The Connected Effect

Machines - Embracing The Network Effect – Part 2…

Posted by Dale Calder

Jun 22, 2011 10:55:00 AM

“The more users connected to a network, the more valuable that Network becomes”, Metcalf’s Law… 

This was one of my key themes from my Axeda Connexion 2011 keynote.  

For the past 13 years, the M2M industry has been focused, almost solely, on connecting things.   If you go to an M2M conference, listen to a M2M webinar, or read an M2M article, the topic always drifts to connectivity.

  • What type of communication to use?
  • How much data to send?
  • How much does the data cost?
  • Wireless, wired?

It drives me nuts…

When I was preparing my keynote, I kept wondering why there was a myopic focus on connectivity in M2M, when it’s clear that the value happens on the other side of the pipe (the user) …   See Metcalf’s law above.

Then it dawned on me … we focus on connectivity, not only because it is required, but also because for most of those 13 years, there really wasn’t a good way for connecting users to a M2M system.

So I used my pulpit at the Axeda Connexion to explain what I coined, the “Cloud Phase” of M2M.   In the Cloud Phase consumption of M2M data becomes the focus and connectivity is assumed.

In discussing this phase, I first went into why the cloud is such a key enabler.   Directly from the keynote, my description of cloud: 

Cloud computing contains the following three elements: 

1)     It’s Everywhere
2)     It’s Elastic
3)     It’s Consumable

I think of it a lot like electricity. None of us know the magic of power creation or distribution, but we do know that we can plug something into an electrical outlet and it just works. 

The cloud is a lot like that …  Data is located in a place where it can be aggregated, analyzed, and distributed. Its ubiquity enables massive consumption of information on an unimaginably large scale.

I then discussed cloud as the key enabler to the unleashing the power of the network effect in M2M:

“It is the wide consumption of M2M data and its millions of users that will create the virtuous cycle that will enable the M2M industry to become the next Social Networking of technology…. “

Finally, I discussed how the network effect is ruling the future of the Internet.   I discussed how M2M unleashes a network effect so powerful and large that in the future it will dwarf even Facebook in “connectedness” … 

Sean Parker, the guy who is most famous for starting Napster (but richest from his involvement with Facebook!) stated in a recent interview: 

 "Companies that harness the power of networks will dominate the future of the Internet." 

The more I thought about the quote, the more brilliant I thought it was. With Facebook, we all act as a hub for our own networks of interconnected friends. In M2M, that hub is the device. The key to the M2M industry generating the type of value that Facebook is unlocking is to extend the personal networks of those devices to as many users and uses as possible.

Let’s do a little back of the napkin math … What if 50 billion devices were the hub of 100 human and business interactions. That would be tantamount to a network with 5 trillion users. Remembering Metcalf’s law, I would contend that the leverage and value creation that can be unlocked from this network would dwarf what we are currently seeing even from social networking…” 

I concluded my keynote with a challenge to everyone… 

I challenge each of you to look to your markets & your organizations, and think about how you can use the M2M cloud to drive massive M2M network effects on top of your connected products.

In the end, we are all part of an industry that will reshape the fabric of the world.   Connected products, connected not only to the company that sold them, but to the world of users, application writers, and each other, will reshape how our global infrastructure operates and how we interact with the products we use … Ultimately improving our quality of life… 

I can’t wait…

Topics: M2M, Connected Products, Axeda Connexion, cloud

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