Last week the New York Times broke news of a top secret lab where secret Googlers are tinkering on more than 100 fantasy projects that may or may not ever come to market. It’s called Google X Lab and it’s filled with robots, self-driving cars (those are definitely real) and real-world devices not traditionally connected to the Internet that will be wired-up into a future Web of Things.
What if Google doesn’t get connected devices any better than the company allegedly “doesn’t get social” technologies, though? Just because the advertising and search giant is working on it doesn’t mean Google can really build an elevator to space, of course. In the mean time, other companies are building connected device technology that sounds futuristic but is actually going to market right now. Those companies may compete with Google in the future; just as Google didn’t invent the search market it now owns, incumbents can’t rest easy yet just because they’re first, either. But what they’re bringing to market already is pretty cool.
A Ten Year Old Market, Now Changing Fast
Ten year old Massachusetts firm Axeda is a leading provider of what it calls “a cloud for connected products.” It provides a cloud-based software layer that draws in streams of device sensor and machine data originally intended only for monitoring the firmware of say a dishwashing machine, translates that into discernable business objects like temperature, location and performance metrics, then offers an application programming interface for developers to interact back with the real-world devices that the data was gathered from.
I don’t often take calls from companies that say they want to tell me about themselves based on a well-known story in the news, like Google X, but Axeda is really interesting and has some great stories to tell about connected devices that are on the market today or will be very soon. The following are the examples they shared and a good overview of the kinds of things that connected devices, what Google calls the Web of Things, what others call the Internet of Things and what Axeda calls the cloud for connected products, is shaping up to look like.
The connected device market is dominated today by healthcare applications, and some examples of those are discussed below, but the paradigm is already extending into other applications throughout everyday life.
Speed Signs as a Service
If you’ve ever driven past one of those big signs on a road that show you your own driving speed, you might have wondered who else was seeing that information. Originally, no one else was. A company called AllTraffic sold those signs to government agencies around the US as a hardware play. Stick it on the side of the road and show people how fast they are going – hopefully it will cause speeders to slow down.
About a year and a half ago, though, they connected those blinking signs to a web portal accessible by police headquarters and citizens, using Axeda’s connectivity technology. Now they sell access as a subscription and they’ve changed from being a hardware vendor into a software and service vendor.
Bill Zujewski, EVP of Product Strategy and Marketing at Axeda, says that the effect in that case is the same kind of thing Google is going to try to do: to change the consumer experience by adding connectivity to devices. Everyone knows what it means to have OnStar added to a car, for example – it enables emergency services on a whole new level. Now think of that same kind of experience-changing connectivity added to other products.
Kodak’s Pulse photo frames, for example, represent the same kind of shift – that company took a commodity object, the picture frame, and turned it into a wired-up social center of consumer value. Anyone in possession of the right email address can send photos directly from their phones into the picture frames of family members.
Meanwhile, insurance companies are working on pulling the information out of a car’s engine that mechanics do during diagnostics and sending it persistently over a cellular connection, up to a web portal for end-user applications. Teen drivers won’t be able to speed, hit the brakes hard or drive through geofences without that being visible to any approved eyes.
Managing the Machines
Zujewski says Axeda works primarily with B2B companies, traditionally in the form of asset management. One company that provides high-end industrial equipment for cutting fabric, outside the price range of many small firms in the clothing and apparel industry, has begun using Axeda’s technology to embed a “pay as you go” model. A sensor takes data off the equipment, sends it to the equipment provider via cellular connection and then sends a monthly bill charging for the amount of use the machine saw.
Likewise, there are places around the world, Zujewski says, where fabric cutting machines get used in excessively high heat and humidity. The machines keep breaking and it’s expensive to repair them under warranty – so machine manufacturers find it quite valuable to be able tomonitor that the conditions their equipment is being used in are compliant with the terms of those warranties. All it takes is a USB port. It’s too bad they can’t monitor the working conditions of the factory wetware the same way. There may be eternal judgement for that, though.
