Nest shows the importance of planned business models for IoT devices

There’s good news for Nest Cam IQ indoor owners today: The smart cameras now have Google Assistant capabilities built in. The feature is optional — you can enable or disable it — and there’s no additional charge for the functionality. If you choose to enable it, you now have another microphone and speaker for home control, informational queries, setting reminders, and more. I wouldn’t suggest playing music through the small speaker found in the Nest camera though.

Nest also expanded its Nest Aware subscription offering with a new five-day plan costing a dollar per day. That’s perfect for non-subscribers or folks who don’t want to pay for a monthly plan if they’re only going on vacation for a few days. Person Alerts are also new for the suite of webcams, helping to identify a person compared to some other moving object in your Activity Zones. Again, no charge for this new feature.

This news reminds me of a recurring theme that we discuss on the IoT Podcast: When it comes to IoT are you buying hardware, services or both? More often than not, the answer is the latter.

But if you bought a Nest Cam IQ, did you expect new services like Google Assistant or not? If you were promised a future service but never got it for your next IoT device, would you be upset? (You probably would and so would I.) Lastly, if you bought an IoT product and the service offerings were scaled back or changed from free to paid services, how would you feel?

All three of these examples highlight the importance of IoT companies clearly defining and communicating their business models, both internally and externally. If they don’t, they run the risk of quickly upsetting loyal customers or failing to account for their true operational costs.

Making sure the Canary is secure costs quite a bit.

Take the recent case of Canary, for example. Last October, the company removed some of its free service features from customers who bought the hardware with an understanding that they’d have such features, even without a paid service plan.

Night Mode, which captures video from motion detection at night when you’re home and presumably sleeping, went from free to paid. Video recordings were limited to just 10 seconds under the scaled down free plan. And downloading or sharing video clips was eliminated unless you decided to now pay the monthly service fee.

That’s a very different approach from the recent Nest news. Some of it very likely has to do with resources. Since Canary isn’t in the business of running cloud servers for its services, it has to pay for Google Cloud, Amazon Web Services or Microsoft Azure in order to provide these capabilities. Being part of Google, Nest has “in-house” cloud services to use.

But that’s irrelevant to the people buying IoT devices: To them (and me, since I’m a Canary owner), they don’t want to feel like they’re in for a “bait and switch” when purchasing a connected home hub, sensor, webcam, door lock, or what have you. That’s why if you plan to sell any type of connected device with some type of service, you have to plan ahead early in your design process. And if you commit to a level of free services, but later have to change them, existing customers should be grandfathered in, if possible.

I’d argue that Nest has done a better job at this than most. And the Canary example is more of an outlier than the norm, thankfully.

However, I’d bet a month’s worth of my Nest Aware subscription that Nest planned for Google Assistant capabilities when designing the Nest Cam IQ before it launched last May. This way it would make sure that the hardware could handle Assistant queries and be loud enough for responses, while at the same time lining up the necessary software to hook into Google’s cloud for digital assistance.

Besides the hardware and software though, Nest surely did the math on costs for Google’s cloud. Maybe those are free or maybe they’re an internal transfer for the accountants. I suspect it’s the latter, along with analysis of how much of the cloud costs could be recouped through growing hardware sales based on new or additional features.

The point is: If you’re in the IoT device business, service planning may be the most important aspect of your product’s life-cycle. Make sure to do your homework well before the product hits the shelves and begin with the customer in mind.

Stacey on IoT | Internet of Things news and analysis

Business fears: The need for better security in the Internet of Things

Cybersecurity in business is often overlooked, underfunded or simply not given enough thought. Though recent research by Avast Business found that 96% of SMBs are concerned about malware and ransomware, the ‘it won’t happen to us’ attitude is still just as prevalent as the underlying fear of being hacked.

Why aren’t businesses doing more to protect themselves against the very attacks that they’re afraid of, and what could IoT developers be doing to help minimise risks?, says Greg Mosher, VP of Engineering at Avast Software.

90% of those responding to the survey stated that they had concerns about password hacks, and with 90% of online passwords currently thought to be vulnerable to hacking they are right to be concerned. Internet of Things devices are often left to rely on default passwords, or not password protected at all. This is a major security risk when you consider that IoT technology, like CCTV cameras and heating systems, share their connection with business computers storing huge amounts of sensitive data.

Businesses concerned about hacks should ensure that staff are fully aware of the risks of using easily-cracked passwords, instigating regular password updates using cryptic formulas across all devices.

Are you concerned about password hacks?

US retailer Target became the victim of a substantial attack in 2013 when hackers gained access to customer credit card data via internet connected heating and air-conditioning systems. The potential for security breaches like this may be what led another piece of recent research to list IoT devices as one of the top 10 points of entry that hackers can use to access data.

