The internet of everything – HHBR, 2014

- 1st wave of IT during 1960-70 automated the individual activities in the value chain, from order
processing to computer-aided design and manufacturing resource planning

o Productivity of activities increased due to the amount of new data could be captured
and analyzed. This led to standardization of the processes

- 2nd wave in 1980 -90 - enabled coordination and integration across individual activities: with
outside suppliers, channels and customers, cross geographies – ex. integrate globally distributed
supply chains. The products were not affected

- 3rd wave – 2010 – the IT became an integral part of the product itself. Embedded sensors,
processors, software and connectivity in products (computer are put inside the products)
coupled with product cloud in which data is stored and analyzed and some applications are run,
are driving dramatic improvements in product functionality and performance

o Leap in productivity with new and better products

o Reshape the value chain by changing product design, marketing, manufacturing, and
after sales service and create the need for new activities such as product data analytics
and security

o The rules of competition and competitive advantages remain the same

What are smart, connected products?

They have 3 core elements: physical components, “smart” components and connectivity components:

- Physical = mechanical and electrical parts

- Smart = sensors, microprocessors, data storage, controls, software, embedded operating system
and enhanced user interface (ex. touch screen, rain-sensing, etc.)

- Connectivity = ports, antennae, protocols enabling wired and wireless connections. Connectivity
serves dual purpose. First, it allows information to be exchanged between the product and its
operating environment, its maker, its user, and other products or systems. Second, connectivity
enables some functions of the product to exist outside the physical device in what is known as
the product cloud. This requires companies to build an entire new technology infrastructure.

This technology enable not only rapid product application development and operation but the collection,
analysis, and sharing of the huge amounts of longitudinal data generated inside and outside the
products that has never been available before

What can smart, connected products do?

- New products with functions and capabilities which can be grouped in 4 areas: monitoring,
control, optimization and autonomy.

- Monitoring – sensors and external data sources enable monitoring of product’s condition,
external environment, product’s operation and usage, alerts and notifications
- Control – software embedded in the product or in the product cloud – control of product
functions, personalization of the user experience

- Optimization – algorithms that optimize product operation and use in order to enhance product
performance and allows predictive, diagnostics, service and repair

- Autonomy – a combination of the above, allows autonomous product operation, self-

coordination of operation with other products and systems, self-diagnosis, personalization.
Human operators merely monitor performance and watch over the fleet or the system, rather
than individual units