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MIT Technology Review Business Report The Internet of Things NI PDF
MIT Technology Review Business Report The Internet of Things NI PDF
The Internet
GEs $1 Billion Software Bet
of Things
Silicon Valley to Get a Cellular Network,
Just for Things
Business Adapts
to a New Style
of Computer
Are companies ready for billions of
everyday objects to join the Internet?
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MIT TECHNOLOGY REVIEW
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measures pressure and sends data by ful, power-hungry chips, was shut out is what is going on. We are assimilating the
radio to the cars central computer. Its of phones. So was Microsoft. Now both world into the computer. Its just more and
starting to add up. The average new car these companies, and many others, are more computers. Antonio Regalado
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ers connect to it, together with a gover- platform business models are like play-
Leaders nance model, which is the rules of who ing 3-D chess.
gets what. Business platforms are often
engaged in consummating a match. Its
The Economics
You estimate that half the top 20 com-
a match between riders and drivers with panies in the world, like Google, own
Uber. Its between travelers and spare
of the Internet
platforms. Why are they winning?
capacity of guest rooms in Airbnb. There is a strong argument that plat-
forms beat products every time. Think
of Things Is connecting ordinary objects, like of how the iPhone is absorbing the fea-
toasters, to the Internet going to trigger tures of the voice recorder, the calcula-
As everyday objects get connected, new platforms? tor, and game consoles. The reason for
brace yourself for network effects, says Absolutely, yes. But you cant stop at this is that as a stand-alone product,
one economist. the connectivity. The technologists mis- youre going to have a certain pace of
take is often to stop simply at the stan- innovation. But if you have opened
Product companies compete by build- dards, the connections. You also have your product so that third parties can
ing ever bigger factories to turn out ever to add the reasons for other people to add value, and you have designed the
cheaper widgets. But a very different add value. That often means allowing rules of the ecosystem such that they
sort of economics comes into play when recombination of features in ways that want to, your innovation curve is going
those widgets start to communicate. Its you, the original designer, just cannot to be faster.
called the network effectwhen each new anticipate. People have combined the To me this means there are huge
user of a product makes its value higher. functions of the iPhone into hundreds of opportunities to take away business
Think of the telephone a century ago. thousands of apps that Apple never even from existing players in all different
The greater the number of people who conceived of. That is also what the Inter- kinds of goods. Or for existing players
used Bells invention, the more valuable net of things enables if you design it in to expand their markets if they are pay-
it became to all of them. The telephone the right way. ing attention.
became a platform for countless new busi-
nesses its inventor never imagined.
Now that more objects are getting Most companies compete by adding new features to
wired up into networksstreet lights, products. They havent been in the business of thinking of
wind turbines, automobilesthere how to add new communities or network effects.
are opportunities for new platforms to Marshall Van Alstyne
emerge. Thats why some companies
are seeking the advice of Marshall Van
Alstyne, a business professor at Boston Whats an example of this happening? What are some of the next areas for
University who has studied the econom- Philips Lighting just called me. They platforms?
ics of e-mail spam and social networks. are adding a series of APIs to their LED Its where you see connectivity is coming
These days, Van Alstyne studies plat- lights so anyone can create millions of in. Cities, health care, education, elec-
form economics, or why companies such colors, create romantic mood apps or tricity grids.
as Uber, Apple, and Amazon are so suc- the colors of a sunset from one of your
cessfuland what traditional product favorite trips. You can change the lights What are the biggest challenges?
makers can do to emulate them. MIT in your study in conjunction with the In many cases, the governance mod-
Technology Reviews senior editor for stock market conditions. That is the els have not been established. For
business, Antonio Regalado, visited Van Internet of things, and theyre opening instance, population density can be
Alstyne at his office in Boston. it to anyone. determined by mobile-phone distri-
bution. A telecom company owns that
How can I tell if a business is a platform? Do product companies have a difficult data. How do you motivate them to
If you produce the value, then you are a time making this kind of transition? share it? All these sensors are captur-
classic product company. But there are They have a really difficult time with ing data, but how do you divide the
COURTESY OF REDACTIE EMERCE
new systems where value is being cre- the mental models. Its fascinating. value? Those are the rules that need
ated outside the firm, and thats a plat- Most companies compete by adding to be worked out, and thats the miss-
form business. Apple gets 30 percent new features to products. They havent ing piece of most of these discussions
of the cut from other peoples innova- been in the business of thinking of how about the Internet of things. You have
tions in its app store. I define a platform to add new communities or network to build economic incentives around it,
as a published standard that lets oth- effects. One of the points I make is that not simply connectivity.
