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The $11 Trillion Question: How Will You Capture Value on the Internet of Things?

“The size of the potential prize is enormous, $4 to 11 trillion” by 2025, said Michael Chui, partner at the McKinsey Global Institute, coauthor of its recent study, “The Internet of Things: Mapping the Value Beyond the Hype,” and moderator of a panel on the business impact of IoT at the Center for Digital Transformation’s annual conference at The Paul Merage School of Business at UC Irvine on March 24.

Locate your opportunities

While technology providers will capture some of this value, said Chui, customers will realize most of it, with twice as much potential in B2B applications. That’s good news for companies like General Electric. However, of all the data captured through IoT, Chui said that managers are using less than one percent of it in their decision making. So there’s an opportunity, if not a competitive advantage, in figuring out how to process and act on large data sets in real time beyond detecting anomalies in the environment. Finally, Chui highlighted the people challenges, how to design experiments, and how to convince leaders of the value in IoT.

Put more intelligence at the edges

Raj Talluri, SVP of Product Management of Qualcomm Technologies, brought an engineering point of view to the panel. He suggested putting more intelligence at the edges, using smarter sensors to collect only the data you need. He gave home security as an example. His company is putting its Snapdragon processors into cameras, enabling each device to recognize faces, detect motion, and track and classify objects. Homeowners could program cameras to recognize family, friends, and delivery patterns and would get alerts only when strangers or hazardous objects came onto their property. Both the edges and the center become smarter and more efficient, reducing storage costs and expediting action. Talluri said more of his customers were asking for Snapdragons because they supported such complex applications in relatively simple objects, such as wearables like the FitBit.

Do Hollywood

Panelist David Rose, CEO of Ditto Labs and author of Enchanted Objects: Design, Human Desire, and the Internet of Things, spoke from a designer’s point of view. He suggested that, before you sit down and determine pixel density, you should understand the user experience. That’s what he does as a scientist and lecturer at the MIT Media Lab. He brings a magician to class to introduce stagecraft, the emotional arc of an experience, and how to integrate the tropes of magic into everyday objects and events. He recommended using simple “day in the life of” videos to show theatrically how you want a new product or service to feel, how it will change someone’s life. For example, in his work with Fischer Price on the future of toys, his team came up with 20 ideas that he was able to embed in a three-minute video so that FP’s leaders and engineering team could see the vision.

The bottom line: imagine how to imbue ordinary objects with extraordinary capabilities for customers through software before plugging them into the Internet of Things.

About the Session

We live in a world where more and more data becomes available through sensors, smart phones, and other devices. Michael Chui of the McKinsey Global Institute moderates an expert panel featuring David Rose, CEO of Ditto Labs, and Raj Talluri, SVP of Product Management of Qualcomm Technologies examining how we can leverage IoT data to build new business models for the physical world.

Presented as a part of the Center for Digital Transformation’s annual one-day Road to Reinvention: Leadership in the Digital Age conference on March 24, 2016 at the University of California, Irvine. + MORE

 

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