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Unlocking the Internet of Things

March 2, 2014 • Big Data & Analytics, Strategic Spotlight, TECHNOLOGY

By John Bates

Big data is amassing like snow in a blizzard, forming an avalanche that threatens to bury anyone who ignores it. Below, John Bates, CTO for Intelligent Business Operations and Big Data, Software AG, discusses how systems with scalability, agility and speed can help to bridge the intersection of the digital ID and the Internet of Things.

Storms of new data are growing bigger by the day, flowing in from social media, new internal corporate processes, retail and market transactions, electronic sensors and other machines. Especially machines.

The masses of new data follow technology innovation and by 2020 industry analysts predict there will be up to 30 billion devices connected to the Internet with unique IP addresses. This compares with 2009, when were a ‘mere’ 2.5 billion connected devices.

This digital revolution, the Internet of Things, is a virtual world where Things can be anything from a person with a heart monitor to a digital tire pressure sensor in your car, or smart electricity grids communicating with each other. All of these Things create data, and the data is big.

But what are we meant to do with the Things of the Internet? The amounts of data being created are so large that they are measured in quintillions of bytes – 2.5 quintillion bytes of new data are created every day.

Every byte created adds to the innumerable bytes that are already there — and they can tell us a story. The story might be about the personal spending habits of an iPhone user, or it could be about the engine capabilities of an 18-wheel truck. The trick is to winkle out the story, thus identifying a trend or a pattern or an anomaly that you can use.

If you can get the story right, there is a pot of gold at the end with estimates that the total economic value-add from the Internet of Things will be $1.9 trillion dollars in 2020.


Finding your Things

There is a certain Seussian ring to the Internet of Things. It brings to mind Dr. Seuss’ Cat in the Hat where Thing 1 and Thing 2 were both trouble-makers and problem-solvers. Thing 1 and Thing 2 were known for their ability to find anything – “anything, anything under the sun!” – said Seuss.

The Things of the Internet are the opposite – they “out there” somewhere, may be immobile or mobile, possibly hard to find and even harder to make sense of. At the same time, they are immensely valuable once you learn to use them correctly. Collecting big data and not using it is like collecting stamps and not showing them to anyone.

If the Things that tell a story can be found, identified and utilised properly, they can provide companies with exciting and profitable opportunities. If not, they can sit unnoticed and unloved at the bottom of dark, dank databases.

You have to put the big data of Things to work, otherwise it is useless. You have to be able to find it and act upon it quickly.

Big data and the Things of the Internet are the fuel with which a new generation of companies will power their profits. McKinsey Global Institute calls big data the next frontier for innovation, competition, and productivity.

The digital world is there for the taking, the sky is the limit. But if we do not use it, we risk being left behind and called digitally myopic.

 

Individual Empowerment

Nearly everyone has a digital ID. And soon every Thing will have to. Anything that crosses the Internet from your smart phone or PC or tablet creates identifying data. The GPS locator on your mobile device creates a data set telling others where you are, where you have been, where you are thinking about going. From Google searches and posts on social media, ordering a book to booking a table – all of these activities can tell a retailer more about you.

You can empower yourself by having a number of services from these retailers at your fingertips — healthcare provider tips, department store or boutique specials, traffic alerts, flight deals. Or, you can simply turn off the ability for companies to offer you highly targeted deals.

But what if your favourite pizza place could sense that you were driving by on your way home? It could pop your usual pizza into the oven and text you that it will be ready in 10 minutes. All you have to do is stop and pick it up. And if you don’t want it, the pizza place can offer it in slices to other passersby – a win-win situation.

Maybe you are in the market for a new laptop, and you go to a shopping mall to buy one using your bank credit card. You decide to shop later for a new laptop case. Meanwhile, your credit card has communicated your purchase and your possible need for a case to local retailers and you receive an offer for one at 30% off in a nearby store. You duck in to take advantage of the discount, then receive a text message with another offer – this time for a 10% discount at a restaurant if you get there within 30 minutes.

This is the power of big data when coupled with location-based services. The idea of on-time offers has captured the imaginations of retailers large and small. Turkcell, the leading Turkish mobile phone operator, has determined that on-time offers are ten times more likely to be taken up than more generalised offers.

As more and more devices interact, individuals develop a richer digital identity. The more information there is, the more service providers can tell about their customers’ needs and wants. And it gives them an even bigger opportunity – to anticipate what customers desire. Online retailer Amazon, an early adopter and innovative user of big data, went so far as to say that it might even start delivering things before its customers order them.

