2014
07.16

It has been a while since I checked Accenture Global Services Ltd. patent activity. To be honest, I was intrigued by the mention of them in the current cover story of Fortune, where the author, Allan Sloan, described them as a “never here” company for U.S. taxpaying purposes. It was not a flattering reference.

This week, the usually prolific company was awarded a modest four patents, two of which were related to Cloud processing. Of the remaining two, the one that was most intriguing is Patent 8,781,882 (“Automotive Industry High Performance Capability Assessment.”) A computer-based capabilities assessment tool, it intends to analyze, assess and report on “marketing leading” capabilities of automobile manufacturers. The motivation is to identify and exploit competitive advantage while exposing inefficiencies in a company’s processes.

Let’s keep in mind that Accenture is a consulting company, and such a tool gives it significant advantage when competing for engagements from the auto makers. Accenture, unique among its main competitors, is an aggressive patentee around processes that broadly cover major markets such as automotive, aerospace, city development and healthcare.

According to Patent Buddy, Accenture has, as of July 8th’s awards, been granted 1,014 patents.  Accenture is ranked 10 on the 2014 Vault  Consulting 50 list. Compare its award record with the nine companies ahead of it in the listing: McKinsey (none), Bain and Co. (none), The Boston Consulting Group (none), Booz and Co. (none), PwC (PricewaterhouseCoopers) with a total of 20 (!), Oliver Wyman (none), Deloitte Consulting (10), The Parthenon Group (none) and A.T. Kearney (none).

I have taken the time to go through the top 10 because it highlights patenting as a key differentiator for Accenture. In fact, some observers have pointed out its intent to become a software company. Another way to see this is by taking a glance at a recent snapshot of its patent applications, as of June of this year. It is all about processes and technology that can be deployed as software, either for its own use in its consulting services areas, or as applications that can be sold as traditional software.

As recently as Oct. 8, 2013, at Accenture’s Investor & Analyst Conference, held in New York, the senior general and technology management went into great detail around the theme of “Capturing New Waves of Growth”. Reading the transcript it becomes very clear that Accenture sees itself more of a solutions’ design and deployment business for its 40 practice areas (markets). Here is how Paul Daugherty, Accenture’s CTO, described the company’s identity:

“Well, the way I think about it is innovation is really at the core of who we are, of who Accenture is as a company, and it’s really the essence of the Accenture Way of how we operate in our culture. And as technology cycles increase, we talk about digital, we talk about SMAC, the industrial Internet – lots of things changing very fast. The way we innovate is very important, but innovation isn’t just my job or just any one person’s job or any one organization’s job at Accenture. Innovation is part of a lot of what we do and something that permeates a lot of our organization.” (pg. 22)

To my mind, Accenture’s orientation is more in line with GE, which staked a founder’s claim in the Industrial Internet Consortium. Interestingly enough, you will find Accenture in the member’s list. Only one of its top 10 consulting competitors, Deloitte, can be found among the movers and shakers creating the connected industrial infrastructure that will shape our world in the decade ahead.

You can bet that I will be paying closer attention to Accenture going forward.

2014
07.15

There has been a lot of discussion around crowdfunding. Even the mainstream media is talking about it a lot these days after some guy decided to ask for $10 just for kicks and ended up getting more than $50,000 to make potato salad.

Setting aside all the nonsense about potato salad, there is a real point to be made here: Crowdfunding potential is truly limitless. Even before the potato salad story had hit the news, I had been really digging into this whole crowdfunding scene. That’s why I had decided to dedicate the whole month of July on The Peggy Smedley Show, http://www.peggysmedleyshow.com/ to this very subject. My research so far has been truly fascinating as I have discovered organizations like Kickstarter and Indiegogo are leading the charge and are very influential in helping tech innovators bring their creative ideas to production or to market.

Let’s talk real numbers. According to Massolution’s 2013 crowdfunding industry report, donation and reward grew 85% to $1.4 billion between 2012 and 2013. During that same period, lending grew 111% to $1.2 billion and equity climbed 30% to $116 million. These are big numbers.

Using Kickstarter, Indiegogo, and others are giving people a chance to take their product to the people and letting them determine if a product or solution is truly worthy of being something useful.