Corporate data theft

Unauthorised access to corporate data and computer systems cost serious money. 89% of Avast Business’ respondents were concerned about corporate data theft, in no small part due to the estimated £9.2 billion (€10.40 billion) lost to cyber-theft of intellectual property and £7.6 billion (€8.59 billion) lost to cyber-espionage each year in the UK alone. 87% of those surveyed also cited concerns about Wi-Fi security breaches.

Are you concerned about corporate data security and data theft?
89% are

In 2015, 74% of small UK businesses and 90% of large UK businesses reported having a security breach of some kind. While there are a range of factors needed to prevent breaches like these and protect data from theft, properly securing Internet of Things devices and patching vulnerabilities should not be overlooked. For those working in IoT development, energy needs to be focused on in-built security measures and the room for additional security protection to be added by users.

At the 2016 RSA Conference, the message was loud and clear: IoT will crash and burn if security doesn’t come first. Though these kinds of devices are generally used on secure private networks, if product development doesn’t spend enough time considering security pitfalls, the devices created won’t be as indispensable as we might like to believe. Weaknesses will be exploited, and when that happens hackers won’t just have access to a single device – they will have control of every device in the network.

For any business […]

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If You Can Simplify The Weather, You Can Simplify A Global Business

Countless businesses across industries are profoundly affected by the weather. If rain comes a week early or late, an industrial farm’s entire crop – and revenue stream – can be destroyed. If a snowstorm hits during a busy retail season, a shipper’s profit margins can be slashed. If winter temperatures are higher than usual, a maker of car batteries can see a steep drop in demand. Weather is anything but simple.

The same is true of business – especially when you’re juggling high data volumes and personalized product offerings. As with the weather, the sheer complexity of business can lead to high risk, missed revenue targets, and competitive disadvantage.

Meteo Protect is an innovative insurer that has created a new market in weather risk management. The Paris-based company covers risk related to rainfall, snowstorms, temperature, and virtually any other weather-related condition or event.

It must also deal with a massive amount of complexity. “In the insurance industry, very often times, when you grow, you have processes that become more and more complex,” says Gabriel Gross, the company’s co-founder and CEO. “You have regulatory issues, you have technical issues. In the case of Meteo Protect, we have scientific situations that need to be solved.”

Meteo Protect is meeting and beating those challenges with a fast, stable, and scalable IT infrastructure based on in-memory computing and live data.

Driven by data, speed, and customer need

Six years ago, Meteo Protect was a startup insurer with a clever idea: deliver an insurance product that protects virtually any business in the face of virtually any combination of weather events. Today it’s taking the industry by storm – for example, recently gaining “coverholder” status to access, underwrite, and issue policies in the Lloyd’s of London insurance and reinsurance marketplace.

The company achieved that success based on its ability to quickly and accurately analyze vast streams of data – and use the resulting insights to customize its products to meet individual customer needs.

“So that’s massive amounts of [weather] data, which is growing every day,” Gross explains. “We are performing heavy scientific analysis in real time, potentially everywhere on the planet. … And we are using that to understand better what the risks are for clients and what the risks are for the reinsurers that we work with. And to give a price to each and every policy that we create.”

To capture and analyze such massive amounts of data in real time, the company turned to an in-memory computing platform. “Climate-change analysis on a global scale, customized to the pinpoint of each farmer and each small client, is something that would not be possible without a system that has the performance, the scalability, and the security of the platform,” Gross insists.

Today, analysis that took actuaries one week can now be completed in a fraction of a second. This ability to “run live” has enabled Meteo Protect to extend services to tens of thousands of customers in eight countries around the world in less than 18 months.

Simple for the company, simple for the customer

The benefits of live business also reach the customer. Customers access Meteo Protect’s underwriting platform through their mobile phones. They specify the risk they want to insure and receive a price quote in a matter of seconds. They can fine-tune parameters, time frames, and other details to design a completely customized policy. And they can complete their purchase electronically, obtaining the coverage they need in just minutes.

Their new coverage can transform their business. As one example, Spanish olive growers simply didn’t have weather insurance in the past. “If there was a massive drought, they would just stop doing business,” Gross says.

Today, those growers are protected. Following a temperature spike in spring 2017, Meteo Protect customers received compensation – and were able to remain competitive. “It’s a major game changer for them,” Gross points out. “And it was just not possible without this platform.”

Gross jokes that while “running live” has simplified his business, it hasn’t simplified his life. “Running live … has enabled me to go and see more and more clients and grow the business much faster,” he says. “So in this respect it has not made my life simpler.

“[But] it has made my strategy simpler … because I don’t have to worry about whether we are going to be able to produce what we’re selling,” he continues. “As CEO, my main responsibility is to grow my business without growing my risks. Now, I know that I can do that.”

Learn more about how Meteo Protect’s Gabriel Gross and other leaders are using SAP solutions to help their businesses run live. Watch our exclusive “Leaders Are Live” videos.