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2,570
Actual demand
2,530
THERMOSTATS ACTIVATED
2,490
2,450
2:00 p.m. 4:00 p.m. 6:00 p.m. 2010 2014 2018
electricity use can be lowered just enough dents habits and preferences and can pro-
Case Studies at peak times, utilities can avoid firing up gram heating and AC settings. A Wi-Fi
costly (and dirty) backup plants. connection brings in weather data and
Demand response is a neat trick. The allows consumers to control the system
The Lowly Nest thermostat manages it by combin- with a phone or Web browser.
ing two things that are typically sepa- Data is just the start. Just as Google
Thermostat, rateprice information and control over parlays what it knows about you into
demand. Its consumers who control the tools for advertisers on the Web, Nest is
Now Minter air conditioners, electric heaters, and using its capabilities to create new types
furnaces that dominate a homes energy of services for utilities to buy. We can
of Megawatts diet. But the actual cost of energy can vary go to utilities and say, Weve actually got
widely, in ways that consumers only dimly a lot of customers in your service terri-
How Nest is turning its consumer hit into appreciate and cant influence. tory who already have a Nest, says Scott
a service for utilities. While utilities frequently carry out McGaraghan, Nest Labs head of energy
demand response with commercial cus- products. And [then we] can flip it on.
Googles $3.2 billion acquisition of Nest tomers, consumers until now have shown Austins municipal utility, Austin
Labs in January put the Internet of things little interest. Nest Labs breakthrough Energy, is one of five utilities that have
on the map. Everyone had vaguely under- was to make a device that has popular signed up for Nest Labs Rush Hour
stood that connecting everyday objects to
the Internet could be a big deal. Here was
an eye-popping price tag to prove it. Once inside a home, Nest starts its real work: gathering
Nest, founded by former Apple engi- data. It has a motion detector; sensors for temperature,
neers in 2010, had managed to turn the humidity, and light; and algorithms that learn residents
humble thermostat into a slick, Internet- habits and preferences.
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every thermostat it enrolls, and another tricity consumption tests the grids lim- A moment later, the conference room
$15 per thermostat each year after that. its most. But if demand response can where we were sitting darkened.
The vast majority of the 5,500 expand to cover the 300 or 400 hours of It may seem like Rube Goldbergs idea
thermostats registered so far are Nests, peak usage, it could entirely shut down the of how to turn off a light. Or it could be
according to Sarah Talkington, the Aus- market for peakers, or gas-fired plants the beginning of how lighting companies
tin Energy engineer leading the program. that come online only to sell expensive such as Philips find their way from selling
Nest says it finds that roughly half its cus- electricity. Thats a big chunk of money lighting hardware into networks, soft-
tomers will sign up for demand response thats at stake, says Tom Osterhus, CEO ware, apps, and new kinds of services.
when the opportunity is offered. of Integral Analytics, a Cincinnati-based The introduction of networked lights
By the end of last summer, Talkington maker of smart-grid analytics software. is happening because of another trend.
says, she could log on to a Nest portal and, Its in the billions. Peter Fairley Manufacturers have been replacing incan-
with a few keystrokes, dial down the next descent and fluorescent lights with ultra-
days demand by nearly 5.7 megawatts. That efficient LEDs, or light-emitting diodes.
may seem small compared with the 2,800 Case Studies The U.S. Department of Energy says that
megawatts that often sizzle across the Aus- LEDs had 4 percent of the U.S. lighting
tin grid, but every watt counts. On hot days market in 2013, but it predicts this figure
like September 3, 2013, as temperatures The Light Bulb will rise to 74 percent of all lights by 2030.
rose to 104 F, the cost of power spiked to Because LEDs are solid-state devices
a record $4,900 per megawatt-hour. Gets a Digital that emit light from a semiconductor chip,
Austin had tried residential demand they already sit on a circuit board. That
response before, using one-way pagers to Makeover means they can readily share space with
turn air conditioners on and off. But the sensors, wireless chips, and a small com-
utility couldnt know if customers were Electric lights are 135 years old. The puter, allowing light fixtures to become
home, so it wasnt able to shut off any one Internet is 45. Theyre finally getting networked sensor hubs.