Machines in the Home
Medical devices are one of the primary use-cases for device connectivity, but that doesn’t always mean in-hospital inventory. Sometimes it means enabling people to avoid hospitals.
Zujewski says his company is working with a manufacturer of kidney dialysis machines, for example, to add monitoring and connectivity to equipment that usually requires weekly trips into a hospital. “By connecting them, the providers can monitor them,” he says, you call pull data off the machines to make sure they’re working well. There are lots of consumables [medication] involved with dialysis and connected monitoring technology can automatically create an order to ship replenishment of those when needed.”
“Some of these efforts may connect to mobile apps, but we connect to the cloud as our primary focus,” Zujewski says.
“I think Google may think there’s an Android play here as well, connecting things like sports equipment, your home and your car to communicate with your mobile device.”That’s the future where things are going: your appliances in your home are getting more computerized, they are running more on software than on mechanical parts.”
This Dishwashing Isn’t Just Magic, It’s Efficient
Zujewski shared a story with me about a dishwasher manufacturer that made a mistake. The company didn’t program its rinse cycle to be long enough and was getting thousands of phone calls from customers complaining that the machines weren’t working well. The company sent a technician out to reset the rinse cycle timers – but future iterations of the machines saved all those costs by adding read/write cellular connections to the dishwasher computers that could be re-calibrated remotely.
Ovens, dishwashers, all kinds of appliances get shipped from the factory with certain assumptions. Add connectivity and they can be optimized, in the field, remotely.
That appeals to manufacturers and consumers – but once the computer is on board, you may as well start building apps that add value directly to the consumer as well.
Want to start the pre-heating cycle from your phone, while on your way home? Can’t remember if you turned your oven off or not? An application framework layer on those devices enables engagement with the devices themselves via mobile device.
“Because cellular connection capabilities for these devices are coming down from hundreds of dollars, sprinklers, garage doors, smoke detectors, all kinds of things are being experimented with as connected devices,” Zujewski says. “It wasn’t economic before because consumers wouldn’t pay for that connectivity, but if it was a couple cents a month, then they will. Right now, costs are around $50 per month to retrofit devices with connectivity, but if you can do it with a chip involved at the origina of design, it can be around $10 per month.”
If you can engineer connectivity right into the product from the start, the price drops dramatically. The sales cycle is long, though, because it takes years to bake connectivity into the core of a device.
And cellular carriers still need to adapt, Zujewski says.
“Carriers are set up for consumer plans, not M2M [Machine to Machine] – that will require unique data plans.”
The Challenges Ahead
If you think Twitter and Facebook spew out a large quantity of data, imagine a refrigerator “checking in” about its temperature and contents all day and night.
“Ideally you could put some intelligence on the device itself so you don’t have to send all your data over the network all the time, but process it locally,” says Zujewski.
“You can now build mini-computers that run the whole Linux kernel on an intelligent agent, locally, and only send data when it changes, with threshold rules, for example. People are starting to put M2M computers on devices and make the processing local.
“The other thing happening is that a lot of early customers use 2G, but they are upgrading to 3G and 4G so even if they have to send a lot of data, the price is falling.
“Storage prices have come way down and we’re using non-relational stores to keep our costs down.”
Will Google Flush M2M Down the Crapper?
What of Google’s entry into the market, though? Are incumbents like Axeda scared?
“Google getting in is a good thing for us,” says Zujewski.
“It’s going to raise the awareness of M2M. When executives in the board room say ‘I see Google connected a smartphone to a dishwasher, why can’t we connect to our equipment or our products?’ it’s going to raise the visibility of what you can do.
“What Google is going to find out is that connecting is pretty hard, a lot of devices aren’t serving data that’s usable. There is a need for a layer that turns the raw available data into usable data like temperatures, etc. into a data model that programmers can use.
“That’s our secret sauce, our unique value proposition: our technology converts raw data into business data.
