Techonomy: Internet of Things: Turning Hype Into Business

Internet of Things was supposed to revolutionize the world years ago, but has largely failed to live up to its hype. How will it succeed in the future?

The following transcript has been lightly edited and condensed for ease of reading.

 

David Kirkpatrick: We’re going to talk about the Internet of Things in this next section and 5G with Shannon Lucas of Ericsson, who’s about to come on stage here. She’s head of emerging business global customer unit at Ericsson. And Sean Mehra, who is the chief strategy officer at HealthTap, which is a digital health company that aims to simplify access to primary healthcare for individual consumers and patients. And the reason we have Sean is because healthcare is an area that can really be changed in this new connected world. But before we get into those details, Shannon, just give us the state of play of the Internet of Things and 5G and why it matters so much to Ericsson.

Shannon Lucas: Sure. I think it’s important maybe to start for the audience with who Ericsson is.

Kirkpatrick: Yeah, go for that.

Lucas: It’s a very humble Swedish company so not everyone maybe knows. It’s about 140 years old, based out of Sweden, and we power about 40% of the world’s mobile traffic. So everything from radio to radio, Ericsson builds and powers. We have about 8 billion subscribers on Ericsson networks.

We’re at this inflection point now where 5G is coming out. We have 18 named contracts of companies around the world that are actually right now rolling out 5G. And we know that this is going to be one of the key enablers of unlocking the Internet of Things that we’ve been talking about for probably far too long.

And there’s some good reasons why 5G is an enabler. One of the key differentiators is obviously the speed, if you’re talking about massive amounts of data that you want to download. But there’s about four different ways that we think about IOT in this new 5G-enabled world. So we have sort of the mobile broadband, which is lots of data. We have critical, which requires super low latency. We have sort of the massive, where you have maybe a million connected devices in the size of a football field. And then finally we have industrial, which has its own specific requirements. And 5G and the ability to do network slicing will enable a lot of those technologies.

Kirkpatrick: What do you mean—what is network slicing? We don’t throw those things out without explaining them.

Lucas: Sure. So network slicing is the ability to actually sort of create logical networks from end to end for a specific use case. So enterprises will be able to work with the providers to make sure that they’re meeting those either mission critical needs or super low latency needs while sharing all of the infrastructure with the other users.

Kirkpatrick: So like the same transmitter could convey both an agricultural sensor once a day and also a self-driving car kind of thing?

Lucas: Absolutely. Yeah, nailed it.

Kirkpatrick: That’s very interesting. So—but it is a huge—I mean obviously you’re here because it’s a huge growth opportunity for the whole wireless industry. I mean, this is a phase shift really, right?

Lucas: Absolute phase shift, yeah. I mean, the industry experts say that it’s like $619 billion of new value that will be created by unlocking 5G and IOT in about 10 different industries. And again, we go back to we’ve been talking about this for a long time. And I loved what Soumitra was talking about, it’s an issue of not just that the solutions haven’t existed, but it’s an issue of getting scale. And we’ve seen some challenges that’s not just about 5G unlocking it, frankly. I think that the value and the use cases that 5G will unlock are making people pay attention.

Kirkpatrick: Yeah.

Lucas: And the fact that we can have this secure, ubiquitous connectivity takes away one of the challenges that IOT solution users have encountered in the past. Also then, because of the value that we’re trying to unlock, there’s this issue of fragmentation in the marketplace. So if you think about everything from the, you know, physical modules you have to put in all the way to the application interface, security, and everything in between; there’s now I think a real desire and consensus, like, we can’t do this alone, which is largely what we’ve been talking about here. We need to bring the entire ecosystem together to reduce that fragmentation.

And then finally, and this was talked about earlier too, is the end user experience. If you’re not thinking about what the pain points or opportunities are, and like healthcare’s a great example, and you’re not thinking about how to design that in a way that reduces friction, that’s where the proof point comes in. That’s where the massive adoption starts to take place.

Kirkpatrick: Is that partly why we’ve sort of felt up to now that IOT was kind of overhyped? Because we just haven’t thought through that stuff and, I mean, we thought, oh Alexa’s IOT kind of thing, right? Or not?

Lucas: I think that we’ve been talking about a really big size of the prize for a really long time. And so people wanted their big share of that really big size of the prize. And I’m hoping increasingly that we’re going to have to—that people are recognizing that we’re going to have to reimagine the business models. And maybe people who have 25% of the current share are willing to take 10% of a 10x share because that’s actually better for everyone. So I think the business model innovation piece is going to be a big part of it.

