James Brehm, Founder & Chief Technology Evangelist at James Brehm & Associates, is regarded as one of the top industry analysts and leading voices on the state of the IoT and M2M markets. A frequent speaker at industry events, James is a regular contributor to CNBC and is frequently quoted by media outlets such as Tech Target, Business Week, RCR Wireless, Computer World, and several daily Business Journals and newspapers.
In this PR Vibes™ Q&A, James shares insight on industries embracing IoT, surprises, what no one is talking about, and a few good books to read.
What are the differences between when you first launched JBA back in 2013 and what you’re seeing now in the market?
Six or seven years ago, there really wasn’t anyone who was focused on IoT. It was all just pure play M2M communications and the industry was in transition. The market was in a “pivotal” time, pivoting from M2M, which pivoted from location-based services and mobile resource management, which pivoted from SCADA, which pivoted from…Oh, you get the picture.
That was an exciting time because we were defining terminology, defining the market, defining the art of the possible. Every other day it seemed you would see 10-12 companies launch in different areas. Venture capital flowed into the space and anyone that could code was trying to create their own platform so they could capture mindshare and revenue in this growing market that no one could define.
Fast forward to today and IoT is less about the internet, less about connecting…less about the thingsthemselves. Now, it’s about extracting useful information, either by using machine learning or predictive analytics, to enrich society and using the products to derive new value and create new economies.
We have pivoted our firm from being one that counts boxes, devices and connections to one that helps our clients understand what’s possible and how to get from point A to point B faster. They may have an idea of what they want to do, but it’s our job to help them accelerate their strategy. Sometimes it’s in saying “no”. Sometimes it’s in helping them define a new economic model away from Capex to an “as a Service” model.
What do you see as the future of IoT?
Servitization. Anything as-a-service. What I see, is, that as we move forward over the next few years, it’s going to be the personification and identity around IoT because “I am the sum of my connected things.”
Think about it. Your connected car should link to your connected ceiling fan, should connect to your calendar on your iPhone, should connect to your frequent flier account, should connect to your connected home automation and security system, should connect to your everything!
When I get to the airport to leave and am parked in long term parking, my car and home automation system should communicate with each other. My home locks should be engaged, my thermostat should go into energy savings mode, and my ceiling fan should shut itself off. You see, I am my car, my ceiling fan, my home automation system, my calendar, my handset and many other things. I am the sum of all my connected things. That’s my digital persona.
Is there a particular market sector that doesn’t come to mind first when it comes to implementing IoT?
Probably the least thought about area to bring IoT technology into would be water. They say oil is the new gold, but I say water is the new oil.
Water from a convenience store costs more per gallon than gas. Look at the problems in the ocean — red tides, blue green algae, plastic waste – plus, we have severe droughts. In California, people have gotten into trouble for hooking up to a fire hydrant to water their properties. There’s a serious lack of water.
One of the companies we work with Capstone Metering, has the technology to take an old stodgy industry (water meters) that measures how much water comes into your house. This startup company focuses on connected water meters, conserving water, and the analytics behind it. They provide Water Meters as a Service. They bring the capital necessary to acquire the meter, dig the hole and deploy the meter, connect it to a network, analyze the data and provide a data stream. They do a proof of concept, train the staff, guarantee the service, and do all the heavy lifting; under a single contract and low monthly fee. No tax raise. No bond issuance. We have been working with them for about five years and their service is really starting to take off.
In a different market, we also work with one of the largest manufacturers of blood bags and the machines that type, cross match, store, and maintain the global blood supply. They want to make it seamless so that the right blood and antigens get to the correct person, as well as making sure that the blood isn’t past the age of usability or has damaged platelets. This company is working to save lives in a unique way.
Another company we met with has a patent on connected smoke detectors. Most insurance companies will give a discount on a monitored service, yet most smoke detectors aren’t monitored. This company will provide a monitored fee-based service linking to the smoke detectxor. If a fire breaks out in your home and either you or a pet is home, the fire department is contacted.
How do you keep your finger on the pulse of the market?
We talk with at least 600 or so different companies, per quarter, across our team. This gives us insight and knowledge to try and figure out how to do what we do faster, better, and avoid mistakes and pitfalls.
Are actual IoT deployments starting to build?
Use cases are everywhere. One of the largest quick serve restaurants in the world has all of their ovens calibrated from a central monitoring location for quality control. They not only know how long the pizza should be in the oven, but when the pizza oven itself needs to be replaced.
These examples are all IoT models to ensure quality, provide a service that is better quality and provide better customer service. Any and all devices that can connect are (or will be connected soon). This is IoT2.0.
Is there anything about IoT that has surprised you?
Several surprises. How many companies do IoT because someone else is doing IoT. There are a lot of followers without vision.
The number of platforms. There is not room in the marketplace for 700 or 800 platform companies. Not many have gone away; there are new ones starting all the time and there hasn’t been a roll-up. It baffles me how much cash gets wasted by companies not generating any revenue but get funding from venture capital funds or friends and families. They try and try and try and don’t generate revenue. The best thing that could happen to many of them is if they bootstrap themselves and realize that if they don’t make money by the end of the year, they just go away.