Internet of Things – Digitalist Magazine

How Big Data and AI are Driving Business Innovation in 2018

After years of hope and promise, 2018 may be the year when artificial intelligence (AI) gains meaningful traction within Fortune 1000 corporations. This is a key finding of NewVantage Partners’ annual executive survey, first published in 2012. The 2018 survey, published on January 8, represented nearly 60 Fortune 1000 or industry-leading companies, with 93.1% of survey respondents identifying themselves as C-level executive decision-makers. Among the 2018 survey participants were corporate bellwether companies, including American Express, Capital One, Ford Motors, Goldman Sachs, MetLife, Morgan Stanley, and Verizon.

The main finding of the 2018 survey is that an overwhelming 97.2% of executives report that their companies are investing in building or launching big data and AI initiatives. Among surveyed executives, a growing consensus is emerging that AI and big data initiatives are becoming closely intertwined, with 76.5% of executives indicating that the proliferation and greater availability of data is empowering AI and cognitive initiatives within their organizations.

The survey results make clear that executives now see a direct correlation between big data capabilities and AI initiatives. For the first time, large corporations report that they have direct access to meaningful volumes and sources of data that can feed AI algorithms to detect patterns and understand behaviors. No longer dependent on subsets of data to conduct analyses, these companies combine big data, AI algorithms, and computing power to produce a range of business benefits from real-time consumer credit approval to new product offers. Companies such as American Express and Morgan Stanley have publicly shared stories of their successes within the past year.

Staving Off Disruption

Survey participants comprised executives representing data-intensive industries, notably financial services companies, which constituted 77.2% of the survey respondents. Financial services companies have long been at the forefront of industry due to the large volumes of transactional and customer data that they maintain, and they have developed robust data management and data governance processes over a period of decades. These organizations have been at the forefront in the use of analytics to manage risk, assess customer profitability, and identify target market segments. Industries such as life sciences, while newer to data management, possess vast repositories of scientific and patient data that have gone largely untapped relative to the potential for insight.

Now, many of these mainstream companies are facing threats from data-driven competitors that have no legacy processes and have built highly agile data cultures. Companies like Amazon, Google, Facebook, and Apple are among the most prominent disruptive threats to these traditional industry leaders. As mainstream companies increase their investment in big data and AI initiatives, they face a range of issues and challenges as they seek to organize to compete against data-driven competitors. This concern is highlighted in the 2018 survey results.

A clear majority (79.4%) of executives report that they fear the threat of disruption and potential displacement from these advancing competitors. In response to the threat of disruption, companies are increasing their investment in big data and AI initiatives. In the 2018 survey, 71.8% of executives indicate that investments in AI will have the greatest impact on their ability to stave off disruption (in the next decade). Although overall investments in AI and big data initiatives continue to be relatively modest for most large corporations, 12.7% of executives report that they have invested half a billion dollars in these initiatives to date. If the fear of disruption is any indication, this number can be expected to increase.

Driving Innovation Through AI

Executives indicate that investments in big data and AI are beginning to yield meaningful results. Nearly three-fourths of executives surveyed (73.2%) report that their organizations are now achieving measurable results from their big data and AI investments. In particular, executives report notable successes in initiatives to improve decision-making through advanced analytics — with a 69% success rate — and through expense reduction, with a 60.9% success rate. Businesses are also using big data and AI investments to accelerate time-to-market for new products and services (54.1% success rate) and to improve customer service (53.4% success rate). Yet, just over one-fourth (27.3%) of executives report success thus far in monetizing their big data and AI investments. This remains an elusive goal for most organizations.

Nearly one-fourth (23.9%) of respondents report that their investments in big data and AI are highly transformational and innovative for their organization, and potentially disruptive for their industry. But 43.8% of executives report that innovation and disruption initiatives involving big data and AI yield successful results for their organizations.

As mainstream companies look to the future, there is a growing consensus that AI holds the key. With 93% of executives identifying artificial intelligence as the disruptive technology their company is investing in for the future, there appears to be common agreement that companies must leverage cognitive technologies to compete in an increasingly disruptive period. Investment in AI can be expected to increase as organizations position themselves to compete in the future. Those companies that prove themselves to be adept at developing and executing initiatives using big data and AI capabilities will likely be the companies that are best positioned to deflect the threats of agile, data-driven competitors in the decade ahead.


MIT Sloan Management Review

Telefonica sees blockchain business opportunities in IoT security, supply chain and fraud control

As Telefonica says, Blockchain is the keystone of cryptocurrencies. And cryptocurrencies are inherently linked to the Internet of Things (IoT).

So Spain’s incumbent fixed and mobile network operator has added some useful material to the debate surrounding blockchain by publishing this infographic on its blog pages.

 

 

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