air conditioner for long. Nest, in contrast, connected. For example, last year Philips gave
builds a thermal model of each house and outside developers access to the soft-
predicts how quickly it will warm up. It ware that runs its Hue line of residential
can also guess whether people will be LED lights. Now its possible to down-
home. The result, says McGaraghan, is load Goldee, a smartphone app that turns
that Nest can maximize energy savings your house the color of a Paris sunset, or
and minimize annoyance to residents. Reflector Ambify, a $2.99 app created by a German
Talkington predicts the residential programmer that makes the lights flash to
7 LEDs
program will enroll enough homes to save Heat spreader
music as in a jukebox.
more than 13 megawatts through demand Thats a very different kind of business
Circuit boards:
response this summer. Even if Austin gives from selling light bulbs, as Philips has
Radio chip
out $2 million in rebates, that is cheaper done since 1891. With the new digitiza-
than increasing power supply by build- 512k of tion of light, we have only begun to scratch
computer
ing a natural-gas-fired generator. Accord- storage the surface on how we can control it, inte-
Philips
ing to Michael Webber, co-director of the Hue grate it with other systems, and collect
clean-energy incubator at the University LED light rich data, says Brian Bernstein, Philipss
of Texas in Austin, new power supply costs Price: global head of indoor lighting systems.
$500,000 to $4,000,000 per megawatt of $59 each Another look at how lighting systems
capacity, depending on the type of plant. are changing will emerge this Novem-
Webber believes that within five years ber, when a 14-story regional headquar-
the vast preponderance of Texans will ters for Deloitte, nearing completion in
have smart thermostats. And Nest knows To demonstrate how the Internet is Amsterdam, will be festooned with net-
that whoever builds this network first changing one of the oldest and least excit- worked LEDs in each fixturethe first
could win big, especially as other energy- ing technology businesses around, Shane such installation for Philips.
consuming devices, like electric cars and De Lima, an engineer at Philips Lighting, Each of 6,500 light fixtures will have
hot-water heaters, also get wired up. took out his smartphone. A flick across an IP address and five sensorsall of them
COURTESY OF PHILIPS
Eventually, the effects of demand the screen sent a message to a nearby wired only to Ethernet cables. (Theyll
response could be profound. Austins pro- Wi-Fi router and then to wireless hub, use power over Ethernet technology to
gram is designed to manage demand only which shot a radio command to a chip in deliver the juice to each fixture as well as
during the 50 hours each year when elec- the base of an LED lamp in front of us. data.) The fixtures include a light
5
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sensor to dim the LEDs during the day, many of them programmers and data
and a motion detector that covers the area Service Play scientists.
directly beneath each light and turns the GEs industrial revenues are split between sell- People have told companies like GE
ing products and servicing them.
light off when no one is there. We expect for years that they cant be in the software
Revenue in billions ($) in 2013 n Products
to spend 70 percent less on light, because business, Immelt said last year. Were too
n Services
systems [give] us much more control, slow. Were big and dopey. But you know
says Erik Ubels, chief information officer 30 what? We are extremely dedicated to win-
at Deloitte in the Netherlands. Additional 25 ning in the markets were in. And this is
sensors in the LED fixtures can monitor 20 a to-the-death fight to remain relevant to
temperature, humidity, carbon dioxide, 15 our customers.
and heat, turning the lights into a kind of 10 Peter Evans, then a GE executive, was
building-management system. 5
given the job of shaping what he calls the
Prices for LEDs are high but falling meta-narrative around GEs big launch.
quickly. A dumb LED that puts out as Q1 Q2 Q3 Q4
Industrial companies, which prize reliabil-
much light as a $1.25 incandescent bulb ity, arent nearly as quick to jump for new
now sells for $9 (but uses one-sixth the
energy and lasts much longer). Thats down
from $40 each a couple of years ago. A con-
nected LED bulb from Philipss Hue line
This is a to-the-death fight to remain relevant to our
retails in the U.S. for $59. But these will
customers.