People want to forgo the traditional route of knocking on doors and trying to land face-to-face meetings with potential investors.

So what exactly is crowdfunding any way? By definition, crowdfunding is the “The practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet.”

Any type of person or organization can go the route of crowdfunding. This can be a non-profit, charitable organization, start-up, artist, and musician, you name can bring a product, service, or idea.

As I said earlier, while many people have given up on the traditional way of seeking investors, crowdfunding really isn’t new. In fact, its roots can be traced as far back as 1713. Alexander Pope was looking to translate Homer’s Illiad from Greek into English, and set out to find people to support him. In exchange for their assistance, he offered acknowledgements in the book, a copy of the book, and a good feeling of helping out another person. Some 750 people stepped up helping Pope giving birth to the first real crowdfunding effort. Ironically, it’s only recently crowdfunding has come into its own and people are seeing its real value.

Let’s go back to the Massolution’s report again as it states $2.7 billion was raised by more than 1 million campaigns in 2012, which ironically was an 81% increase from the year before. Looking ahead that means the total amount raised could hit more than $5 billion when this firm completes its 2013 review.

What this tells me is the opportunities for crowdfunding are endless. We are only limited by our imagination, thus the making and raising of funds for potato salad truly a reality.

Want to tweet about this article? Use hashtags #Crowdfunding, #Kickstarter #Indiegogo #M2M #PeggySmedleyShow

2014
07.14

Great brands are built upon the foundation of good products that sustain their value over the long term. These products achieve an iconic status, crossing generational boundaries with their appeal. Coca Cola is such an iconic brand, recognized throughout the world. For years, it was number one on Interbrand’s Top 100 Listing of Best Global Brands, but slipped to number three in 2013, after Apple and Google.

Great brands also develop and deploy devices that help them position products with consumers, some of which may also take on iconic stature. In the case of Coca Cola, its vending machines have succeeded in capturing consumer attention through great designs that augment and compliment the appeal of the product they house and dispense.

Since 1929, the development of Coca Cola vending machines to deploy products broadly in a manner that satisfies the immediate need of a consumer, to conveniently buy chilled refreshments, has been ongoing. Innovations have paralleled advancements in electro-mechanical technology, and have recently incorporated networked digital capabilities that have opened new opportunities to offer non-traditional products. These additional new revenue sources have expanded the value of vending machines. They have also turned the traditional “dumb, unconnected” device into a “smart, connected” device. It now sits firmly in the ecosystem of the Internet of Things. It is also a major player in the Internet of Soda.

(For a wonderful and quick pictorial tour of the evolution of the Coca Cola vending machine, click here and click through the photo set.)

The evolution of the device in conjunction with customer engagement experiments continues and can take on very intriguing forms. For this past Valentine’s Day, a virtual vending machine was created that would only appear when couples passed it. Here is the video. This is an example of the merger of point of sales entertainment and functionality that lends itself to social media exploitation.

Coca Cola vending machines have become ubiquitous. They, and competitors’ machines, are seemingly positioned everywhere, but in reality, their placement is contingent upon certain infrastructure requirements that enable the networked digital capabilities to function.

On an historical note, there is a story that places the origins of The Internet of Things to the efforts of some frustrated, thirsty computer students at Carnegie-Mellon University wanting to know the inventory level of their local Coke machine. In 1982, they wired up the Coke vending machine with microswitches to report on levels in the racks in the machine.

What are some of these capabilities? Let’s see what Coca Cola says. Coke has a B2B (business-to-business) segment, called CokeSolutions, which positions and deploys vending as a managed services opportunity. The business value that smart, connected vending machines can deliver are tied to interoperability with other smart devices that consumers use, such as their smart phones used as mobile wallets.

Coca-Cola has taken a strong infrastructure position with its latest smart machine, reportedly acquiring 16 million unique network IDs to use with its Freestyle vending machines as they deploy. A network ID for each machine is essential for network connectivity, giving each machine the ability to be identified in space (location) and time. Machine stock levels that automatically trigger replenishment orders, delivering third-party value offers to mobile wallets, and realtime test marketing are just some of the intended capabilities of networked vending machines.