Software AG has focused on an architectural technique known as ‘Intelligent Business Operations’ (IBO) that puts real-time analytic intelligence and decision-making into the very lifeblood processes of the business.


Enterprise Empowerment

The Internet of Things is causing a great deal of excitement among many corporations, which believe big data will drive future profits. MGI says that, for example, a retailer using big data to the full “could increase its operating margin by more than 60 percent.”

Gartner calls big data the beginning of a new era, the “Digital Industrial Economy.”

Jim Grubb, Vice President, Emerging Technologies, said:
“The main notion of the Digital Industrial Economy is that every company will become a technology company, every budget will become an IT budget and every business will become a digital leader.”

To address this, Software AG has focused on an architectural technique known as “Intelligent Business Operations” (IBO) that puts real-time analytic intelligence and decision-making into the very lifeblood processes of the business. The result of this is intelligent business-adapting decisions, based on the big “fast” data blood flowing through business veins. This might be pushing real-time offers to mobile consumers based on their locations, optimising logistics operations to re-route shipping to reduce carbon footprints or detect and prevent fraud while (not after) it is in process. An IBO platform can converge a number of powerful technologies into a modern in-memory analytics and decisioning architecture – including real-time messaging, in-memory data grid, complex event processing and streaming analytics, business process analytics and visual analytics. Together these capabilities can give a business 360 degrees of visibility – and the ability to respond before it is too late. Using IBO, the next generation of big “fast” data at Internet-of-Things scale can be collected, analysed and intelligently responded to.

In the financial services industry, digital awareness is relatively mature. Stocks and bonds and FX and commodities have been traded electronically for a few years now, and banks have learned the hard way that ignoring patterns and anomalies in data can cost them money. Therefore big data is already in use for event-driven systems for real time risk management and surveillance, as well as for ecommerce trading and monitoring in markets such as foreign exchange. And the uses continue to grow – as algorithms increasingly “learn” they require, and generate even more data.

Big data paired with IBO shows the efficiency of a company over time and helps to predict possible problems in the future.

Retail banking is also taking notice of big data, and smart banks are using it to create customer-centric applications such as real time budget management services or real time fraud alerts. If a customer overspends on his or her monthly shopping budget, for example, a smart retail bank using IBO can send an alert to the client. Or, if a customer’s card is used fraudulently, a smart bank could send an alert as the card was being used – rather than email or call the customer after the fact, saving him the trouble and angst of cancelling the card and getting his money back.

There are so many valuable uses for big data if you use IBO techniques. An 18-wheel truck with sensors in its engine can send signals to other trucks in its convoy – telling the other engines about the gradients it has encountered or weather and helping the other to maximise fuel and brake performance.

Sensors on a ship can predict the impact of a malfunction of one engine part on the other engine parts, then can send the information to the correct department to get quotes and costs and schedule a repair.

Big data paired with IBO shows the efficiency of a company over time and helps to predict possible problems in the future. But identifying the ever growing number of opportunities and threats that are buried in big data is increasingly like finding needles in haystacks. And the time window to find the needles– before it is too late– grows ever shorter.

As Karl-Heinz Streibich, CEO at Software AG and author of The Digital Enterprise,1 said in this publication: “The digitization of both the commercial and social worlds has blurred any boundaries separating them and is fundamentally changing the way we do business. There are now billions of interconnected private and business mobile devices that are rapidly becoming an ‘open ended’ or ‘customer-drive’ supply chain. This has resulted in an explosion of ‘big data’ from social networks, mobile applications, RFID tags and digital sensors that will enable businesses to be run in new and yet to be imagined ways. Following the, albeit misattributed, maxim: ‘you can’t manage what you can’t measure,’ it is imperative that organizations today fully utilize their data. The insights that can be gained from this ‘big data’ will open a myriad of new business opportunities and challenges.”

Systems with scalability, agility and speed can help to bridge the intersection of the digital ID and the Internet of Things. Don’t fly blind.

About the Author

Dr. John Bates, Software AG CTO for Intelligent Business Operations & Big Data, Member of the Group Executive Board. In 2011 Wall Street and Technology magazine named John one of the “10 innovators of the decade”. In 2011, 2012 & 2013 Institutional Investor named John in its “Tech 50″ of disruptive technologists. John holds a Doctorate in Computer Science at the University of Cambridge (England).

 References

1. Streibich, Karl-Heinz (2014). The Digital Enterprise: The Moves and Motives of the Digital Leaders. ISBN – 0989756408

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