get cheaper, too. Philips says a third of its
General Electric CEO Jeffrey Immelt
lighting revenue now comes from LEDs,
and about 1.7 percent from the newer LEDs
that can connect to the Internet. Internal surveys had discovered that technology as consumers. So GEs indus-
Many other uses are being explored. A GE sold $4 billion worth of industrial soft- trial-Internet pitch was structured around
department store in Dusseldorf, Germany, ware a yearthe kind used to run pumps the huge economic gains even a 1 percent
is using LEDs to send out light frequen- or monitor wind turbines. Thats as much improvement in efficiency might bring to
cies that communicate with shoppers as the total revenue of Salesforce.com. But a number of industries if they used more
smartphones. Philips has placed street these efforts were scattered and not always analytics software. That number was fairly
lights in Barcelona that react to how many state-of-the-art. And that gap was turning arbitrarysomething safe, just 1 percent,
people are strolling by. David Talbot dangerous. GE had always believed that recalls Evans. But here Immelts marketing
since it knew the materials and the physics skills came into play. Not just 1 percent,
of its jet engines and medical scanners, no he said, flipping it around. GEs slogan
Leaders one could best it in understanding those would be The Power of 1 Percent.
machines. But companies that specialize In a stroke, GE had shifted the discus-
in analytics, like IBM, were increasingly sion about where the Internet was going
GEs $1 Billion spooking GE by figuring out when big- next. Other companies had been talking
ticket machines like a gas turbine might about connecting cars and people and
Software Bet failjust by studying raw feeds from toasters. But manufacturing and industry
gauges or vibration monitors. account for a giant slice of global GDP.
To protect lucrative business servicing This was no small thing. GE sells $60 All the appliances in your home could be
machines, GE turns to industrial Internet. billion a year in industrial equipment. But wired up and monitored, but the kind of
its most lucrative business is servicing the money you make in airlines or health care
To understand why General Electric is machines. Now software companies were dwarfs that, Immelt remarked.
plowing $1 billion into the idea of using looking to take a part of that pie, to get There is another constituency for the
software to transform industry, put your- between GE and its largest source of prof- campaign: engineers inside GE. To them,
self in the shoes of Jeff Immelt, its CEO. its. As Immelt would later say, We cannot operational software isnt anything new.
As recently as 2004, GE had reigned as afford to concede how the data gathered in Nor are control systemseven a steam
SOURCE: GE; COURTESY OF GE
the most valuable company on the planet. our industry is used by other companies. locomotive has one. But here Immelt was
But these days, its not even the largest in In 2012, GE unveiled its answer to betting they could reinvent these systems.
America. Apple, Microsoft, and Google are these threats, a campaign it calls the You do embedded systems? My God, how
all bigger. Software is king of the hill. And, industrial Internet. It included a new boring is that? Its like, put a bullet in your
as Immelt came to realize, GE is not that research lab across the bay from Silicon head, says Brian Courtney, a GE man-
great at software. Valley, where it has hired 800 people, ager based in Lisle, Illinois. Now its the
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hottest job around. At the Lisle center, yearbarely a flicker next to the billion or
part of GEs Intelligent Platforms divi- Emerged Technologies so smartphones sold in 2013.
sion, former field engineers sit in cubicles Wearables are still looking for their
monitoring squiggles of data coming off killer app. Now some people have begun
turbines in Pakistan and oil rigs in onetime The Internet to imagine that the Internet of things will
Soviet republics. Call this version 1.0 of provide it. If indeed our houses become
the industrial Internet. On the walls, staff of You filled with smart devices like door locks, a
hang pictures of fish; each represents a watch or wristband may be the most con-
problem, like a cracked turbine blade, that As wearable devices get better-looking venient way to control them or let them
was caught early. More and more, GE will and more powerful, well trust them to know our needs.
be using data to anticipate maintenance monitor and control more of our lives. Your car should know that youre
needs, says Courtney. tired because you didnt sleep that well,
A challenge for GE is that it doesnt The Internet of things typically con- so it should be alert to that, how awake
yet have access to most of the data its jures images of smart light bulbs and are you when youre driving, those things,
machines produce. Courtney says about automatic door locks. Yet with an ever says Hosain Rahman, the CEO of Jaw-
five terabytes of data a day comes into larger number of smart watches, activity bone, a 14-year-old company that makes
GE. Facebook collects 100 times as much. trackers, and head-worn computers hit- earphones, speakers, as well as wrist-worn
According to Richard Soley, head of the ting the market, were becoming part of fitness trackers. I just think that things
Industrial Internet Consortium, a trade the Internet of things, too. that are on your bodywearablesulti-
group GE created this year, industry has Slowly but surely, a few wear- mately will [control] all the smart
been hobbled by a lack of Internet think-
ing. A jet engine has hundreds of sensors.
able devicesmainly high-tech
pedometers like those from Fit- 19 stuff and be kind of at the center
point.