But the biggie…is sometimes I think it’s Groundhog Day. I’ve been looking at the space long before I launched my own firm. In 2009, I was quoted stating: “As we enter the new hyper-connected world of eReaders, Netbooks, connected Personal Navigation Devices, printers, cameras, Mobile Internet Devices, Smartbooks and the like, we’ve begun to realize that connecting these devices is an incredibly complex process,”… “Although changing business models, flexible pricing plans, and rich application enablement will fuel this growth in the short run, the only ways we will sustain this growth long term is to hide the complexity from the consumer and make the process of purchasing and activating a connected Consumer Electronics device as seamless and simple as possible. Make the process simple, repeatable, and sustainable.”
Why aren’t more people working on the business model and business case, rather than creating a technological solution for a problem that doesn’t exist?
Do you see a financial correction coming?
I see a bubble. But as long as benefits exceed costs, we’ll be ok. VC firms really love software companies and despise hardware companies. If there is one thing I’d like to say to every venture capitalist out there, it’s this: There is a thingin the Internet of Things. Hardware is a necessity.
The Internet of Things is not built around the Apple ecosystem or the Android ecosystem. It’s built around the makers of everyday items out there — cars, filing cabinets, refrigerators, massage chairs — that have analytics in them. It’s difficult to tie these things together because there are many platforms that are not communicating. My SUV, my luggage and my ceiling fan are not communicating so they don’t all know that my car is in long-term parking, my luggage has been checked in at the airport and my ceiling fan needs to shut itself off.
And, everyone talks about autonomous vehicles. I was driving on the interstate in Florida on my way to a meeting and I’m thinking an autonomous vehicle wouldn’t know how we are driving or when we are going to make a move and go left or right. One person just doesn’t drive the way another person does. It’s not about the vehicle being able to drive itself. It’s about the “what ifs” out there and the what ifsare always what causes challenges. So many people are saying self-driving cars are going to happen immediately, but we don’t even have autonomy on lights turning off in our home so the likelihood of an autonomous vehicle happening in a few years is very unlikely.
Is 5G necessary to the success of IoT? Any predictions?
5G is a specification that’s about cellular, and that’s a fraction of the wireless connectivity for IoT. I grew up in a small town in Iowa and when I go back home to visit friends and family, we still have trouble getting network service. It’s as if it’s 1984 again and that’s not just Iowa, it’s a lot of other places too that don’t have 4G.
Metcalfe’s Law says the value of a network is proportional to the exponential number of its end points. For me today, 5G is worthless and 4G is just becoming valuable. If you do the number counts like I do, 70 percent of the connected IoT cellular devices in the US are 2G and 3G. Only 30 percent are 4G and zero percent are 5G. All of the talk about 5G is nonsense to me. We should just be beginning to talk about 4G.
What 5G does is it allows data to transmit faster. It allows for less latency and basically for better spectrum utilization, which is the plus. But there are other ways to get to this, such as for the FCC to work with other governments to do spectrum harmonization.
I’m a believer that the network isn’t just what the carrier puts up. The network is the sum of the devices out there and there are only a handful of 5G devices in the world. What about cars, computers, washing machines that can’t yet accept 5G?
As for predictions, 6G is just around the corner! (Laughs.)
What does JBA offer the IoT industry?
No one client is the same. A lot of IoT today is technology that’s looking for a problem. We are still in the infancy of what IoT is so we’re doing our traditional market intelligence services — market size/market share forecasting and competitive intelligence – and we add vertical and horizontal strategies to accelerate growth. We also help companies focus on security and what standards apply.
We have gotten involved in projects such as helping someone figure out who to partner with or what their revenue model should be or what vertical market should they go after. We’ve helped clients determine who to use for their underlying infrastructure. Do they connect via Wi-Fi, Bluetooth, Zigbee, Z-wave, or cellular? What should their software development stack look like?
And, are there any other use cases for their products and services and what else should they do with the data? For example, the free-standing machine they’re using information from could be used for other applications. Connecting vending space machines and predictive analytics around what people are buying are some interesting use cases we’ve seen.
There’s a frequent quote that says there are three reasons to do IoT:
1. Make money
2. Save money
3. Stay out of jail (the jail being compliance – regulatory adherence).
What people are discovering is that there are as many reasons to do IoT as there are stars in the sky right now.
Finally, do you have any book recommendations?
Yes, as a matter of fact I’m a big reader and have several recommendations. “The World Is Flat” by Thomas Freedman and “The Long Tail” by Chris Anderson. They will tell you more about IoT and where we’re moving.
“Naked Conversations”by Robert Scoble and Shel Israel. It’s all about social media. Wait until our machines gain autonomy and become social. “1984”by George Orwell. Anything by Malcom Gladwell. “Blink”, “Outliers”, “The Tipping Point.”
But perhaps the two books that have helped me and our organization more than anything are “The Five Dysfunctions of a Team”and “Silos, Politics and Turf Wars: A Leadership Fable About Destroying the Barriers That Turn Colleagues Into Competitors,”both by Patrick Lencioni.
What’s Next for James Brehm & Associates?
Well, we’re growing and evolving. Private equities and large strategics are leaning on us to help them find good companies to acquire.
We’re hosting IoT events at several trade shows including Sensors Expo, Modex, and Mobile World Congress. If you’d like to participate or sponsor, just reach out to me or any member of the JBA team.
For more information about JBA’s client defined custom market research, our subscription services (The Connected Conversation), or if you’d like to take part in our podcast (“The IdIoTs”), create a whitepaper, participate in a webinar, or hold a briefing, email us at firstname.lastname@example.org or call me directly at 210-630-8611.
We’re always available to talk with companies in the space.
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