Few consumers know that Coca-Cola positions it machines in quick-serve merchant venues, such as Burger King. Consider this a managed services business opportunity for Coke.

As I have written before, American brands including Coca-Cola and McDonalds have used Japan as a learning laboratory for the advancement of digital capabilities in its operations. In the case of Coke, it presently is experimenting with gamification to allow customers to bond more closely with hundreds of thousands of its vending machines.

Another ongoing experiment is the “peak shift” energy conservation vending machine which when more broadly applied in other countries will have an impact on smart city initiatives.

As early as 2005, in Japan, one could download ring tones from a Coke vending machine to a cellphone.

The most important development has been to synchronize the vending machine with the mobile wallet in the consumer’s smart phone. Coke machines in Japan had this capability since the early 2000s, built upon Sony’s contactless transaction chip, FeliCa. FeliCa was the dominant contactless format in Japan for the first decade of the 21st century.

In the U.S., the first significant deployment of contactless payment-enabled Coke vending machines was announced in 2006, based on MasterCard’s PayPass technology. This first effort was focused on taking a contactless payment for a Coke product in the vending machine.

Efforts to take advantage of contactless technology’s capabilities have broadened, with Coke’s “My Coke Rewards” becoming a digital part of the mobile wallet in smart phones equipped with a NFC-chip (Near Field Communication). A good example of this is the ISIS trial announced last year for deployment of its mobile wallet service in Austin, TX and Salt Lake City, UT. Coke has apparently benefited from this trial:

“Coca-Cola’s vending machines are among them. More than one-third of active Isis Mobile Wallet users in Austin have reportedly loaded a My Coke Rewards card into their wallet since the pilot began and 90% of them are new to the My Coke Rewards program.”

ISIS was formed by three of the four top wireless communications companies in the U.S. to promote smart phone payment services.

I have grown up with the Coca-Cola vending machine, from its days as a dumb, unconnected device to today’s smart, connected “Happiness Machine.” What I have witnesses is the transition of a simple device designed to keep a Coke product cold at the point of purchase to an entertainment engine that enhances the brand experience and delivers value offers—Coke’s and other merchants’—seamlessly to the consumer’s mobile wallet. It can do on the spot market testing, and self-manage inventory replenishment. It can sell and deliver non-beverage products to me.

And, yes, it still delivers a cold Diet Coke for me to enjoy on a hot summer’s day.

Want to tweet about this article? Use hashtags #CocaCola, #Coke, #Freestyle, #ISIS, #M2M #Vending #NFC, #IoT #CokeSolutions, #smartmachines 

2014
07.09

Recently, I added Spansion Inc. to my patent “watch list” because of some interesting news about the company. It also received four patent grants today. Let’s start with the interesting news. On July 3, it was announced Spansion had joined the ZigBee Alliance, noting this would position the company firmly in the build out of infrastructure of the IoT (Internet of Things).

ZigBee was formed about in 2002 as a standards setting group, defining open standards for wireless sensor networks. ZigBee’s approach was to develop low-cost, low-energy sensor standards that would allow information from a source sensor to be passed “cooperatively” to the closest sensor, then on to the next one on the path, continuing the along the trail of sensors to the last stop, usually a collection node that was linked by the Internet to a monitoring device. Another way to describe this process is mesh networking. It offered the promise of having sensors that were cheap to deploy and useful in extending the reach of remote-device monitoring deeper into buildings and other dense structures.

Back in the early 2000’s this was a very big deal for companies that offered remote monitoring and managed services. Getting to devices deep within structures that were “masked” from typical wireless systems required hardwiring them, a significant expense to the customer that in most cases caused the customer to balk. Many devices went unmonitored. Mesh networks could bring the cost of coverage of these devices down significantly, while concurrently setting up the infrastructure to monitor other devices that could be deployed in other use cases. ZigBee’s founding members were leaders in promoting this approach. Today, the ZigBee alliance has more than a hundred members, many which design and manufacture the sensors and their components, including the controller chips. This is where Spansion is positioned.