Zujewski says that most of these data production schemes were implemented by dishwasher or road sign producers five years ago, with no intentions of offering a standardized web services application data layer. They didn’t want to shoot data over pricey networks and store it in expensive storage systems. They just wanted to use a computer in the machine. Everything has changed since then, though. Add connectivity and you’re talking about a qualitatively different phenomenon. Bridging the gap between the status quo and the future is, in this case, non-trivial, Zujewski says. Axeda has to do the work to turn low-level protocols into semantically rich protocols.
“That’s changing,” says Zujewski of the device manufacturers.
“They are going to start embedding our protocol and sending intelligent data over networks. One of our goals is to get our protocol in as many devices as possible.
“We’re fine if Google takes the time to push a protocol, we could embrace that if it takes off. We’ve got a codex server that will translate anything into Axeda protocol and we’ll probably just adopt whatever Google does or support it.
“It’s hard to tell what they’re really aiming to do because you can’t tell what their business driver is. Fortunately for them, they have the luxury of setting up these labs without worrying about that too much right now.”
Axeda has been around for ten years and has seen the technology intended for manufacturer cost-savings turn into a nascent platform for value delivered to consumers and a point of competitive differentiation.
“The business case to date today has been about taking costs out of managing your products, remote service and software management,” Zujewski told me. “That’s been paying our bills. But we’re also starting to see revenue generation of connected products where the connectivity serves the user. It’s a competitive differentiator and device vendors will soon begin competing with value added services based on connectivity.”
How fast will this paradigm reach ubiquity? Zujewski says Axeda is working with one vendor that’s network-connecting…toilets. From prisons to large exhibit halls, you don’t want water running day and night from a large number of toilets. Axeda’s sensor-cloud-application platform can detect, report and facilitate management of one toilet out of a thousand that’s broken. That’s not live yet, but toilets will be connected to the Internet in 2012, Zujewski says.
That may be the future, but not by very far.
What have you got, Google?
Smartphones and handheld devices are laying out the path to mobile computing, a phenomenon and trend in technology that is heartily embraced by users all over the globe. As a result, mobile browsing activity has increased by 1000 percent from 2009 to 2011 and still currently on the rise as steady sales of smartphones and mobile devices (with internet enabled features) increases and never decreases in demand.
The rise of mobile browsing is a proof why mobile optimized web design is necessary to enable businesses with websites reach the millions of mobile users who access the internet every day. According to statistics, an estimated 25 percent (1 in 4) of mobile users access the internet at least once daily.
The Need for Mobile Optimized Web Design
A website design both optimized for web and mobile browsers is necessary to effectively reach more audiences. It should be flexible and compatible to any types of platforms and can detect mobile visitors. This increases the possibility of attracting potential customers, and pleases the current ones.
Failure to optimize your website for mobile browsers could mean a great loss of potential leads and conversions that could have gotten you a steady flow of business profits.
Is Mobile Web Design Optimization Affordable?
You might be wondering if how much it would cost you to have your website design optimized for mobile browsers. But, the important question you should ask yourself is can I afford NOT to have a mobile optimized website?
You should consider weighing the advantages brought by a mobile optimized website against the disadvantages of not having one. As the mobile market is constantly growing, you should take the advantage of lesser competition as there are still lots of businesses who haven’t realize its importance. Once the market will become saturated, you’re already on the top, enjoying the privilege of the first ones that made the shift.
Though optimizing your website for mobile users may cost you a bit, but it is worth the investment. Its long-term benefits and advantages will not only help your business grow but will also diversify your source of traffic and help your target audience find your services anywhere and anytime at the helm of their pockets.
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Key Terms to know:
3g vs 4g:
A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.
For hard-core runners, carrying money during a workout can get messy. Many running shorts lack pockets, and those that have them haven’t quite figured out a way to keep the sweat out (we know–gross).
Philadelphia-based Vitaband solves the problem once and for all: The rubber wristband includes a contactless Visa Prepaid debit chip. By setting up and preloading a Bancorp debit account connected to the Vitaband’s chip, wearers can race into any 7-Eleven (or thousands of other merchants) to grab a Gatorade or PowerBar and pay for it by waving their wrists near the wireless payment reader. No need to fumble with sweat-soaked cash or deal with uncomfortable credit cards stuffed into running shorts.
