Many experts believe that the development and incorporation of internet-connected sensors – constituting the Internet of Things (IoT) – will optimize the production, consumption and maintenance of all types of existing products and services. But the IoT, in conjunction with so-called artificial or augmented intelligence (AI), creates an emergent and convergent industry of “data-facturing”, forced by data analytics intermediaries, which will lead to a complete overhaul of global production and its economics.
The industrial Internet of Things (IoT) consists of four converging technologies: small sensors that can be attached to products, bodies, or machines; ubiquitous internet connections to send data from these sensors into massive data warehouses in the cloud; the hardware machines that make products, and analytics software to extract insight from Big Data. This software not only provides empirical evidence of trends, but it can learn to manipulate its data to find trends that even its software programmers did not envision. It can also enable machines to learn and automatically adjust to new trend insights.
In a recent HBR article (“How Smart, Connected Products Are Transforming Competition, Harvard Business Review, November 2014), Michael Porter and James Heppelmann argued that, because products will be linked in real time to the manufacturer’s operations, to other products, and to third party service providers, the IoT may change the power of rivals, substitutes, new entrants, suppliers and buyers in existing industries.Read more