The four new patents granted to Spansion are:  8772953 (“Semiconductor device and programming method”) , 8773885 (“Semiconductor memory device featuring selective data storage in a stacked memory cell structure”) ,8774400 (“Method for protecting data against differential fault analysis involved in rivest, shamir, and adleman cryptography using the Chinese remainder theorem,”) and 8775853 (“Device and method for preventing lost synchronization”).

Let’s circle back to the ZigBee Alliance. Of the top 11 companies in the highest membership category (Promoter), you will find Kroger. Let’s pause to think about this. Kroger is a very large food and multi-merchandise retailer. Yet it is part of a wireless mesh networking standards body at the highest level of membership, sitting on the Alliance’s Board of Directors. Why would it do this? Kroger’s position as a ZigBee Board member provides it an opportunity to approve projects that will enhance the retail experience through deployable mesh networks. They have the ability to be first user in a learning lab, which if successful, gives them significant competitive advantage.

ZigBee is about infrastructure development, while Kroger is all about front line customer engagement using that infrastructure. The Internet of Things, and now, the Internet of Everything, has generated a significant business opportunity, which by all accounts, is in the billions of dollars. Consumers are using the “things” for “everything”, and for retailers, control of this newly emerging “smart” customer experience is paramount.

In April of 2014, Kroger joined with eInfochips to roll out a Retail Site Intelligence capability that is deployed over ZigBee mesh networks. Take a look at pages 8-11 of this 2012 presentation. You’ll get a very clear understanding of the synergy between Kroger and ZigBee as they envisioned and created the “store of the future” environment, and now begin to massively deploy it throughout the brick and mortar venues of a major retailer.

The point of all of this is that companies have always sought out alliances that would bring in new revenue opportunities. In this sense, Kroger’s active membership in the ZigBee Alliance is a continuation of traditional business practice. What is new is the positioning joining together of infrastructure developer with a premier infrastructure user to create the new customer engagement model for the Internet of Everything. Expect to see more of this in the newer alliances, such as the Allseen Alliance.

2014
07.03

Every time I explain to someone that our world is connected I can’t help but make the analogy to the 1987 movie Planes, Trains, and Automobiles starring the late comedian John Candy. However, in our world we are connecting cars, homes, and everything.

Think about it. The race is on between Apple and Google for sure. Already we’ve written about Apple’s move into the connected car market with its CarPlay letting users connect their iPhones through its iOS and a Lightning cable with the help of Siri all while keeping the driver’s eyes on the road. Now it’s Google’s turn with Google Auto and a MicroUSB and Google voice search.

As an observer it’s really fascinating. Personally, I can’t help but like Google. This is a company that has its fingers in everything. At first it was talking searches, then platforms, then homes, wear, and now it’s cars. It wants to connect it all. We’ve been saying it for the past several years your mobile world will be completely connected and you will have a central hub that will be automatic and seamless.

So it was no surprise to anyone at Google’s I/O developer conference that the company announced Android Auto, which promises to extend the Android platform into our next car. We have been wondering when it was going to happen since we have been talking about an autonomous car now for far too long. Google wants to be, and is proving to be, a leader at all facets of the connected lifestyle.

While not much information is available just yet, but I can say this, Google is truly proposing what appears to be yet another step forward in making connectivity a ubiquitous feature in new cars. The Android Auto solution will offer an intuitive interface allowing drivers to interact with the data. The company says drivers will be less distracted. Personally, less distraction is music to my ears. Now I’m struggling with this since Google is the company behind the Google Glass, but I will be open minded and wait a little longer. But candidly, I have some serious doubts. Why you might ask?

The company says, whether it’s navigating using Google Maps, getting traffic updates along an intended route, or selecting the right playlist from our smartphones, Android Auto will connect user’s to an Android phone to his or her car, opening up new ways to control content and services through integrated steering wheel controls and voice commands.

The goal is to put the information consumers want and need at their fingertips. And while that all sounds good on face value—helping motorists keep their hands on the wheels and eyes on the road—which ultimately reduces the temptation to fiddle with a cellphone driving; I’m not 100% sure this will do the trick, since a distraction is a distraction—it all depends how much access Google will be providing to Android users at their fingertips. This little factoid still remains to be seen. Google says Android Auto will begin to appear in cars later this year.