Kirkpatrick: Business model—I’m sorry, we’ll get to you in a second, but business models for carriers for example, is that one segment you would apply that logic to?

Lucas: It has to be the whole ecosystem end to end. And so that’s the new model there, so how do you get the device, the security, the application people coming together to solve specific targeted pain points. And then have a value conversation. What’s the value that you’re unlocking? Are you unlocking new efficiencies in the operations of a plant? Are you unlocking new types of media and automotive? So these new business models at the edge are only going to be unlocked when the whole ecosystem comes together to unlock them.

Kirkpatrick: Interesting challenge. So Sean, how does that apply to healthcare? I mean, I know you’ve got a lot of thoughts on it.

Sean Mehra: I think the—well, first of all, let’s say that we’re talking about not just one technology but really a confluence of multiple technologies that need to work together to create use cases. So you know, on one hand you have 5G, which creates low latency high bandwidth network connections, but it’s in combination of Internet of Thing sensors, in combination with cloud computing, in combination with AI and machine learning and all of those things coming together to enable use cases like those in healthcare. And those use cases are transformative. So you know, 4G brought the advent of let’s say telemedicine. You could video chat with the doctor from your phone and that was fantastic. I think 5G will enable tele-surgery, because you need low latency and reliability to do something mission critical like have a robot perform surgery while your surgeon is far away. That’s amazing.

I think the biggest family of use cases are going to come around remote monitoring and predictive intervention, proactive care. So you know, as we populate our lives with sensors that are watching when we take our medication or tracking our heart rate throughout the day exactly, can they intervene without necessarily even requiring a doctor’s time to say, “Hey, something’s going wrong and we need to step in and give an alert.”

Kirkpatrick: The answer is yes, you think they will be able to.

Mehra: Absolutely.

Kirkpatrick: Yeah.

Mehra: And I think that’s going to happen in combination with machine learning because there’s going to be such a deluge of data coming in around patients 24/7, it’s impractical for any group of physicians to monitor and track it. So what you’ll have is AI gleaning insights from this massive amount of data being generated in healthcare and then teeing it off to physicians to then make a determination of the final diagnosis and treatment. But it’s really interesting what becomes possible in healthcare.

Kirkpatrick: Well, you know, this issue of collaboration and partnership has come up even more onstage today than I would have hoped, which is great. What Shannon was just saying about rethinking the business model is going to require some significant collaboration and partnership. Do you think the healthcare industry is ready for that and do you anticipate it actually happening?

Mehra: I think healthcare, in a lot of ways like financial services, is a little bit more complex. There’s trust, we heard that word mentioned multiple times in the previous session, is critical. There’s a lot of a conservative spirit to not making errors and going fast and breaking things. So I think there will be some healthy friction in the adoption of these new technologies. You can’t test it in production, as we just heard. So I think we will see a little bit of friction, but I think it’s inevitable.

The current state of the healthcare system is utterly broken so it can’t remain the way it is. So I think as we get into looking at patient data holistically, automating some aspects of physician’s jobs by intervening in patient’s lives, all of these will create efficiencies and an improvement in the quality of care that will be critical.

Kirkpatrick: I mean, and maybe I’ll ask Shannon also this, but how do you think about how this is going to transform healthcare in the United States and the highly developed countries versus the entire planet?

Lucas: Is that for me?

Kirkpatrick: No, I was actually asking him and I wanted you to comment, but do you have a thought on that?

Mehra: So the question is how do we see it kind of impacting—

Kirkpatrick: Yeah, how is it going to play out here versus, you know, Guatemala and, you know, Botswana?

Mehra: It’s a good question. I think when you think about developing nations, you have a fundamental problem of access. I mean, you have huge swaths of people that live in rural areas and those just are not the places where physicians are. So how do you connect people that need care to those who provide it when they’re not physically in the same place, and how do you keep them connected with data and communication tools so that they can get the care they deserve?

In the US, you know, we have a different access issue where there’s physicians around us but, you know, maybe there’s a lot of friction around the experience of scheduling and what not. But I think the way it’s going to play out in the US is going to be more about how do we make those physicians more efficient, so how do we augment them with AI to reduce the mundane, simple, repetitive things that they don’t need to do that a machine can handle so they can free up their time to handle more complex things.