The concept has other benefits; in addition to the debit card, Vitaband bracelets connect to a data file with the wearer’s name and a personalized medical history. In the event of an accident, EMTs can call the toll-free number on the band to download the wearer’s information.
The idea came to Jason Brown after a near miss with a car while jogging. “Out of something potentially disastrous came something practical,” he says.
Brown and his childhood buddy David Waxman founded Vitaband in 2007. They made the decision to not manufacture the bands themselves, but instead to license the health record and debit chip platform to manufacturers to place into all sorts of wearable products, such as watches and clothing.
“We realized that we didn’t want to be in the consumer products business,” Waxman says. “That wasn’t our strength to begin with.”
For Brown and Waxman, it has been a lean five years to reach this point. Initial prototyping took months, and it took even longer to convince manufacturers such as Nathan Performance Gear that the technology was worth licensing. During this process the two buddies have put up about $50,000 of their own money, hit up friends and family for funds and, most recently, turned to investors for additional help. The duo has amassed roughly $750,000, most of which goes into development and marketing.
Looking forward, Waxman says the company’s next challenge will be licensing the platform to manufacturers who serve other markets, including children and senior citizens, as well as health insurance companies. “It’s such an easy way to add an extra layer of service and safety to nearly anything,” he says. “We haven’t come close to tapping its full potential.”
It goes without saying that Facebook is the darling of this era’s technology boom. However, as many have repeated over the last month since its IPO, the company is now turning to face some major obstacles. Namely, adoption of the service is slowing, and the company is making little revenue off its increasingly large base of mobile users. I’m going to explain how Facebook can both supercharge user adoption – potentially hitting three billion users by 2014 – and who they can work with to boost their mobile revenues drastically.
In fact, the strategy may seem counter-intuitive in its simplicity: Facebook must prepare to go old school and partner with wireless carriers in its fastest growing emerging markets.
Find Tomorrow’s Smartphone Users
Today, there are five billion mobile connections across the globe. According to Cisco, by 2016, this number will double to 10 billion connections across eight billion mobile devices. Facebook has the opportunity to be installed on every single one, but the company must start now in order to get in front of this coming wave of smartphone adoption.
Who are the smartphone users of tomorrow? The feature phone users of today.
Facebook’s long-term vision and successfully monetizing mobile depends on penetrating this market. The company knows this: they’ve improved the biggest draws of Facebook on mobile, the News Feed, released the standalone Facebook Camera app, and are rolling out a mobile-only ad platform.
On the feature phone side, they acquired Snaptu in March 2011 – an app platform that allowed users to access services like Facebook and Twitter from web-enabled feature phones. They rolled the technology out as Facebook for Every Phone in June 2011, and partnered with hundreds of operators around the world to entice users by making the associated data free for 90 days. In the year since, the app page has registered a whopping 90 million likes.
With today’s social juggernauts building their mobile services exclusively on smartphone platforms like iOS, Android, and Windows Phone, they are leaving out an enormous potential user base: 90 percent of mobile users in the developing world do not have smartphones.
For example, mammoth developing economies in Asia such as China, India, and Indonesia all have a smartphone penetration rate of less than 10 percent, compared to 50+ percent in the U.S. and most developed countries. Moreover, 90 percent of those feature phones do not even have data connectivity. Thus, even companies that build apps enabled for feature phones, are still missing out on the masses in extremely large developing markets.
Catering to feature phone users in the developing world in the short-term allows companies to ensure a vast upside in five years, as users accelerate their migration towards lower-cost smartphones. Services and social networks like Facebook are currently only addressing the tip of the iceberg of this unrealized upside. They should look to entrench their services even deeper into the developing world in order to fuel mass growth and user adoption.
After all, while average ARPU of these feature phone users in developing markets is significantly lower than smartphone users in developed markets and the mobile ad revenue markets are still in their infancy, the consumers willing to pay for subscription service and access to social media services is phenomenally higher than in developed markets since paying for these types of services via a prepaid card is the norm and far more frictionless.