The only question left to answer is who will own the road more: Google Auto or Apple CarPlay. The race is now on.

Want to tweet about this article? Use hashtags #Android #Google #connectedcar #io14 #M2M #distracteddriving  #Apple #CarPlay #auto

2014
06.25

Anytime a vendor finds a way to keep me out of a doctor’s office or away from the emergency room all while keeping my costs down, I’m going to blog about it. And that’s what Verizon Enterprise Solutions, http://www.verizonenterprise.com/, unveiled today with the introduction of a new mobile-health solution aimed to provide a convenient, cost-effective way for clinicians to remotely see and assess patients via smartphone, tablet, or computer. Coined Verizon Virtual Visits, the app uses video to connect patients suffering from acute conditions such as colds, sore throats, or the flu with healthcare clinicians and other professionals.

Let’s face facts, healthcare costs have reached a record high and solutions that offer alternative ways to help patients connect with physicians at a reduced rate is certainly going to be embraced by consumers and medical professionals. Research shows $4.4 billion is spent annually on emergency visits for non-urgent routine care and another $151 billion is spent on emergency room visits.

Couple this with the increasing shortage of primary care physicians and consumers are being forced to bear a greater financial burden than ever before. I couldn’t believe it when Verizon revealed that 62 million people don’t have a connection to primary care doctors. That’s just scary. When you think about it, this app can make the difference of millions of dollars of an unproductive workforce.

Christine Izui, Verizon’s quality officer for mobile health solutions, says Verizon Virtual Visits is really for the “working well.”  More specifically, she says if I’m really feeling crappy and I don’t want to really wait in a doctor’s office this is the app for me.

She explains it like this, “(Imagine) you’re just feeling horrible and you decide that you really want to see a doctor (but) you’re swamped. You’re working all day today and you just cannot get out of the office and this is your second or third day of feeling horrible…. What am I going to do?’ With Verizon Virtual Visits ….connect with a doctor on a phone or a tablet or a PC.”

Here’s how it works. Verizon Virtual Visits typically takes place through a secure app downloaded to my connected device. There, I can simply log in, answer a set of questions, and then discuss my symptoms and options for treatment with a clinician. If applicable, the healthcare professional can use the platform to send a prescription to the pharmacy closest to my current location. The system has been even set up to facilitate the acceptance of a medical co-pay. The best news of all is that I don’t have to go to an urgent care. In the end, perhaps the app will reduce some overall burdens on these medical locations giving them more time to care for patients remotely.

By leveraging the latest encryption technologies and the company’s HIPAA (Health Insurance Portability and Accountability Act), Verizon says its solution is an enterprise-class platform for health systems, health plans, and employers to “meet the needs of their specific patient or member population base.” Employers benefit by keeping their employees healthier.

She says, “(Imagine) you’re just feeling horrible and you decide that you really want to see a doctor (but) you’re swamped. You’re working all day today and you just cannot get out of the office and this is your second or third day of feeling horrible. You think, ‘all right, I don’t have time to go sit in the waiting room; I don’t want to go to an emergency room. What am I going to do?’ With Verizon Virtual Visits, what you do is you actually connect with a doctor on your phone or a tablet or a PC.”

The Verizon Virtual Visits is meant for an episodic condition, so this isn’t to treat congestive heart failure or diabetes or something where a patient might have an ongoing prescription. It’s really meant for an incident, such as a flu, upper respiratory infection, or for taking a short-term drug. 

Verizon’s ultimate goal with its latest mobile-health offering is to help pave the way for a more efficient healthcare system in the United States. By leveraging the latest encryption technologies and the company’s HIPAA (Health Insurance Portability and Accountability Act)-enabled cloud, Verizon Virtual Visits offers a new way for employers, employees, and healthcare providers to work together to get sick people in front of those who can help get them well.

I think Rich Black Verizon’s vice president, healthcare practice says it best when he acknowledged there is a shift in how care is delivered in the U.S. As a result Verizon wants to be at the forefront of not only delivering a solution, but one that is secure and reliable. Security will continue to play an ever-increasing role and it’s great to see Verizon leading the charge in providing healthcare solutions to consumers.

