Summary:

Devices connected to the internet — everything from coffee makers to toys — are going to become a widespread consumer phenomenon sooner than you expect, even though Europeans and Americans for now regard the technology in different ways.

Michael Simon LogMeIn Alicia Asin Libelium Structure:Europe 2013
photo: Anna Gordon/GigaOM


Session Name: Do you really want all of your things on the Internet?

Chris Albrecht
Alexandra Deschamps
Alicia Asin
Michael Simon

Chris Albrecht 00:03

Thank you, gentleman. In addition to our next panel featuring an array of great speakers, they also have really complicated names to say out loud. And they warned me as such, so we’re going to try it, even though I will probably butcher them. So I apologize in advanced. But what we’re going to talk about is, do you really want all of your things on the Internet. Spoiler alert, Yes, you do. That’s going to be moderated by Alexandra Deschamps-Sonsino, founder of Good Night Lamp. She’s going to be speaking with Alicia Asin – CEO and Co-founder of Libelium, and Michael Simon – Chairman and CEO of LogMeIn. Please welcome our next panel.

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Alexandra Deschamps 00:50

Hi everybody. How are we doing? My God, come on, come one.

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Alexandra Deschamps 00:58

Thank you for having us here. I’m extremely excited to be moderating this extremely quick panel. I feel like we’re running a game show ensemble here. So we have 20 minutes to talk to basically, the most important people on the Internet of Things in the industry right now. So Alicia Asin, you are CEO of Libelium which is based in Zaragoza in Spain. Michael, you are CEO and co-Founder of LogMeIn, which I heard very recently was just born in Budapest, but also has offices around the world, 600 people. How many people in the Libelium?

Alicia Asin 01:36

Forty.

Alexandra Deschamps 01:36

Forty. Really, out of the entire description of this panel, you’ll be disappointed to see that we don’t necessarily address the, What is the Internet? A thing? I’m entirely hoping that you will just Google that for yourselves. What I wanted to address is really, what are the business opportunities and what is the business landscape like at the moment. So Michael, you joined LogMeIN in 2009. We’re now in 2013. What’s changed for you and your business?

Michael Simon 02:09

Essentially, when we think about the Internet of Things, we got active in it late 2009, early 2010. LogMeIn’s a public company, so we have to report out very frequently to our shareholders. For years, the Internet of Things was perceived as “Michael’s science fair project.” People were just not excited about it at all. Really, in the last 9 months – as we started 2013 – there’s been a sea change in interest. We actually have a product called Xively, which is a platform as a service for the Internet of Things. The reason I mention that is a year and a half ago, the people that would show up to use that service were developers, but they’re really individuals who are really more hobbyists – if you will, trying to understand the technology. Today, maybe 2,000 companies a month join our platform that are serious developers. I think it’s safe to say there isn’t a company that makes appliances for the home. There isn’t a company that’s involved with the distribution of energy or other utilities. There really isn’t a company that is involved in distribution or logistics that isn’t very interested in Internet of Things. So I feel like the time has really come and it’s now happening as we sit here.

Alexandra Deschamps 03:34

Alicia, you are a computer engineer and you’ve been involved with the company since 2006. On top of collaboration or accidental collaboration with LogMeIn over the Fukushima Geiger sensors– you might want to Google that. Has anything changed for you?

Alicia Asin 03:53

I think that we can see two main parts. When we started in 2006, there was no term of IoT. The terms was sensor networks. Since we were doing this very versatile and horizontal platform, we were attracting all kinds of innovators that wanted to experiment at all fields. So our sensors have been used for monitoring variation levels to monitoring stress levels in koalas – I promise, that’s true – and to monitor parking spaces. But always in small scale, because there were people trying. In the past 12 months, we’ve started to see a big change in the kind of customers getting attracted by our technology. It’s not technology enthusiasts and university researchers anymore, but companies with a compelling business case. Now, we could say that it is happening right now. For the very first moment, we are seeing a scalability in the kind of products involving the IoT. The second thing we have seen is the importance of makers. Of course, makers have been around even before we were talking about wireless networks. But they are taking a very active role in the IoT right now. That’s because they are very inexpensive platforms of open hardware that enable, because we have crowd funded platforms that enable them. So for the first time, we could say that we are moving from an industrial IoT or an IoT only for corporations and business to individuals and consumers IoT, which makes a global IoT.

