September 12, 2011
by Adam Richardson
What do Netflix, Zipcar, Mint.com, Nike+, Amazon, the Nintendo Wii, and the Apple iPhone all have in common? They all take advantage of four technologies that once were scarce and expensive but are now plentiful and cheap. These technologies can be combined in numerous ways, and we are just starting to see companies really taking advantage of the possibilities. These four technologies will have a disruptive impact on your business, almost regardless of which industry you're in. The question is whether you will choose to adopt them before a competitor does.
What are they?
3. Wireless connectivity
Before we look at them in more detail, let's look at Zipcar as an example of what can be done when you plug them all together.
Zipcar is a car sharing service that allows people to rent vehicles for short trips around town. Members reserve a car via the website or their mobile phone. When they get to the car, they wave their membership card over a sensor on the windshield (the card and sensor communicate wirelessly), which triggers a wireless query back to the company's database to make sure the user is OK to take the car. If everything checks out, the car's doors are unlocked electronically and the member drives off.
As the member travels around, the car's location is tracked via GPS. If an accident or breakdown were to occur, Zipcar knows where the stranded driver is. When the car is dropped off, the member's account in the database is updated, and the car's mileage is updated (triggering service if necessary).
Zipcar is a great example of how you can create a new type of business, enhance a user experience, and find cost and operational efficiencies by cleverly employing these technologies. Let's look at each of them in more detail.
We'll start with the most familiar one: computer chips. Moore's Law continues with full force, with the result that for many applications the necessary processing power is now radically cheap, on the order of pennies. Microprocessors can get built into just about anything with almost negligible cost. And it's not just about "computing" capability. Cheap microprocessors are improving the experiences of everything from appliances to car dashboards.
When combined with cheap, plentiful bandwidth, you don't even need to embed the processor into the device. You can "outsource" the computing to servers in the cloud. Those computers can be far more powerful than what you can stuff into a small cheap portable device. Google is pushing this approach to the maximum with its Chromebooks, laptops that have just screens and wireless broadband, relying entirely on cloud processing for functionality. While not fully practical today, they point to a possible future scenario of all computing happening "off device."
There has been a revolution in recent years with the quantity, variety, accuracy, and cost of sensors, and in how easy they are to integrate into devices. These measure a wide variety of attributes, such as:
Motion and orientation: These range from accelerometers (such as those found in the Wii remote or the iPhone) to sensors for detecting if you are holding your digital camera on its side so that photos get imported into your PC the right way up. The cutting edge is represented by Microsoft Kinect, a gaming system that uses powerful sensors and processing to observe and interpret user's body movements without requiring a physical device like the Wii remote. Nike+ and the fitness activity tracker device Fitbit both use sensors to measure body movement and then load that information into a cloud database for comparison with other users' workouts.
Location: Typically achieved with GPS for mapping purposes, this can also be achieved less accurately by triangulation from cellular towers if a device has cellular capability.
Image: Digital sensors for taking pictures and video are being built into more and more devices; they will be as ubiquitous as clocks. Webcams, fingerprint and retina scanners are just a few of other current uses.
Smartphones have become the testing ground for clever use of sensors. Innumerable apps on iPhones and Android phones take advantage of the motion, location, and image sensors built into those devices, often combining the outputs from the various sensors in highly imaginative ways for fun (Angry Birds) and utility (tape measure). Combine these with wireless bandwidth and databases and you have applications such as augmented reality.
We are all familiar with cell phones and WiFi, but there is an alphabet soup of wireless connectivity technologies here now or emerging that allow communication over long-, medium-, and short-range distances.
Long-range wireless: 3G wireless is now fairly standard around the world (with emerging markets being ahead of the U.S. due to lack of legacy). 3G has become so inexpensive that Amazon bundles it into the Kindle, with payment combined into the book price (so no wireless plan required), and then uses its massive database to make further book recommendations. But 4G/LTE (Long Term Evolution) technology now being rolled out promises bandwidth and speeds similar to what we get from home broadband today.
Mid-range wireless: This is the most mature and least dynamic area, based on the ubiquitous WiFi — high bandwidth but more limited range than cellular. But it's the very stability of this standard that allows it to be a great platform for building new applications. More basic radio-frequency transmission methods also have their place for niche applications; for example, Belkin makes a series of power strips and other accessories that allow a user to hit one master button and turn off all attached devices (or turn them all on) in one go, using wireless to send the on/off signal. This cuts down electricity by avoiding vampire energy.
Near-range wireless: The familiar Bluetooth is joined by up-and-comers that combine very low power consumption with very short range for specialized functions: Zigbee, RFID (Radio Frequency Identification), and NFC (Near Field Communication). NFC is starting to get adopted in mobile phone payment systems (my colleague Jan Chipchase has looked at mobile money in Afghanistan). Wal-mart is rolling out RFID for inventory tracking (in combination with databases), while tool-maker Snap-On is using it to help airplane factories keep track of expensive equipment. And Poken has developed a platform that makes it easy to gather intelligence from surrounding people and objects, using RFID.
Cheap wireless connectivity is fueling a surge in machine-to-machine communications, where devices talk to one another without human intervention — electric utility smartmeters are one example. Cisco predicts that by 2020 there will be 50 billion internet-connected devices (the number of connected devices already far surpasses the global human population).
Wireless connectivity is not just for phones (or voice). It is becoming a technology plugged into almost every conceivable object.
The least visible of the four technologies, databases are what bring meaning to all the individual actions occurring with each of the other three. There has been a revolution in how databases can be queried (or "mined"), and how nuggets of insights are extracted from mountains of data about transactions, behavioral trends, orders, inventory, and so on. Being clever about how database information is used is enabling many of today's cutting edge businesses. Facebook is essentially a giant user-created database. Salesforce.com is a database that lives in the cloud and presumes availability of ubiquitous wireless connectivity so that roving sales staff can always access customer data. Netflix makes use of databases to manage inventory and user accounts. Netflix sees databases as so critical to its business that it held a competition to crowdsource finding better ways of making more accurate movie recommendations. Amazon's web services make it easy for anyone with some technical knowledge to have a highly scalable cloud-based database on a pay-as-you-go model.
Another change in recent years has been that databases have been made much more accessible and easier to use for everyday people to interpret. Mint.com (now owned by Intuit) uses database mining to synthesize spending trends for regions and "people like me," which allows people to compare their spending habits with others'. At frog we do a lot of work on making healthcare data more understandable to so that people can better manage their own health, and often this also involves smartphones with their built-in sensors and connectivity so that the data input and visualizations are available on the go.
That's a very quick runthrough of these four technologies. I hope the examples mentioned here point to some of the possibilities that can open up when the ingredients are combined in various ways. If you're not already looking at how these technologies are reshaping your business or industry, now would be a good time to start.