Want to tweet about this article? Use hashtags #M2M #Verizon #healthcare #mhealth

2014
06.23

There seems never to be a dull moment when it comes to patents. Depending on how you look at them, they can be milestones along the road of continuing innovation, or canaries in mines signaling the presence of unseen toxic conditions that will kill off innovative effort. That defenders of both views exist, even prosper, today is not surprising, since the popular sentiment, at least in the U.S., is that innovation, and the new devices and services they bring, is roaring ahead at a pace that is unsettling to most of us. It is a matter of faith that Innovation, particularly reflected in the week after week awarding of new patents, continues upward at a level of significant impact to our lives, but there appears to be a shift in perception about the benefits. This shift is being represented by the increasing use of the word “disruptive” to describe the impact of innovation.

Then there is the zone of urban legend surrounding patents and innovation. I admit to having been lazy when it came to the acceptance of the received wisdom of the masses in the popular story of the Commissioner of Patents who, in 1900, resigned, stating that there was no new things to invent. Whatever else you may think about the Internet, it is a means to allow people like me to validate or invalidate such urban legends from the comfort of my home, to understand the real reason why some saying was associated with an event, a person or an institution.

The Commissioner of Patents in question was Charles Duell. There is a considerable body of research that has built up around the veracity of his statement, especially his reason for resigning the position. As with so much of urban legend, his name was linked to the comment in error. One researcher found a post in the July 30, 1900 edition of The New York Times offering a more practical reason for Duell’s resignation:

“Mr. Duell’s purpose in resigning is said to be that he may be able to devote his entire time to his patent business. The salary of the Commissioner of Patents is $5,000 a year, but Mr. Duell’s patent practice, when he is able to give it his entire attention, is understood to be considerably above that figure, so that there is no financial consideration which would warrant him in retaining the office.”

Money “talked” as loudly then as it does now, it would seem.

The greatest surprise that I encountered as I researched the apocryphal quote was that his actual view of innovation was completely misrepresented. After leaving the post of Commissioner of Patents, he was quoted in a 1902 edition of The Friend, offering this view of the future of innovation as it would be reflected in the grant of patent awards in the years to come:

“In my opinion, all previous advances in the various lines of invention will appear totally insignificant when compared with those which the present century will witness. I almost wish that I might live my life over again to see the wonders which are at the threshold.”

Here is a man of positive vision about the future of innovation, not the naysayer that he has been made out to be. However, his words, viewed from our present time, represent a dichotomy. Of course, the “present century” to which he was referring was the 20th century, of which much of the evidence supporting the decline of U.S. innovation in the 21st century is cited by one of the two professors featured in a recent front page story in the Wall Street Journal. Yet, his positive vision of a future of significant innovation supports the position of the other professor, hence the dichotomy.

Published on June 16th, the article was entitled, “Has All the Important Stuff Already Been Invented?”  It centered on two Northwestern University professors and their continuing debate over the state of innovation in the U.S. Professor Robert Gordon articulated the position that innovation in the 21st century, particularly in the U.S., was in trouble because what is being invented – and patented – is nothing more than enhancements to the life-changing innovations patented in the 20th century. Examples that he cites are cell phones as a refinement of the telephone, and today’s home kitchen being a refinement of the one you found in 1955.

His opponent in the debate, Professor Joel Mokyr, sees a “coming age of new inventions” that will equal the impact of those in the 20th century, citing genetic therapies and bio-engineered seeds that can feed the world without the need for fertilizers.

This debate is between two economists, and that is significant, because as the article states, it is a matter of economic orthodoxy in the U.S. that growth is driven by new technology. Citing Nobel economist Robert Solow as the originator of the concept, economic growth became tied to innovative progress, with the resulting impact on stock market behavior.

Equally important to the prevailing economic orthodoxy is Joseph Schumpeter’s concept of “creative destruction” that comes from the displacement of old technologies and their businesses by newly innovative technologies and their emerging businesses.

I spoke above about the shift in perception of the benefits of innovation from positive to disruptive. “Disruptive” is the mantra for technology CEO’s and their critics, displacing all other descriptions of technology innovation. Good luck finding investors if your product is not “disruptive”!