But measurements have been collected
only at takeoff, at landing, and once mid-
bit and Jawboneare catch-
ing on with consumers, and
million Jawbone is among the first
to try to turn a wearable into
Number of watches,
flight. GEs aviation division only recently many researchers and com- such a lifestyle remote. Jaw-
bands, and other
found ways to get all the flight data. It panies are certain that body- wearables expected bones Up24 wristband can act
sounds crazy, but people just didnt think worn computers will become to ship in 2014 as a trigger for the Web service
about it, says Soley. Its like the Internet second naturesensing, recording, IFTTT (If This, Then That) by
revolution has just not touched the indus- and transmitting data to and from our using its low-energy Bluetooth radio to
trial revolution. bodies, to networks around us. share the data it gathers about you with
GE is trying to close that gap. Its soft- For the most part, wearables still an app on your smartphone. For now, it
ware center in San Ramon created an lack wide appeal. Some, like Google does only simple things. If you have an
adaptation of Hadoop, big-data software Glass, elicit ambivalence. IDC estimates Internet-connected heater, the wristband
used by the likes of Facebook. GE also that manufacturers will ship 19 million can signal it to turn on when you get up in
invested $100 million in Pivotal, a cloud watches, bands, and other wearables next the morning. The idea is that the environ-
computing company. On the crowdsourc- ment reacts to you.
ing site Kaggle, it launched public compe- Such ideas are in their infancy. Many
titions to optimize algorithms for routing Wearable Wireless companies are still struggling to get
airline flights, which can save fuel. Wireless electronic devices are gathering anyone to put a wearable computer on.
useful data about people.
All this could sound familiar to anyone Another problem is power. With Google
who works with consumer Internet tech- Glass, for instance, youll get a few hours
nology, acknowledges Bernie Anger, gen- OMSignal OMShirt (gathers of use before it needs to be recharged.
$240 biometric data)
eral manager of GEs Intelligent Platforms And the biggest power draw is usually
division. But he says GE is thinking about Jawbone Up24 wireless wrist- the wireless chip that lets these devices
what to do next to use connectivity, and $150 band activity tracker communicate. Thats why MC10, a startup
more computers, to inject new behavior manufacturing soft, thin electronics, is
into machines. He gives the example of a OMG Life Autographer wear- experimenting with every novel form
$399 able camera
SOURCE: MIT TECHNOLOGY REVIEW
field of wind turbines that communicate of power source, says cofounder Ben
and move together in response to changes Google Glucose-sensing
Schlatka. One possibility comes from a
in wind. We are moving into big data, research stage wireless contact lens project at Columbia University called
but its not because we want to become Enhants. Researchers there are devel-
Google, he says. Its because we are dra- Proteus Biomedical Battery-powered oping small, flexible tags that harvest
matically evolving manufacturing. research stage drugs energy from light or as they are shaken
Antonio Regalado by movement. In an upcoming
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research paper, they describe outfitting are saying What is next? says David
40 people with flat sensors attached to Global Wireless Boom Blaauw, a professor of engineering at the
different parts of their bodies while they Devices that make up the Internet of things University of Michigan. Blaauw builds
walked, ran, or relaxed. Sensors were able will compete for space on networks d ominated millimeter-scale wireless computers that
by phones, games, and video.
to harvest enough energy to transmit data he believes may one day report data from
Wirelesss traffic, in terabytes per month
continuously at a rate of one kilobit per just about anywhere, even from inside a
second. Thats not much, but it could patients tumor.
12,000,000
be enough for simple applications like A SigFox base station can serve a
authenticating someones ID or reading Phones radius of tens of kilometers in the coun-
the local temperature. Enhants researcher 8,000,000 tryside and five kilometers in urban areas.
