Interoperability – Internet of Things

The big buzz-word today in the high-tech industry is IoT – internet of things. Well, besides robots, learning systems, intelligent buildings, smart cities and self-driving cars. All is the same king/-s dressed in new clothes. When I was deeply involved in the development of applied technology and science many years ago, basically all this stuff already existed. We referred to it with different names, though. The networked enterprise, the networked city, PIMS, AI, … . It is interesting how the tech industry evolve the naming while at the same the market; customers and users etc. slowly slowly increase their understanding of the applicability, value and benefits of new technology and technology concepts. This is based on observations over more than 30 years; that the industry in small small steps has introduced and reintroduced the same hyped concepts over and over again – and creating significant revenues, gold-lined profits, and enormous valuations, while the actual implementation, deployment and economical benefits ha not materialized due to time-to-adopt. Still, Sweden, Swedes and Swedish organization have been early adopters in a global perspective. Do you remember the Internet wave 1996 – 2002, the bubble that burst? The current environment with private equity, venture capital, a focus on automation, outsourcing, “lean” organizations, moving production between countries, extreme valuation on companies with limited sustainable job and value creation – but wealth creating for a few – is not increasing inequality but is very likely building a significant risk in the market…a new bubble to burst. Here is a major financial opportunity hidden though.
I think we will see several new and innovative applications of products in the next few years. Some interesting companies will emerge, and a big shake-out with potential negative impact on the stock-markets around the globe. Looking back history says that big companies rarely are capable of disruptive development introducing products that address the market in a totally different way or changes the foundation in the market. Small companies can do this mainly due to lack of legacy and internal organizational rigidity.

Potential big winners will be the equipment manufactures supplying to network operators and data centers. A few companies that create products and services addressing real needs and creating measurable value for other companies, individuals and organizations. Some industries will be in a position to gain more than others. These are the industries that were the slow-adopters back in 96-02; real estate and building / construction, automotive and transportation, the public sector, education, health-care, and consumer markets. In these industries the maturity when it come to understanding the value technology can bring has evolved to a point where it can finally be brought to use – without to much drama. For the first time – if we put the PV and MS-Office to the side – white-collar work and workers will experience what happened in the manufacturing industry – that if it is not a robot who can do your job better and cheaper there are 100 talented young academically trained “kids” in emerging markets willing to do it. The BPO and outsourcing industry will get a boost and be reshaped.

The industry that has the highest potential and most to gain is probably the Defense sector, being a huge user of technology. Before the defense sector was in most cases the driver in terms of research and development of new technology. Interestingly enough the focus of building state-of-the art systems and technology for specific strategic, tactical, and operational needs and the type of hierarchical line of command has kept the Defense industry away from the kind of architectural concepts we can see being deployed in other sectors. But, warfare is changing dramatically since the enemy act and organize in new ways. This means that interoperability, coordinated missions, ability to penetrate deep into enemy territory without being detected, and if either not be vulnerable or affordable to lose, high payload flexibility, and being deployable in many and unforeseen operational scenarios – preferably without risking valuable and well trained personnel. Sounds similar to other already in use systems? Yes. It is very similar to the changes in industrial organization, the use of technology and how technology is used and implemented. 

The traditional defense contractors all over the world are used to long development cycles, huge budgets, and well specified requirements. I know both US and European contractors looking to develop systems for interoperability, command and control with an Internet of Things like architecture and targeting a delivery time between 2030 and 2045. I also know about companies developing truly open infrastructures providing with higher performing and even more efficient systems, at a fraction of the cost and with a 5-7 year time horizon. Not to forget what Tesla, Google and Uber is offering today and what they have in the pipeline.

Interoperability is about interfaces, communication and messaging between random systems – black boxes. Each black box specialize in something – a sports car or a fighter-jet, or an industrial robot …a drone. To develop such systems and not being locked in the architecture and interfaces needs to be managed – and possible to evolve over time. Not based on pre-set standards and vendor/supplier/contractor dependencies. In the old days it was IBM or riskier alternatives. Then it was Microsoft or the open systems crowd – in the IT industry. In the defense sector the choice is, if available to buy, US alternatives, a few Europeans, (possibly copy/past alternatives from China or Russian systems but not in the domain discussed here), or 30 year alternatives through technology transfer programs. Well, that is as long as the customers do not realize where to go and knows how to go about it.

It interesting that the defense industry and the users seams to be walking in the footsteps of the industry – 30 years behind but with slower pace – without leveraging learning’s and experience. I have noticed this in the most sophisticated defense industry nations as well as some of the emerging. Sweden does have a significant advantage here, but in Sweden it is not politically correct to say of get too involved in this sector.


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