In a brilliant essay by Jill Lapore in the June 23rd issue of The New Yorker, entitled “The Disruption Machine,” this shift is not only explored in detail, but the author brings to light the flaws in the primary literature that gave rise to the notion of innovation as disruptive. In fact the subtitle of the article is “What the Gospel of Innovation Gets Wrong.” She deconstructs one of the most influential sources of the argument, The Innovator’s Dilemma, and in the process reveals that the case studies used to support the argument were flawed. Her contention is that “Disruptive innovation is a theory about why businesses fail. It’s not more than that. It doesn’t explain change. It is an artifact of history, an idea, forged in time…It makes a very poor prophet.”

As I said before, people tend to accept the received wisdom of the masses because it is convenient and there is safety in numbers. Current beliefs in the nature and direction of innovation fall victim to this tendency. They will change as economic geopolitical conditions change. The shape and significance of innovation will remain the subject of intense debate.

However, one thing can be said with certainty: Patents will be awarded in great quantity on every Tuesday of the year.

2014
06.11

This wearable market is really exciting. I think the network providers, chipset makers, and even the customer-relations application providers see the opportunities abound. Smartglasses, health and fitness devices, and smartwatches will most likely be the primary form-factors purchased by the enterprises and used by employees and consumers alike. We are already seeing massive adoption in industries and businesses from hospitality, travel, healthcare, sports, and even fitness that have discovered unique and innovative ways for adopting these solutions.

But this is only the beginning as more and more developers connect people to business as we have seen with the latest news with Salesforce.com jumping into the fray with Salesforce Wear, a new software kit for developers.

If Salesforce can enter the game, the possibilities are endless as I have already stated for smartwatches, glasses, healthcare gadgets, you name it. We are already seeing great partnerships in the wearable market with companies like Google Glass in hospitality and travel, along with the app from Destinia, http://www.destinia.com/ and Salesforce with partners and products, with the Pebble, http://www.getpebble.com/, smartwatch, Samsung Gear, http://www.samsung.com/, smartwatch; and Google Glass, http://www.google.com/; Android Wear, Myo, http://www.thalmic.com/, armband; Bionym’s, http://www.bionym.com/, band.

Healthcare is growing at unprecedented levels and health professionals need to stay educated about all the latest technological innovations. We will continue to see impressive products come to market from monitoring devices that can be worn by cardiac patients outside of a hospital preventing emergency visits and readmissions. Developers are even creating new solutions to extend a patient’s home recovery and preventing hospitalizations in the first place. 

How will these wearables fit in and do they really have a place in your health and fitness?

But what’s next and who is else be will leading the market? That is exactly why Aeris Communications, http://www.aeris.com/, and Connected World magazine will be addressing wearables for the healthcare industry and where we see the greatest short-term adoption.

On Wednesday, June 25 we will be doing a Webinar called Eye, Wrist, Body … Where is the Wearables Market Headed?  Click here to learn more and to register.

Wearables are clearly the next big discussion in the connected market. For that reason we invite you to be part of the discussion. If Google has its way wearables will go from being geeky and freaky to more than just a fad to being a part of our everyday lifestyle. So join the conversation and find out where this technology will fit into your rapidly changing world.

Want to tweet about this article? Use hashtags #wearable #connecteddevice #M2M #Google, #Aeris

2014
06.06

Inspiration for this week’s report came from an unusual source: My neighbor. We were chatting over the fence on Tuesday, and he mentioned how much he did not like his new credit card. His bank had sent him a replacement card that required holding the card in the reader while having to enter his PIN number. He knew that I had a background in the subject and wanted to know why the old format was going away. I explained that reducing credit-card fraud was the primary reason.

To most of the rest of the world, especially Europe, the “chip and PIN” card format was adopted years ago to significantly reduce the level of credit card fraud. Finally, U.S. credit-card issuers have been given a deadline of October in 2015 to convert to the new format or face serious penalties.