Friending Emerging Market Operators
Many of Facebook’s services can be adapted to feature phones via very basic telephony services – SMS and voice networks for retrieval of updates and USSD for authentication and login. Thus, a user wouldn’t even need a data connection, much less a smartphone or app. Of course, this is not an easy endeavor and requires deploying servers in an operator’s network, but looking at the new users it would bring to the service, it is an extremely small price to pay. This would allow the
billions of users on feature phones with no data connectivity in feature phones to access the service – and their willingness to pay a monthly subscription for this is extremely high. Moreover, it acts as bridge to higher tech mobile devices as consumers upgrade over the next five years.
Working with mobile operators can be challenging, but ultimately phenomenally rewarding. For example, my company Bubble Motion was able to attract 17 million users in less than two years and monetize them quite significantly, with no marketing spend whatsoever, by working directly with wireless carriers in a handful of target countries across Asia. Our potential user footprint is a whopping 2+ billion feature phones, which is far beyond what we could’ve hoped for on a smartphone app. We recently launched a smartphone app version of
our service, Bubbly, but for the foreseeable future, our feature phone users will be the overwhelming majority of our revenue stream. Like I said, while ARPU of smartphone users may be higher, the willingness of social media-starved feature phone users to pay for services is significantly higher.
By cracking a few deals with mobile operators in target high-growth countries, Facebook could see their user numbers shoot upwards once again. Facebook has some experience in this already – they’ve already partnered with AT&T, Verizon and T-Mobile in the U.S. and with Bango in the U.K, mostly to streamline payment
through Facebook credits charged directly to user mobile bills.
They’ve also partnered with emerging market carriers to peddle their feature phone app – but only on superficial levels like subsidizing data costs for users for 90 days. Compared to the App Store model, leveraging operator networks makes it much easier to reach
the masses. On the other hand, working with operators is not easy, which is why so many Valley companies have shunned the idea. However, those with the scale and reach of Facebook or Twitter, need to embrace operators to take their user growth and service to the next level.
Facebook Can Start Making Money in Mobile
It won’t be a lot at first, but by working with mobile carriers, Facebook can extract a healthy revenue share from operators. For example, our current average revenue per user (ARPU) is around $4 in Japan – this is the same amount Facebook makes off of its web-based U.S. users, where it has established a strong ad revenue model.
By contrast, we’re making it solely off usage and access via mobile, which users are completely okay with when accessing services via their mobile device.
Feature phone users can spend money much more easily than their smartphone counterparts (especially those on Android), due to the fact that they are tied into a network’s billing service. In Asia and most developing markets, a very small percentage of smartphone users have entered their credit card information into Google Play for app purchases – in fact, most do not even have credit cards! Direct
billing makes up for the greater engagement and web-access that comes with using a smartphone app. In fact, as I write this article, Facebook is announcing frictionless
payments in collaboration with mobile operators. However, this still does not
address the feature phone users without a data plan, which is the overwhelming majority of mobile users globally. This is where integrating tightly with operators, especially in emerging markets, will pay huge dividends.
As feature phone users become increasingly engaged with the service and then upgrade to smartphones, this trickle will turn into a torrent. They’ll be much more likely to open their wallets after having done so in the past – you have to attach the hose before turning on the water.
Although partnering with mobile operators is something Facebook has been working on over the past year, expect to see them double down on these efforts in the years to come. To date, it has been primarily focused on getting them to make data charges free for accessing Facebook via their mobile device. Once again, this is great, but does not address those that do not even have data plans – which are the true masses.
All of these lessons come from experience. Our service started out as an operator- embedded service via voice calls and SMS, similar to Twitter in the early days, and has only recently launched a smartphone app version. This has enabled us to both attract a massive audience – one which is now following the evolutionary path as they migrate towards smartphones and a higher-touch experience, all while sticking with our service. In that way, we find ourselves well positioned for the coming Asian smartphone boom.
Although Facebook has made some good strides in this direction, it should double down and embrace the emerging market trend in order to find the serious money in mobile.