Alexandra Deschamps 05:57

Would you agree with that, Simon?

Michael Simon 05:59

I would. I would totally agree. Essentially, we hear the terms, There’s going to be 50 billion devices on the Internet by the end of this decade. Which sounds extraordinary. There are about 6 billion devices on the Internet today, so a factor of ten increase. I actually viscerally believe – absolutely, without a doubt – it’s my belief that that number’s low. What we see is pretty much anything with a micro-controller – anything with an on-off switch, even an inanimate objects being attached with the QR code are becoming part of – if you will – the known Internet, the known world of connected objects. I actually think it’s gone from an R&D project– I wonder if we could somehow control a switch with an iPhone app, to something now where scalability, inner operability, things like policy management, authentication, and security are enormous issues for people. The reason they are enormous issues, it’s no longer a question, Can we implement some sort of function? But can we deliver this type of experience at the type of scales that are just unknown to the Internet today?

Alexandra Deschamps 07:14

So to reach those scales, what do we need in terms of engagement with those end users – whether they’re customers of a business proposition or customers who are buying something at John Lewis and happens to have connectivity? What gets us to that hockey stick graph?

Michael Simon 07:34

When I look at the Internet of Things, the reason I’m super excited about it and so bullish on it, is I think it’s rare when you have a technology opportunity that simultaneously – right now – delivers faster, better, cheaper solutions. Just to give you some real numbers, the world economy broadly spends about $75 trillion. And in most developed countries, about 9% of that economy is in logistics and delivery. So it’s in order of magnitude – greater market – than say, advertising, if you were to look at the US Market. So you have this $1.4 trillion logistics opportunity just in Europe each year. If you can fix that by a little bit – move the needle 4, 5, 6% over 6 years – that’s enormous economic consequence to all of us. So you have this faster, better, cheaper, making what we do better right now. At the same time, the same exact technology allows you to deliver user experiences to consumers – to individuals – that really are delightful – that make things possible that weren’t possible before. So you have new classes of products – home automation, quantified self, things that we can’t even really image are starting to come out quickly. Then if you look on the longer term, let’s say five, six seven, eight years out, you have the opportunity to solve the world’s really humongous problems – energy consumption problems, climate change problems. So this technology, which is in its construction very simple – we’re going to connect things and allow them to interact. At the end of the day, we think about connecting people so they can interact with each other and then the world around them. Not a particularly complicated idea, but it’s profound in what it can do for us. And I think people are really starting to take notice of that. At the same time, Moore’s law – which we take for granted when we look backwards. But it’s hard to imagine its impact when we look forward. So when I look at a $20 bill of materials – that cost to let’s say, Internet enable a consumer electronic device, perhaps – we have to remember it’s going to $0.40 cents by the end of this decade. Suddenly, things that weren’t economically feasible to make Internet enabled and part of the IoT totally become feasible. We don’t just think about traffic control systems or industrial pumps, we think about disposable toys as having a brief, but important life on the Internet.

Alexandra Deschamps 10:26

Would you agree with that, Alicia?

Alicia Asin 10:28

Yeah, totally. I think it’s also very important to be able to populate with [inaudible] infrastructure. So there won’t be enough business until we have enough infrastructure. Let’s take the example of Smart Cities, for example. Now Smart Cities are being performed by integrators. IBM can have one city full of sensors and performing smart parking, smart [inaudible] solutions, and control the monitor, environmental, and everything. But if we think about a new ecosystem and about the new industry we are creating, we would need a whole country with the same sensors to enable new businesses. For example, trading with the data, even trading with the connectivity options for the sensor data, enabling services like apps for your Smartphone that connect to the sensor network in the city and tells you if the noise levels are too high in this area or not, or where can you find a parking spot in the city. The more infrastructure, the more players will be coming in. The more scale the market will be demanding, the cheaper the connectivity chips will be, and also again, the bigger the infrastructure. So I think it’s taking traction. One thing here will be making the traction to make it faster – the adoption.