Peter K
inget, a professor of electrical engi- To connect to the network, a device will
neering at Columbia, says enough energy 4,000,000 need a $1 or $2 wireless chip thats com-
can typically be harvested to wirelessly link Tablets patible, and customers will pay about $1
Things
a sensor on your body to a smartphone in service charges per year per device.
something were already comfortable car- 2013 2014 2015 2016 2017 2018 By reaching into the Bay Area first
rying everywhere we go. Rachel Metz (with expansion to tech hubs such as
Austin, Cambridge, and Boulder in its
Luke DArcy, director of SigFoxs opera- sights), SigFox hopes to catch the inter-
Emerged Technologies tions in the U.S. est of a region where venture capital-
SigFoxs network will cover the San ists poured nearly $1 billion into startup
Francisco peninsula from its urban tip companies focusing on the Internet of
Silicon Valley to the sprawling Silicon Valley region 40 things last year, according to the research
miles to the south. It will be the compa- firm CB Insights. One of those startups,
to Get a Cellular nys first U.S. deployment of a network Whistle, makes a fitness-tracking collar
technology that already covers the whole for dogs. It has raised $6 million and is
Network, of France, most of the Netherlands, and located in a corner of San Francisco thats
parts of Russia and Spain. SigFox built been called IoT Town thanks to its pro-
Just for Things those by adding its own equipment to fusion of similar ventures.
existing cell towers and radio antennas. Ben Jacobs, Whistles CEO, says the
A French company plans to build a Customers include the French insurance collar communicates by Bluetooth to a
wireless slow lane for small, low-power company MAAF, which offers smoke and phone, or via a home Wi-Fi router. That
devices. motion detectors that notify homeown- limits what it can do. But a new version
ers with a text message on their phones using SigFoxs technology will have a con-
San Francisco is set to get a new cellular when a sensor is triggered or needs stant Internet connection anywhere
network later this year, but it wont help
fix the citys spotty mobile-phone cover-
a new battery.
The Silicon Valley network 100 in town, letting it act as a bea-
con for lost pets. Previously,
age. This wireless network is exclusively will use the unlicensed 915- bits per that would have required an
for things. megahertz spectrum band second expensive and power-hungry
The French company SigFox says commonly used by cordless Speed at which objects cellular phone on the collar.
it picked the Bay Area to demonstrate phones. Objects connected to connected to SigFoxs SigFox is in a hurry to
a wireless network intended to make it SigFoxs network can operate at network can operate get its network in place before
cheap and practical to link anything to the very low power but will be able to competitors arrive. Jacob Sharony,
Internet, from smoke detectors to dog col- transmit at only 100 bits per second a principal at the wireless consultancy
lars, bicycle locks, and water pipes. slower by a factor of 1,000 than the net- Mobius Consulting, says large wireless
Regular mobile networks are jammed works that serve smartphones. But that companies are preparing machine-only
with traffic from phone calls and people could be enough for many applications. networks as well, and these may operate
SOURCE: CISCO VISUAL NET WORKING INDEX
downloading videos. But for the Inter- Indeed, semiconductor companies at much higher speeds. A new long-range,
net of things to become a reality, similar like Intel and Broadcom are also in a low-power Wi-Fi standard that has the
capabilities will need to be extended to race to make far cheaper, far smaller, and backing of some major U.S. companies,
billions of objects, many of them embed- much-lower-power wireless chips. Sev- including Qualcomm, could hit the mar-
ded in the environment and powered by eral showed off these miniature comput- ket in 2016. It will likely be a major con-
small batteries. If you want to get to bil- ers at the Consumer Electronics Show tender even though it is somewhat late to
lions of connections like that, you require this year. They saw the cell phone turn the game, says Sharony.
a completely new type of network, says into the smartphone, and so companies Tom Simonite
8
Theres a way
to do it better.
Find it. Thomas Edison
Each year, over 35,000 companies
choose a better approach to
measurement and control.
2014 National Instruments. All rights reserved. National Instruments, NI, and ni.com are trademarks of National Instruments. Other product and company names listed are trademarks or trade names of their respective companies. 17198
As engineers, you have the power to solve todays biggest challenges. This includes
developing cyber-physical systems that will better connect our world through
advanced technology.
This emerging technology infrastructure is known as the Internet of Things, and its use of
massive data sets is poised to improve daily life through predictive and real-time analysis.
But bringing it to life is going to take integrated software and hardware platforms that
GE launched its push into the Internet of James Chevalier Founder, CityStrides @TheIoT
things with this white paper, which dis-
cusses potential economic savings if the Tom Coatess house Tweeting home, San Francisco @houseofcoates
industrial Internet leads to an efficiency Beth Comstock Chief marketing officer, GE @bethcomstock
gain of just 1 percent across industries.
Alexandra Deschamps-Sonsino Interaction designer, Designwarm @iotwatch
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thing to be sensed, effected and communi- Hes taken on the job of organizing GEs ity. To capture this market, in 2013 Broad-
cated with. software operations, which, though scat- com introduced a turnkey system, called
tered, do $4 billion in sales and employ WICED (consisting of a small processor
about 10,000 people (as many as work and Wi-Fi chip), that device manufactur-
Beth Comstock at Adobe). That takes a technical vision. ers can embed into objects to make them
Ruhs has been to create a new software into wireless nodes.
