The Internet of How
Once a “browser in a box” experience, the internet now thrives and expands as a mesh of interconnected products and services: smart thermostats, home security solutions, self-driving cars, fitness trackers and many others. With an expected 50 billion connected objects and a market size of $1.7 trillion by 2020, this fairly new and ever expanding collection of products and services is commonly referred to as the Internet of Things (IoT).
In the coming years, IoT will deeply affect current product and service offerings and help create entirely new business models. Responding to this development, Smart Design has devised The Internet of How, a series of articles that provide a vision of this phenomenon from a design perspective, breaking down considerations on user experience, partnerships and piloting for organizations willing to step into the IoT universe.
Understanding the current context
Three key factors set the stage for organizations to embrace IoT and inform their innovation strategy:
- Growth of Networking Infrastructure – IoT devices now rely largely on existing infrastructure built for mobile connectivity. This reduces the need for large scale investment when compared to other emergent industries, such as electric vehicles.
- Diminishing Hardware Costs – The price of essential hardware components are rapidly decreasing, with some categories such as MEMS (Microelectromechanical systems), dropping 70% in the past 5 years.
- Increased Consumer Acceptance – IoT consumer market share continues to grow as cultural barriers and technological skepticism give way to meaningful value propositions, seamless user experiences, and lower costs.
With these new opportunities emerge new challenges. How can organizations take part of this environment now and leverage IoT into their short and long term innovation strategy?
Providing Meaning to End Users
A critical first step is focusing on meaningful benefits to end users, which in turn provides meaningful and sustainable value. Often in the world of IoT, new products and services end up as novelty successes with very short term or niche value. These are missed opportunities to develop richer services, which could grow and scale over time. We challenge organizations to consider all areas of consumer value, with 5 building blocks we’ve curated to develop IoT products and services: Efficiency, Peace of Mind, Knowledge, Personalization and Joy.
Recognizing the Need to Partner
A second, equally important consideration: how much of the product/service solution should your organization own? Developing an impactful IoT service or product requires multidisciplinary teams and new internal capabilities, which are only as strong as their collaboration together. New internal capabilities are critical for organizations building innovation initiatives. A well thought out partnership strategy can ensure delivering success on time and budget at a much faster rate.
Piloting as a Learning Tool
Launching is the last consideration when developing an IoT product. These products require a quick iterative approach both in hardware and software. The tensions between hardware’s waterfall development process and software’s agile process can be challenging to combine. It’s important to pilot your product in iterations amongst a small user base. By piloting a refined prototype with a small user group, you can make key strategic changes to both hardware and software prior to making larger manufacturing and infrastructure investments necessary to launching a product.
Pathway to success
IoT presents plenty of opportunities for organizations to extend and enhance their current offerings. The organizations that take advantage of this current IoT moment and spearhead evolution will reap the rewards of greater brand awareness and significant advantage over their competition.