Alexandra Deschamps 12:13

This is the perfect segue into my final question – I suppose – which is, you’re both commuting between the US and Europe. What are the main differences that you see in people’s approach to both IoT, but also in terms of their ability to see potential in that business opportunity? Alicia?

Alicia Asin 12:36

The first thing to say is that the Iot was born, we can say, with a [inaudible] protocol, and that was designed specifically to address the industrial automation problem. We had one technology and then, suddenly, all the innovators were saying, This is very cool. Can we just get this technology outside and use it to monitor forest fires? And many people started to apply the concept of wireless communicated and battery power to make all kinds of very critical processes in really harsh conditions for the technology. So I think that there was a very big gap from the market demands and the market understandings, and the initial [inaudible] of the technology. In 2006, we saw two things. In the US, wireless and certain networks lost momentum – it was decreasing. While in Europe, we have FP7 and European Commission grants to fund research projects – the kind of project you need to do to know what happens if you [inaudible] 2,000 [inaudible] in a forest for two years? What happens? Well, I don’t know. Nobody knows. But you really need to invest that money just for research. So I think that these funds have been critical to put Europe in a more strength position – in technology terms, at least. That’s why there are so many startups doing highway and network protocols in Smart Cities here in Europe, because we have the bulk of that.

Alexandra Deschamps 14:37

Michael, you guys acquired Pachube, now launched as Xively, very recently. Was there an opportunity there that you think is unique to Europe?

Michael Simon 14:48

I do think there is a fundamental difference between early adopters of connected object solutions – between say, North America and Europe. This is very broad brushed. But if I were to look at our customers here, they’re typically focused on efficiency – how can we improve a problem? How can we solve something in a way that uses less resources? If we’re to look at our US customers, they’re more interested in the experience. They’re trying to solve a problem, not from an efficiency or consumption of resources, but can we deliver something to either our customers, our partners, or our end users, that is differentiated. There’s a great example that I just learned earlier, coming out to England shortly. There’s a very successful thermostat in the US called the Nest. You can argue it’s an Internet of Things– first really big scale, successful consumer product. It’s a loved product. If you look at the reviews, it’s all about it looks great. Number 2 is I can use my iPhone, Number 3 will be I might save some energy with it. The whole nexus of that products was to be more efficient and save energy. If we look here, there’s a product called Current Cost which we had the good fortune- some of us had the chance to participate in this project. It’s 100% about reducing energy consumption in households. I think that’s a luster of the difference we see right now, but I think these things will balance out as we go forward in the next couple of years.

Alexandra Deschamps 16:48

To finish off, if you were to cast you eye on the future, what do you think will happen in the next 12 months? If things have changed dramatically in the last 12 months, what do you think is going to be the next step that the Internet of Things will take? Alicia?

Alicia Asin 17:08

Not sure if it will happen in the next 12 months, but my dream is that IoT and Smart Cities will be able to drive more transparency to the governments to help us to make more clever solutions when we are voting, basing facts of measuring everything. The IoT’s all about the new culture of measuring things, measuring processes, and then improving them. We really need that in government, and there’s a social claim globally for that. I think that’s going to be the most important legacy of the IoT. Not sure in the 12 months, but for sure in the future.

Alexandra Deschamps 17:57

Very soon. Michael?

Michael Simon 17:59

I think you’re going to start to take for granted– as we go into 2015, not necessarily the next 12 months. In the next 12 months, people are building a lot of things that are going to enter your lives that have the IoT as an assumption. From coffee makers to parking meters to vending devices. We’ve long known about – for example – a Coca Cola machine that is Internet enabled and can report, Hey, I need more Sprite or whatever. The Coca Cola machine might generate $25,000 a year in receipts. We’re starting to see that technology trickle down to things like gumball machines that might generate $1,500 a year in revenue. So it’s not going to be an “aha” moment, but we believe that you’ll see more and more things that you just bump into that are smart, aware of their surroundings, and part of a bigger network of smarter things in our world.

Alexandra Deschamps 19:07

Michael, Alicia, thank you so very much for being with us today and sharing your thoughts. Thank you to everyone here for not falling asleep. If you have any questions for Alicia and Michael, you guys will be around all day, and use the hashtag.

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