insights

We're in the middle of what's been heralded as the fourth Industrial Revolution. The first three revolved around advances in manufacturing, this ones one goes far beyond manufacturing. Smart, connected technologies are transforming how parts and products are designed, made, used, and maintained. And by ushering in a digital reality, they are transforming organizations themselves.

Information technology is revolutionizing products. Once composed solely of mechanical and electrical parts, products have become complex systems that combine hardware, sensors, data storage, microprocessors, software, and connectivity in myriad ways. These "smart, connected products"—made possible by vast improvements in processing power and device miniaturization and by the network benefits of ubiquitous wireless connectivity—have unleashed a new era of competition.

The phrase "internet of things" has arisen to reflect the growing number of smart, connected products and highlight the new opportunities they can represent. Yet this phrase is not very helpful in understanding the phenomenon or its implications. The internet, whether involving people or things, is simply a mechanism for transmitting information. What makes smart, connected products fundamentally different is not the internet, but the changing nature of the "things." It is the expanded capabilities of smart, connected products and the data they generate that are ushering in a new era of competition. Companies must look beyond the technologies themselves to the competitive transformation taking place.

What Are Smart, Connected Products?

Smart, connected products have three core elements: physical components, "smart" components, and connectivity components. Smart components amplify the capabilities and value of the physical components, while connectivity amplifies the capabilities and value of the smart components and enables some of them to exist outside the physical product itself. The result is a virtuous cycle of value improvement.

Physical components comprise the product's mechanical and electrical parts. In a car, for example, these include the engine block, tires, and batteries.

Smart components comprise the sensors, microprocessors, data storage, controls, software, and, typically, an embedded operating system and enhanced user interface. In a car, for example, smart components include the engine control unit, antilock braking system, rain-sensing windshields with automated wipers, and touch screen displays. In many products, software replaces some hardware components or enables a single physical device to perform at a variety of levels.

Connectivity components comprise the ports, antennae, and protocols enabling wired or wireless connections with the product. Connectivity takes three forms, which can be present together:

• One-to-one: An individual product connects to the user, the manufacturer, or another product through a port or other interface—for example, when a car is hooked up to a diagnostic machine.

• One-to-many: A central system is continuously or intermittently connected to many products simultaneously. For example, many Tesla automobiles are connected to a single manufacturer system that monitors performance and accomplishes remote service and upgrades.

• Many-to-many: Multiple products connect to many other types of products and often also to external data sources. An array of types of farm equipment are connected to one another, and to geolocation data, to coordinate and optimize the farm system. For example, automated tillers inject nitrogen fertilizer at precise depths and intervals, and seeders follow, placing corn seeds directly in the fertilized soil.

Connectivity serves a dual purpose. First, it allows information to be exchanged between the product and its operating environment, its maker, its users, and other products and systems. Second, connectivity enables some functions of the product to exist outside the physical device, in what is known as the product cloud. For example, in Bose's new Wi-Fi system, a smartphone application running in the product cloud streams music to the system from the internet. To achieve high levels of functionality, all three types of connectivity are necessary.

Why now? An array of innovations across the technology landscape have converged to make smart, connected products technically and economically feasible. These include breakthroughs in the performance, miniaturization, and energy efficiency of sensors and batteries; highly compact, low-cost computer processing power and data storage, which make it feasible to put computers inside products; cheap connectivity ports and ubiquitous, low-cost wireless connectivity; tools that enable rapid software development; big data analytics; and a new IPv6 internet registration system opening up 340 trillion trillion trillion potential new internet addresses for individual devices, with protocols that support greater security, simplify handoffs as devices move across networks, and allow devices to request addresses autonomously without the need for IT support.

If you would like to learn more about Industry 4.0 and how it can help your business, give Total Technology Partners a call. We're more than happy to talk.