By Toby Redshaw, CEO, Kevington Advisors
The next generation of the Internet, including the Internet of Things, bodes well for the environment.
Timing is everything and now Volkswagen has just aided the cause tremendously. Then we have Donald Trump, His Holiness the Pope, and Lawrence Lessig all teaming up for the environment (yes odd bed fellows, explanation coming).
The Internet of Things / Next gen Internet
I recently published a little piece for the Sandhill Group that painted a new picture of what the Internet of Things could portend and indeed what the next generation of the Internet will be.
The down side of the Next Gen Internet for some will be an increase in the speed and intensity of competition. Businesses will fail faster and more often over the next decade. All companies will cluster into one of these four sets:
- Great strategy, talent and IT – these are the big winners, the front runners
- Great strategy, talent and poor IT – these are also-rans and struggling
- Bad strategy, talent and great IT – these are just high speed train wrecks
- Bad strategy, talent and poor IT – these are slow speed train wrecks
The combination of three things will define the NGI (Next Gen Internet), the Internet’s next wave:
- Human beings will have leveraged embedded IP nodes; the human will be a network node.
- Many, many things will have IP / network nodes embedded, and their flows of information will be new and truly useful.
- We will move beyond just data analysis and clever math, machine learning, predictive analytics, etc. We will watch networks of human and synthetic data behave, and that behavior will create new questions and opportunities. This more than anything will enable fixes of the many ‘broken’ markets we have and allow access to huge new profit pools. Intelligent views and strong transparency will pervade all markets.
Uber is a great transformative example. But not the way we typically think about that. The combination of IP enabling a thing (car), humans with embedded IP nodes (drivers and customers) and some relatively simple software has changed a market. In all fairness this was a murky, malformed market with an incredibly dense fog bank between consumers and existing inventory. Layer on top of that no real service or quality metrics on either the supply or the demand side. Layer on top of that a big capital asset underutilization opportunity. Layer on top of that improved operational performance (Uber versus say a mini cab dispatch office), massive scale, better operational data (versus cabs with no GPS), improved security, frictionless payment, and zero bad debt.
Uber didn’t invent something new or create any bleeding edge tech. They took a massively broken and disaggregated market and fixed it with embedded IP nodes, a simple set of technology and great timing. Keychain Logistics, AirBnB, Waze, GrubHub, Opentable are all, to some extent, examples of the same market fixing up methods.
So it begins…
This is just the beginning. Our economy is full of ‘broken’ markets with massive latent profit pools for the taking. Almost all B2B will start heading to B2B2C and the middle B will later get crushed. Markets that still have brokers, and there are many, will see a lot of those brokers eliminated completely and in part be replaced by smartly curated, tech intensive solutions. The expansion of the Internet and deeper penetration of IP nodes (the things in the internet of things) will add massively to variability and choice for solutions, services and products. So intelligent curating will matter more and more. ‘Solutions’ will start to be a framework for product design versus simply great products/service. Choice will be managed, smart choices will matter. Green will be a key component of smart choices for an ever-growing segment of the population.
So what does this really have to do with the environment and why do I see this as an optimistic turning point?
There are four emerging trends here that matter for this ‘green positive’ push:
- Waste Elimination/Efficiency. This new ‘swimming in IP nodes’ world will enable massive waste elimination and efficiency gains. That in and of itself is ‘green positive’. Think about smarter building management systems, food supply chains and carbon emitting machines becoming massively more efficient. The first two have upwards of 40% waste in their systems. Think of the latter in Uber terms. More utilization per unit means less units, which has to be ‘green positive’.
- Sustainable Sustainability. This will become a corporate goal and an increasingly key factor in consumer purchasing decisions. By this I mean green positive programs leveraging the Next Gen Internet that also tap into profit pools or costly waste elimination and therefore are sustainable because they are profitable. This is sustainable sustainability because it will survive the periodic belt tightening, cost cutting periods firms always do. This as opposed to say greening my old office building at a high cost just so I can say I have a LEED 3.0 building and hopefully help my brand. The Internet of Things is as much about waste elimination and proactive/preventative process as anything else. We know that there is a giant latent profit pool in eco positive areas. Boards will begin to demand accretive green programs.
