When the Internet had its break-through in the 1990s, it consisted mainly of static Web-pages, reminding on an online version of product catalogs.
Starting with a strong B2C focus, the business world soon joined in (B2B). Even with portals like Amazon, the Internet remained pretty transactional. After a payment, a good was delivered.
Things changed with the Internet of services. The Cloud enabled to provide metered services on demand and to modify the predominant transactional pattern into a relational one, where data is exchanged and treated over a defined time period. The era of big data started, where reasonning engines are analyzing user behavior. "User data" became a precious good.
But the business patterns remained the same: users (private or business) get access to a service after payment. They need a client device (smart phone, or computer) to sign up and to use a service and they are directly involved (through User Interfaces) into the process of service delivery.
Now, the time of the Internet of Things has arrived. Since the early 2000s my colleagues in research and industry worked on this "next big thing". Even the world's IP addresses were enlarged to accommodate far more users (as now not every computer, but virtually every cheese can become a client).
My hypothesis is that the Internet of Things will really break through, once business decisions will be made on a B2T basis, meaning as a business transaction between businesses and things.
The Bottleneck in the Internet of Services
What is the bottleneck in the current business relationship:
- constraint 1: service quantity limited by user consumption - All of today's Cloud-based services are initiated and triggered by humans. Virtually every service communicates the results of its service generation visually through a User Interface or accustically. Software like CRMs and Finance tools require time of and interaction with humans, to get their input and to provide the results. Games and music streaming compete for leisure time slots in the life of their target users. In short: daily business is limited to roughly to 24h multiplied with 7 billion potential users.
- constraint 2: decision making - Even the purchase decision making of the target consumer is constrained by his time and willingness to opt for a service and to evaluate its features. Decisions are often rather triggered by a provider's visibility and marketing budget than by factual advantages.
The New Set-up: IoTS -The Internet of Things & Services
The first important point to see is that there is no autonous "Internet of Things". I rather prefer the term IoTS - the "Internet of Things & Services". Things get onboard intelligence and are connected to the Web. But it is the services that run these things in the context of processes.
Remember the bottleneck in the Internet of Services, the limited amount of users and their inability to consume many services concurrently. In the IoTS, we open up the market to an almost infinite number of concurrent consuming devices. Their proper operations do not rely on user interaction anymore. Once the smart home is optimized on user preferences, it autoadjusts, depending on whether the user is there, in which room, at what time of the day, week, etc. The user can consume many more services concurrently. Constraint 1, which we introduced previously has been eliminated.
But constraint 2 is still a problem: the user is still required to make a purchase decision (or rather call it: a service initiation decision). I say this is anachronistic and bad for users and providers. Let me describe why.
The IoTS and Closed-loop Process Optimization
We said beforehand that services run the things. In more complex contexts (when several services are involved), they orchestrate the whole process, meaning including and excluding services as well as tuning them in their quest of continuous process optimization. Such an optimization is a continious process. We call it closed loop process as it looks at the results and tries to optimize control based on a comparison of achieved results, initial situation and goal sets.
The more intelligent such a process is (it will soon become a learning process, you may call it artificial intelligence), the more it can be able to test one service against another one, and know (ideally within the trial period), which service is better in a specific context.
Can you imagine the poor user, locked within a plethora of service acquisition and cancellation decisions. That does not sound like a good idea. But how can we do it?
Time for B2T
You see where I am heading at. We need processes where purchase and cancellation decisions can be made automatically. Please do not say: "I will not delegate this decision to a stupid bot". Many of you delegate their wealth management (purchase and selling of stock market shares) to bankers. I really do not want to question the intelligence of bankers, but we may learn from this process analogy:
The system works as the banker acts within a preset rule-set which allows him to act rapidly and independenty, and sometimes even to your benefit.
Two-sided Markets to Orchestrate IoTS processes
Similar to banks, which broke company shares to private or corporate investors, we can imagine two-sided markets. These are online platforms which have on the one side access to the user's "things", and connect them on the other side to a multitude of third-party services, through APIs or deployed locally.
Instead of doing the micromanagement of purchasing, cancelling and tuning every single service, the user could set goals, which may be more or less fine-granulated. Also frames like monthly budget should be set. Then the machine can set up and optimize the process, continuously. The better the system knows the user, the easier it will be to include new services. This process is science fiction. It can be done right now, and like the Internet, may grow rapidly and boost once more the turnover figures in the Internet.
This article really gives a helicopter perspective. Lots of issues like privacy, or cybersecurity need to be addressed in detail (from a technical, social, and legal point of view).
The whole thing has one big advantage: we, the users finally get out of the critical paths; meaning: we are not driving the processes anymore, but benefit from them. We gain quality time, for instance to switch off the computer (right after you red my blog articles).
How do we do (Inbound) Marketing and Sales for IoTS service providers?
But how are these services marketed, given that the reasoning engines which optimize the processes are immune to billboards and marketing bla. Also search engine optimization (SEO) will lose relevance. And what will be the sales tasks?
It might be the hour of birth for IoTS-optimization (let us call it IoTSO). The nature of IoTSO will pretty much depend of the nature of that two sided market. I imagine two options:
Option 1: a centralized platform (imagine it as an IoTS App-Store) with clearly defined APIs, policies and one interface to the customer.
Option 2: the semantic Web, as imagined by Internet-inventor Sir Tim Berners-Lee, where services and their purpose and interconnection possibilities are machine readable. New generations of search engines might evaluate most suitable services and orchestrate them.
Marketing becomes more and more a part of the product (as already started in SaaS where distribution channels are part of the product itself). Optimized on the options described above, marketing could mean:
- providing ease of use
- semantically annotate the service
- provide the right APIs and compliance to platform or orchestrator policies
- provide sufficient machine-usable trial periods
In the past, we often said, marketing generates sales ready leads, and sales closes the deal.
In times of B2T, these concepts will soon become obselete ...
Image "nature" courtesy of Marcin Morga, (cc by 2.0)