With more data created in the past two years than the rest of history put together, IBM wants to help companies make sense of the Internet of Things
The Internet of Things (IoT) is a phrase that is accompanied by consternation in many business conversations. What is it? How will it affect my business? How can I start using it?
But with predictions that $1.7trn will be added to the global economy with the assistance of 29 billion connected devices by 2020, one thing is for sure: you can’t ignore it.
Harriet Green, who joined IBM nine months ago to head up its new global IoT division, compares the inevitability behind current discussions to the time when people discussed the idea of every business, large or small, having a website.
“It doesn’t really matter where you are, what counts is how fast you’re going to learn and leapfrog,” she says.
Green refers to IoT as a movement, rather than a trend or “back office” digital development, which will affect all companies whether they understand it or not. And even though IBM itself is no stranger to IoT – it has been exploring sensors and connected devices as part of its Smarter Planet work over the past decade – she acknowledges the tech giant also needs to transform because of the sheer scale and speed of the change.
The stakes are high for the company that focuses on “restless reinvention” – and where revenues have been under pressure for the past four years. But with the personal mantra of “getting better never stops”, Green is up for the challenge.
Green is, of course, no stranger to transformations either: the 2014 Veuve Cliquot businesswoman of the year was responsible for turning around the fortunes at her previous employer, holiday company Thomas Cook. The company was valued at less than £150m when she joined in 2012, and worth nearly £2bn by the time she left two years later.
“I like transformations. I like to do difficult things,” she explains.
Combined with the prospect of running a “start-up inside IBM”, funded to the tune of $3bn, the role at IBM “pipped other CEO opportunities at public companies, opportunities in China, in India and in Silicon Valley,” she says.
IBM announced it was creating its new Watson IoT division – around the artificial intelligence system that famously beat contestants in the TV game show Jeopardy – at the end of last year.
By using cognitive computing – or Watson technology – to do what human brains struggle to do, it wants to help its clients make sense of the data generated by the increasing mass of connected devices, whether they be “contact lenses, railway tracks or hospital beds”, says Green.
She adds that more data has been created in the past two years than in the rest of history put together – and IBM believes that 90 per cent of the data collected is currently wasted. To counter that, Watson’s capabilities include analysing video, images and text, understanding human language and using machine learning to monitor data, predict trends and suggest action when anomalies occur.
We're at the start of a new era of computing. It's creating new products and services
Green turns to Beijing for an example of the technology in practice – the city’s authorities are using it to monitor pollutants, track patterns and model ways to reduce them. It has already seen reductions of 20 per cent. “This is a power example of the IoT changing lives. It’s not just about industry.”
The same can be said for a three-year partnership deal, announced in April, between IBM and Sesame Street to create personalised educational products. These will use Watson’s natural language processing and pattern recognition to adapt to the learning preferences and aptitude levels of individual pre-schoolers.
But business applications across sectors from retail to automotive, and “up and down the supply chain” will be what really determine IoT Watson’s success. Examples here already include applications around fuel efficiency, maintenance and operational optimisation for aircraft (which IBM is working on with Airbus), and analysing the data of sports cars and speed boats in action to improve performance (as it does with Honda F1 and SilverHook). And data collected by lift and escalator manufacturer Kone ensures preventative maintenance is done at the best time, minimising negative experiences for the 1 billion passengers it carries every day, Green explains.
“We’re at the start of a new era of computing,” she says. “The whole movement of the IoT is about the digitising of the physical world. It’s across every country. And through collection of the data, it’s creating new products and services.
“Being an early adopter and an innovator certainly places you in a very strong position. IBM has Watson – and no one else has Watson – and it wants to be a major first mover.”
A brave new world
“But the difference with the IoT is I don’t think one company can own the space,” Green continues.
IBM already works with companies such as Intel and ARM to develop its capabilities. It has also opened up Watson APIs for others to develop with – and progress relies on innovative clients. But, placing the emphasis on thinking about things differently, Green believes that strategic partnerships are necessary to overcome barriers to firms using IoT successfully.
The most recent of these is with Cisco, which many would have classed as an IoT competitor.
Watson runs on cloud services, and the lack – or cost – of connectivity can make it hard for firms in remote locations to benefit from IoT analytics. Using Cisco’s hardware, which already has its own analytics capabilities, to host Watson technology, “takes the technology that last mile” and makes it more accessible.
Whether or not this development is the “final frontier” for IoT – as IBM hopes it is – depends on the business appetite and policy environment facilitating its adoption. And although the UK likes to think it is a leader in technology, the decision was taken to headquarter Watson IoT in Munich.
Munich did better than the US contenders and the UK contenders
“When we looked at where we could centre the global IoT, we looked at infrastructure and logistics for Asia, for Europe and for North America. Munich does very well on those,” explains Green. “The Germans are investing in companies that are investing in their people. We need the very latest and best data scientists, architects, designers and a flow of talent into this environment.
“And when we reviewed all of that globally, Munich did better than the US contenders and the UK contenders. It really believes in the transformation.”
Munich is also close to the headquarters of two flagship clients – Siemens and Airbus.
Nevertheless, talking to Business Voice from IBM’s South Bank offices, Green adds that with 1,000 recruits to find for the new division, the UK will also be an important recruiting ground.
Tackling the digital divide
Green also references a reception held at the House of Commons in April, in partnership with the CBI and hosted by Ed Vaizey, the minister responsible for the UK’s digital industries, which discussed “the amazing opportunities for cognitive technology here in the UK”.
In terms of working with government, she sees clear potential for a “powerful relationship” with Watson Health in the National Health Service.
Yet the main focus for the event was to highlight a growing digital divide between the companies in the UK that understand the digital revolution and are embracing it – and those that are being left behind. So how can the laggards be brought up to speed?
“Any company, any CEO wants to think about how to grow,” Green replies simply, advising them to think about what two types of data they would like or need to help them grow. “Where would that come from? Your own business? A partnership? A relationship that breaks down the old barriers of competition?”
She suggests the answer lies in not overcomplicating things.
“Throughout all the major changes in technology, it’s been about man or woman and machine working together,” she says. “Everything can be a computer – it’s just a matter of what you want to get from it and how it could help your business.”