- Millennials and Intelligence. Each year this segment will grow until it is quite literally the largest (and most tech savvy, most networked) segment of the economy we have ever seen anywhere. There is an underlying trend already underway to in large part define oneself through ones digital footprint and persona. Sure a lot of that is social media and we know that. But an emerging part is what choice/purchases and affiliations do I make and how smart am I for doing so. This segment will eschew the push of simple fashion/brand by association and go for individualized, curated and smart choices. Zipcar user perceives that as the smart choice, they are smart. The idea that I am cool, successful, tough and macho because I bought a Hummer, today just seems idiotic and a throw back to ancient times, you know 20 years ago. Wealthfront, Truecar, Tesla, Prius, etc actively appeal to making the smart choice and to being smart by association. Transparency and competition leads to choices, choices become intelligent, intelligence and self-optimization become more important and more realistic. Dumb is bad, better is smart. Green will be a consistent component of smart.
- Transparency. This is where we thank VW. This year most F500 boards will have a new agenda item to review what their ‘VW-like’ brand imploding risk is and do they really have the right oversight to ensure they are okay. Apparently software risk is bigger than what we thought it was. The subtext of this will be about truth in eco impact and all things green. The unintended consequence is simply making green a bigger part of the discussion, brand intent and product design/positioning. Making this transparent and verifiable will be an integral element. This is fuel on the fires listed above. Transparency will be a bigger consumer demand. Smart folks like BCG will be called up to help boards externally verify their lack of VW landmines and a real tech controlling environment. BCG and the like and law firms are getting a boon from VW. Depending how you feel about it, regulators will get a boon. Clearly this one snuck by them sort of like a flaming rhino.
VW, Trump, Lessig and the Pope
A moral authority to many and clearly someone without a vested interest in markets per se has come out strongly for the environment. This is of course the Pope.
Donald Trump and Lawrence Lessig are sort of teaming up inasmuch as they are both staunch and vocal opponents of special interest money in politics. A lot of money in politics funds positions that fly in the face of climate science. These positions taken often quite loudly and aggressively are not scientific.
They are mainly just a consequence of the cost/revenue problems with our political market places. At some point the tech social infrastructure, Next Gen Internet and smart leverage will counteract the un-free market elements in our democracy (e.g. two party oligopoly, funding bias, gerrymandering). That may take a while.
But for now the nudges from his Holiness the Pope, Trump and Lessig along with our friends at VW are the needed added fuel for the beginning of a push towards an increasingly eco smart approach to business. This will be broader and deeper than anything we have seen before.
The next generation Internet is human centric. They will be the edge nodes and they will be the centers of their digitized, curated, smarter worlds. As sensors, sensors nets, tags of all sorts and a general swarming of IP connected ‘things’ help clear the fog and waste from so many markets eco-waste and negative environmental impacts will be driven from supply chains and consumption.
But this is not a new story. It is a variation of Willie Sutton’s answer to the judge when he was finally arrested (96 years ago) after knocking off a lot of banks. The judge asked him why he robbed banks. He said ‘that’s where the money is’.
The critical mass of the millenials will push this into high gear and Lessig, Pope Francis and the Donald have all been giving this a good nudge. But the next generation Internet will turbo charge ‘green’ simply because that is where the money is. Green is the color of money.
Toby Redshaw is a leading authority on how to leverage modern IT for competitive advantage and how to take IT organizations to the next level. As CIO for both American Express and Aviva, and in senior IT leadership roles at Motorola and FedEx, Redshaw led IT teams of 10,000+ people and drove multi-billion dollar budgets delivering technology vision, strategy, roadmaps and execution, yielding significant improvements in output, quality, business impact, customer satisfaction and innovation. With more than thirty years of experience leading technology efforts from both the business and CIO perspectives, Redshaw now offers advisory services for technology intensive businesses.