If you live in Silicon Valley, you will probably find yourself surrounded by technologies that push the limits of your imagination. If you take a stroll through the bay area, you may see drones flying around local parks, autonomous cars driving down the streets of Palo Alto, or thousands of people staring addictively at their Apple or Google powered phones while pacing down the sidewalk trying to catch Pikachu using Pokemon-Go. And with the impending launch of Microsoft HoloLens and other functional smart glass wearables, we will have pixels integrated with our line of vision so much so that they will become part our environment.
A lot of people seem to point to these futuristic gadgets that we have always dreamed about, as the technological takeover; but I disagree. These groundbreaking inventions are amazing, but after all they are a product of technology companies doing technology things. Technology companies have always been forward thinking in creating products that provide a “wow” factor, with varying degrees of functional use. From my point of view, the next technology revolution will not be defined by the “wow” factor, but defined by how technology is adopted by and the impact it has on industries that have previously been averse to using forward thinking technologies as part of their business model. Once we see technology creating efficiencies in our court hearings, our insurance quotes and our government’s ability to manage resources effectively and complete innovative projects quickly, then I will believe that the new technology revolution has done its deed. These slow adopting, but important verticals in our society are finally turning to technology to make long needed improvements to grossly outdated processes. Most importantly, these slow to adopt verticals are finally admitting that they cannot do this on their own, that they need to bring in more forward thinking partners from the technology sector to help them accomplish this.
The biggest boon to the technology sector this past decade has been big data. Companies have found ways to collect data, and make revenue-driving decisions based on assumptions created from these data sets. Moreover, machine learning allows technologists to create artificial intelligence models that analyze large data sets and make customer predictions and revenue driving decisions with minimal human intervention. This type of technology mostly exists in the web and mobile space, but every industry and every company can use data analysis to boost accuracy and scour a larger scope of data to better understand and quantify every aspect of their business. The Internet of Things will allow companies from all industries to perform data science by utilizing smart devices that will collect insights into customer habits or areas of the business that can be improved that were previously not obtainable. Smart devices will also enable businesses to automate mundane tasks so employees can focus on the thinking aspects of their role, with a never before seen accuracy by removing human error. The Internet of Things will give inefficient, slow to adapt industries the opportunity to achieve efficient results by implementing technology and data analysis that has never been available to them.
The only way these low technology companies and verticals will be able to get in the game is by partnering with technology companies that can help them achieve these results. Just look at what some of the biggest non-technical companies have accomplished by leveraging a technology partner to help expand their business. In 2006, Nike partnered with Apple to create “Nike+iPod”, a joint effort that allowed runners wearing the Air Zoom Moire (and subsequently, all Nike shoes) to track their distance, calories burned, and pace, and receive feedback using their iPod. This helped establish Nike as the go-to brand for athletes looking to monitor their results and make improvements. This opened the door for a continued alliance between Nike and Apple which includes HealthKit and more recently, a collaboration for the Apple Watch. When Starbucks realized that customers utilized coffee shops for more than book reading and report writing, they partnered with Google to offer free high speed internet at many of their premier locations. This has allowed Starbucks locations with Google WiFi to be the go-to coffee shop for customers seeking fast internet access for work, school or social media. It certainly is for me. Disney has used their alliance with Hewlett Packard over the years to ensure they are utilizing cutting edge technology for their theme park attractions, computers and servers in all parks and resorts, and for their web presence and increased digitization. Having a partner like HP to ensure Disney stays up to speed on all latest technologies has allowed them to find new ways to drive revenue in a highly technological world.
Though many companies have been able to shift their strategy and grow their business model by using technology partners, other industries have been slow to adopt. As most people have experienced, the courtroom, insurance brokerages and city governments all house very slow, outdated and inefficient functions, and all have been hesitant to adopt cutting edge technology or new ways of operating (so has the medical field, but that is a whole another story we will save for a different day). After seeing the fast growth in the technology sector, these verticals are finally starting to realize that they need to jump on board, and are finally becoming self-aware enough to admit that they need help to do so. Internet of Things can help by producing smart devices that collect the data they need, and back-end analytics that will help them make better and more accurate decisions to spur growth and create efficiencies in their processes.
As part of an interview with insidecounsel.com, Linda Sharp, Associate General Counsel of ZL technologies states that as businesses expand their network of connected devices and collect more data, courts will expect this data to be discoverable. She mentions that IoT data has already been used in personal injury lawsuits, and it is possible that sensor data will start becoming more common in corporate litigation. Linda says: “as the IoT matures, courts will have less patience and a higher expectation for businesses to produce data from connected devices when deemed appropriate or relevant.” Though this courtroom breakthrough may not necessarily require technology partnerships, it will require the government to work closely with technology companies regarding data regulations such as data ownership and the responsibility of this data.
Let’s try another boring, outdated and inefficient area of business: how about the insurance industry! The insurance industry has always boasted that premiums will be lower for more low risk customers. The problem is, there have only been a few tangible data points insurers can use to actually asses whether someone is high risk or not. With IoT, more data is available, and with more data, insurance companies can more accurately asses whether a customer is high risk. Just as car companies continue to add sensors in new models to collect speed and safety data of the driver, auto insurance companies are partnering with IoT companies who create driver tracking devices in an effort to measure the driver’s risk of an accident based on their actual driving habits, not just their history. The same concept has been adopted by home insurance companies. All-State has partnered with Rogers Smart Home Monitoring to lower premiums for customers who opt-in to certain packages, AXA has partnered with Hive, and Liberty Mutual has partnered with Nest, amongst others. What if the same is done for health insurance? Doctors are already giving patients health trackers to measure their habits. They are also prescribing digital pills that pair with wearable devices to allow doctors to manage and treat chronic conditions, monitor that the patient is taking the pill as prescribed, measure real time vital signs and monitor reactions to a given drug. If health insurance companies can partner with medical institutions to retrieve this information (I know, a galore of privacy issues!), they can reward patients who stick with the doctor prescribed healthy habits, by lowering their premium. Life-style based life insurance will allow more accurate health insurance quotes.
The last area I will discuss, which is quickly gaining momentum in terms of IoT technology integration, is the much maligned city governments. City governments have always been known for inefficient resource management, outdated city planning, and most importantly, slow development of any infrastructure growth initiatives. They are wisening up and realizing that the government alone will not be able to implement the necessary technologies needed to make the hopes of energy efficiency and innovative smart cities come alive. Not to mention, getting funding for new innovative projects is always an issue. Cities are starting to partner with technology companies to allow them to design and innovate these smart city initiatives. Sidewalk Labs, a subsidiary of Alphabet, is willing to not only design but also fund these projects, however they want full autonomy of the redesign, which would require the state to remove regulations on utilities, parking and city design. At this point governments are hesitant to give up control to corporations, however I believe the offer of providing the investment and design of energy efficient solutions may convince some of these governments that this is the best viable option to rebuild our cities.
The three verticals highlighted above are some of the most known to be slow moving and technology averse. There are many others that can improve by changing their mindset. If the forward thinking leaders in technology can help put their fingerprints on these and other outdated verticals, we will find ourselves living in a much more efficient and better world. The old fashioned industries with hard-headed minds who have always been averse to change are starting to buy in. If they are willing to work with technology partners to add intelligence to their processes, the commonly overused Silicon Valley mantra will come true; IoT will make the world a better place.