And we re starting to see firms respond. One symptom is the shift in language from automation to insights and learning. Take, as an example, Amazon s Echo description: Always Getting Smarter. Echo's brain is in the cloud, running on Amazon Web Services so it continually learns and adds more functionality over time. The more you use Echo, the more it adapts to your speech patterns, vocabulary, and personal preferences. 3 To a learned house: Works with Nest. It s about making your house a more thoughtful and conscious home. 4 We are also seeing new products and services for IoT focused on analysis and learning. Arrayent an IoT platform that enables trusted consumer brands to implement connected products and systems offers an insight cloud. Similarly, Elgato s Eve claims that consumers can gain insights that help [them] improve [their] comfort, and make [their] home a smarter place. Furthermore, as the number and diversity of devices proliferate, platforms will have richer sources. Valuable insights about your home and life are a marked improvement from simply claiming that you can control your home from anywhere the current benchmark for the connected home. 2 SERVICES, NOT JUST THINGS Leaders in the space realize that the IoT is not about things. It is about services. Mark Kuniavsky of PARC calls the new physical objects of the IoT service avatars, shifting the emphasis away from thing and onto service. Simon King of IDEO describes an increased physicality to brand expression. Brand expression lives as service in the connected environments we are building all around us. An observation from CES (Consumer Electronics Show) 2015 is the shift in language describing IoT offerings from home automation to insights and learning, which is far more provocative and useful. As the IoT matures into a robust platform for the development of new services and products, we expect to see the rise of apps and app platforms. Similar to a decade ago with smartphones, the savviest companies are already trying to offer useful services on top of their things. From IFTTT (which stands for if this, then that and is a company focused on DIY automation tools) to AT&T s Digital Life platform, applications which link data from multiple sources and provide great additional value will propagate. 2 Gartner. Gartner Says 4.9 Billion Connected Things Will Be in Use in 2015. http://www.gartner.com/newsroom/ id/2905717. 3 Amazon. Amazon Echo. http://www.amazon.com/oc/echo/. 4 Nest. Works with Nest. https://nest.com/works- with- nest/.

And just as smartphone creators did not anticipate the incredibly diverse range of applications for what is (oddly) still called a phone, the range of applications built for the connected home will surely be far beyond what we can imagine now. 3ALLEGIANCES, PARTNERS, AND PLAYING WELL TOGETHER The inability of many devices to communicate with each other is an obstacle for their widespread adoption. And there are several solutions being pursued. Apple s HomeKit and HealthKit follow a model not unlike the brand s mobile app development model. To acquire certification, your app must pass Apple s scrutiny, thus guaranteeing high-quality and compatible apps for these connected platforms. Furthermore (and as we noted earlier), Samsung has pledged that, by 2020, every single product that it sells will be connected to the IoT. Similarly, Nest Labs has a growing network of strategic partners with whom it is collectively building out compatibility, the resulting products of which get the Works with Nest certification. 4PRIVACY That machine learning is key to services enabled by the IoT, and that learning takes data and time (and a machine likely in the cloud), raises some privacy concerns around how collected data is used and how the learnings are shared with others. We ve witnessed different privacy approaches being followed. Consumers have justifiably grown sensitive to privacy concerns. When Mattel announced that Hello Barbie would be recording children s conversations and storing them online, serious concerns were raised about the product. 5 Indeed, the voice-recognizing technology (ToyTalk) does record voice as it is necessary to learn. And Mattel clearly states, We do not use the content of the Recordings to contact children or for advertising purposes in its privacy policy. 6 But it is not easy to remove suspicions. Predictive behavior, enabled by machine learning, is the key to business models of most B2C IoT products. - Mark Kuniavsky, Principal Scientist, PARC 6 Stop Mattel s Hello Barbie Eavesdropping Doll. Campaign for a Commercial-Free Childhood. http://org.salsalabs.com/ o/621/p/dia/action3/common/public/?action_key=17347. 7 ToyTalk. Privacy Policy. https://www.toytalk.com/legal/privacy/.

Apple approaches this more stringently in their HomeKit and HealthKit connected platforms. HomeKit apps must have the primary purpose of providing home automation services, must provide a privacy policy, must not use data gathered for advertising or other use-based data mining, and must limit the use of data gathered to improving the user experience and/or the app s performance in providing home automation functionality. Similarly, HealthKit apps may not use the user data gathered from the HealthKit API for third party disclosure, for health-related human subject research for advertising or use-based data mining purposes (other than for improving health), or for the purpose of health research. 6 Nest Labs policy is more porous. They pledge to be transparent about the different types of information [they] collect and how [they] use [the information]. And to ask your permission before sharing your Personally Identifiable Information with third parties for purposes other than to provide Nest s services, and to do so only when [they] think [the third parties] will provide you with a welcome additional service. 7 SmartThings, on the other hand, welcomes appropriate advertisers, as seen in this example from their privacy policy: For example, we might share with our Advertisers the fact that a moisture sensor that you have connected to our Services has detected a flood in order to show you ads or offers for local plumbing services. 8 The varying success of these different approaches will have a big impact on the kinds of services IoT enables. How do we use machine learning to discover new things? What is the line between privacy violations and good advice from a service? How much trust do people have in the brands they are adopting, and how is useful information shared back to the user inside and outside of the system? These are all significant questions that remain to be answered. Conclusion The evolution of the IoT is perhaps the most transformative trend of the next decade. As billions of devices connect to networks and begin talking to each other, vast new potential is unlocked. The IoT will continue to disrupt entire industries and change how businesses, cities, and homes work. For advertisers and marketers, this ubiquitous computing platform offers a greater chance to get closer to our customers, and also allows us to offer personalized stories that better engage them. 6 Apple Developer. App Store Review Guidelines. https://developer.apple.com/app-store/review/guidelines/. 7 Nest. Privacy Statement. https://nest.com/legal/privacy-statement/. 8 SmartThings. Privacy. http://www.smartthings.com/privacy/.

T.J. McLeish Director of Experience Technology and Emerging Analytics, SapientNitro Chicago tmcleish@sapient.com With his 15 years of experience in ubiquitous computing and the built environment, T.J. provides expertise in advanced analytics, data visualization, data modeling, and measurement to guide innovation and design in the digital/physical world. INSIGHTS WHERE TECHNOLOGY & STORY MEET The Insights publication features the marketing intelligence, trend forecasts, and innovative recommendations of boundary-breaking thought leaders. The SapientNitro Insights app brings that provocative collection now in its digital form to your on-the-go fingertips. Download the full report at sapientnitro.com/insights and, for additional interactive and related content, download the SapientNitro Insights app. SapientNitro, part of Publicis.Sapient, is a new breed of agency redefining storytelling for an always-on world. We re changing the way our clients engage today s connected consumers by uniquely creating integrated, immersive stories across brand communications, digital engagement, and omnichannel commerce. We call it our Storyscaping approach, where art and imagination meet the power and scale of systems thinking. SapientNitro s unique combination of creative, brand, and technology expertise results in one global team collaborating across disciplines, perspectives, and continents to create game-changing success for our Global 1000 clients, such as Chrysler, Citi, The Coca-Cola Company, Lufthansa, Target, and Vodafone, in thirty-one cities across The Americas, Europe, and Asia-Pacific. For more information, visit www.sapientnitro.com. SapientNitro and Storyscaping are registered service marks of Sapient Corporation. COPYRIGHT 2015 SAPIENT CORPORATION. ALL RIGHTS RESERVED.