Kirkpatrick: But from the standpoint, Shannon, of, you know, the sustainable development goals and having impact on, you know, many, many, many lives, this is basically a real opportunity, right?

Lucas: It’s a massive opportunity and it’s why I get up everyday. I mean, I’m a big believer that if you look at your magazine—you know, when I was in my early twenties I was like am I going to be a neo-Luddite or am I going to be a techno-evangelist? And I actually do come down on the techno-evangelist side because I look at the impact—I mean, if you look at how women’s lives have improved, I mean, over the last 100 years, you can make a direct correlation to how technology has played a role there. When you look in emerging economies, I spent a lot of time in Africa working for Vodafone, you can see material impact on the, you know, the improvement of GDP, for example. Every time a new g-wave comes out in technology, there’s a new economic bump in those areas.

And I think you hit on an important point which is, you know, it’s great from a techno-evangelist perspective to look at what 5G is going to unlock, but there’s a lot that we can do today using current technology to drive sustainable development goals. So IOT doesn’t always require 5G as an example, and there’s a lot of solutions that we just need to get scale on to do things like, you know, driving energy efficiency, looking at how we streamline supply chain. Which can also bleed over into healthcare, making sure that when the medicines get there that they haven’t been tampered with and they haven’t been—you know, they’ve been kept at the right temperature. Those solutions are there. We just need to go back to the business models of how do you make that accessible in all the different parts in the world.

Kirkpatrick: Right. And Ericsson does consciously think about the SDGs, right?

Lucas: Absolutely. We’re strongly committed to it. We’ve been working on reducing our own carbon footprint. Obviously Internet for all is something that’s near and dear to our heart, and that goes back to our founder’s principles about providing connectivity for everyone. He had a real vision for that.

Kirkpatrick: We even have a page in the magazine of ways that 5G can affect the SDGs, which is Ericsson data, so definitely take a look at that, where’s five different sustainable development goals that are—can be concretely altered and affected and improved upon by 5G and connectivity.

Maybe before we wrap, are there any comments or questions in—oh, is that your hand up, Michael? Okay, before the lights even come up, the intrepid Michael Miller has a question. He always has good questions, though. Can we get a mic? Or just start talking because the mic’s not there. Oh, it’s coming. Okay. Right over here. Thank you, Sean.

Miller: IOT obviously hasn’t moved up as fast as you had thought it would. I mean, Ericsson predicted 10 years ago that by 2020, which is just around the corner, there’d be 20 billion connected IOT devices, and I think the last time you updated it you said, well, about one of those 20 billion, so about one billion. Why has it been so slow to take off, and what makes this time different?

Kirkpatrick: Okay.

Lucas: So—

Kirkpatrick: Thanks.

Lucas: I think the frustration is palpable. I think everyone kind of overhyped how fast IOT adoption would happen. I think, you know, I kind of touched on that already, the fragmentation of the marketplace and everyone I think wanting to sort of hold on to their share of the pie and actually being afraid and unwilling to collaborate in a meaningful way. The end user experience is something that I think a lot of technologists are coming up with, you know, IOT-driven solutions but not thinking about what the actual implications are for the workers, you know, who are going to be interacting with that.

We actually just launched the IOT Studio in Silicon Valley where we’re co-creating with domain experts, bringing in industrials to co-create, but we’re also getting out of the building. We’re going to the factories in Batavia, Ohio as an example so that the people who are developing the technology can understand what the actual daily experience of the people who are ultimately going to be the end users of that so that we can create meaningful solutions for them. So I think, you know, we need to co-create. We need to focus on end user experience, and we need to bring in an ecosystem to, you know, create those end to end secure solutions.

Mehra: I’ll just add, I think it’s misleading to think that it hasn’t taken off because—I’m just speaking anecdotally here, but, you know, five years ago I’d be lucky if I had one or two devices connected to my Wi-Fi at home because of my phone or laptop. And today my vacuum and my thermostat and God knows how many sensors and Alexas are in my home. It is taking over, subtly and significantly.

Kirkpatrick: Oh. Well, thank you both for being here to talk about it. And I want it to take over, at least to improve healthcare, particularly globally, and help us get to those SDGs. So thank you both.

Lucas: Thank you.

Mehra: Thank you very much.

Kirkpatrick: Thank you.