Chief marketing officer, General Electric
and R&D center in San Ramon to central-
Fairfield, Connecticut
ize GEs efforts. Since he joined in 2011,
Beth Comstock likes to call GE the GE has created Predix, a standard system Cisco Systems
worlds oldest startup. Her job is to for doing analytics on industrial data that Founded: 1984
make sure the 132-year-old company acts GE says has generated more than $800 San Jose, California
like a startup. As head of marketing, she million in new sales. Vital statistics: $48.6 billion in annual
oversees high-budget, high-concept cam- sales and 75,000 employees
paigns like the industrial Internet, GEs
effort to invest in data analytics. She over- Companies to Watch Cisco is one of the loudest cheerleaders for
sees GE Ventures, the companys in-house the Internet of things. No wonder. Every
venture capital shop, as well as efforts to Apigee time someone connects a new device to
stir up innovation through open competi- the Internet, Cisco stands to make more
Founded: 2004
tions partnering with startups. money selling switches, routers, and
San Jose, CA
Wi-Fi equipment. The more devices
Vital statistic: $173 million in funding from
there are, the better for us, said a Cisco
Norwest Venture Partners, Bay Partners,
Tony Fadell SAP Ventures, and Third Point
executive. By Ciscos estimate, only 4 per-
cent of devices on factory floors are con-
Founder and CEO, Nest
Apigee helps develop mobile apps and nected to the Internet. In the next seven
Palo Alto, California
application programming interfaces, or years, Cisco estimates, 27 billion devices
Tony Fadell created the first recognizable APIs, for big companies that want to open will be connected to a network, mostly
consumer brand of the Internet of things, up their data streams for the world to plug machines like solar panels, engines, and
the Nest Learning Thermostat. Formerly a into, just as Facebook or Twitter do. Help- trucks.
designer and executive at Apple, Fadell cre- ing big companies master the art and sci-
ated the first 18 versions of the iPod under ence of the app economy will matter as
Steve Jobs. In 2008 he left Apple and cre- these companies try to turn light bulbs and Electric Imp
ated a true garage startup to replace the automobiles into information technology Founded: 2011
$29 beige box thermostat with a $249 platforms and business ecosystems. Apigee Los Altos, California
version capable of collecting detailed infor- is to carry out an IPO in 2014. Vital statistic: Raised $8 million from
mation about what goes on inside a house. Redpoint Ventures and Lowercase
Consumers cheered; sales topped 50,000 Capital, among others
units a month by early 2013. When Google Broadcom
bought his company in 2014 for $3.2 bil- How do objects get connected to the
Founded: 1991
lion, it was partly to get hold of Fadell and Internet? One new option is the Imp, a
Irvine, California
his skills in consumer gadget design, nota- system developed by former iPhone engi-
Vital statistic: $8.3 billion in revenue
bly lacking at Google. Fadell, a computer neer Hugo Fiennes that makes it relatively
engineer, holds over 300 patents. You may not have heard of Broadcom, but easy to Internet-enable any product. The
crack open any Internet of things device, Imp is a small computer with a proces-
like the MyQ garage door opener or a Hon- sor and wireless Wi-Fi chip; then theres
William Ruh eywell smart thermostat, and youre likely software to program the Imp and run it
to find a Broadcom wireless chip inside. from the Internet. The Imp is becom-
Vice president and global technology
The chip maker says 99 percent of Internet ing a favored test bed for gadgeteers and
director, General Electric
traffic passes through its products, which entrepreneurs launching novelty products
San Ramon, California
are also found in set-top boxes, smart- on sites like Kickstarter. It is also find-
When GE needed to fix its sprawling soft- phones, and routers. Unlike Intel but like ing its way into commercial products like
ware operations, it needed a big name. It chip makers such as Texas Instruments, the Lockitron smart lock and the Rachio
picked Bill Ruh, a well-established soft- Broadcom is targeting the low end of the smart sprinkler, which permits people to
ware executive from Cisco. Around GE, market, which is expected to grow quickly control lawn watering from their smart-
Ruhs name is uttered with reverence. as more products require cheap connectiv- phones. The Imp retails for $30.
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