I explained to my neighbor that the reason why he had to keep the credit card in the card reader was to allow continuous contact between the chip on the card and a contact point in the reader. When my neighbor keyed in his PIN number, it was validated against the information on the card’s chip, allowing the transaction to be completed. If the chip and reader were not in contact when the PIN was entered, the transaction would be invalidated.

It was fortuitous, then, that in this week’s grant of patents, I came across one that signals the intention of device makers to meet the need to accept the chip and PIN format in POS (point-of-sale) payment transaction devices.

Square, Inc., Jack Dorsey’s company that produces the plug-in credit card magnetic stripe swiping device for smartphones and tablets, allowing anyone to become a merchant in less than ten minutes, was granted Patent  8,740,072 (“Contact array in a card reader.”) This patent covers changes in the plug-in device that will accommodate the chip and PIN format. Its customers, the individual contractor and small merchant, such as the kiosk-based vendors you will find in shopping malls, can now be ready for the conversion to the chip and PIN format.

When Square introduced its plug-in device to allow a smartphone or tablet to act as a POS device to take a credit card transaction, it made sure that the registration process to enable the device and start taking payments was easy, fast and in compliance with regulations. Square’s approach was revolutionary, because individuals and highly mobile small merchants could not readily qualify with the traditional transaction intermediaries that required credit checks and charged high transaction fees.

You might be wondering whether the chip and PIN format is already obsolete because NFC (Near Field Communication) contactless transaction processing technology is coming into the market in smartphones. Contactless is faster than the chip and PIN contact process, and a contactless transaction can run over the same transaction processing networks as the chip and PIN transaction. So why bother with the chip and PIN format at all?

A part of the answer can be found in Patent 8,740,073 (“Methods, systems and computer readable media for storing and redeeming electronic certificates using a wireless smart card”) granted to MasterCard International Incorporated.

The filing date of the application that resulted in this patent grant was in April of 2008, a time when the world was starting to slide into a massive recession. Prior to the start of the recession, a major barrier to the deployment in the U.S. of NFC (and for that matter, the chip and PIN contact-based format) in plastic cards and early versions of smartphones was the availability in quantity of POS devices that would accept contactless transaction. Device manufacturers were for the most part reluctant to bear the cost of device development without the deployment in quantity of NFC chips in the smartphones in particular. It was the classic “chicken or egg” controversy. The recession effectively put the argument on hold because investment in costly new payment technologies such as NFC stalled.

But, payment transactions were but one dimension of NFC capabilities. NFC was successfully deployed in Japan, for example, in loyalty cards which could receive, store and then use electronic coupons. With the recession in progress, and in consideration of the high price point of an NFC chip compared to other chips, an alternative was envisioned that if deployed could jump-start contactless coupon transactions at a lower price point, which in turn would acclimate consumers the benefits of higher cost NFC payment transactions and convince device makers to invest in the building out of NFC-capable POS infrastructure.

This was the justification spelled out in the patent. I urge you to read the Background section of the patent as it states the case clearly and concisely; it is a time capsule capturing the issues at the time of the filing, and very much a mirror of industry conditions.

What is really compelling about the patent and what it represents are who its authors are. While the patent is assigned to MasterCard, two of the authors, Roshan Vijayshankar and Ming-Li Liu, are also associated with a prior patent application, 20090164322, filed in June  of 2009 (“METHODS, SYSTEMS, AND COMPUTER READABLE MEDIA FOR OTA (OVER THE AIR) PROVISIONING OF SOFT CARDS ON DEVICES WITH WIRELESS COMMUNICATIONS CAPABILITIES.”) They were joined in this application by Mohammad Khan.

Khan was the CEO of one of the leading producers of POS devices for credit cards, and an early adopter of NFC capability for POS. His company, Vivotech, based in Silicon Valley, was sold to Sequent in 2012.

My point is that conditions for NFC adoption were so challenging in the 2008 and 2009 time period that people who were involved with its development had to consider alternative strategies to stay in business and otherwise incent consumers to want contactless formats like NFC.

With the recession over, and NFC reemerging as a contender in the payment transaction industry, one has to wonder if MasterCard will ever deploy the alternative for which it has just received a patent.

As I have said before, patents are the time capsules that capture crucial moments in the timeline of the history of technology.

Leave it to those wild and crazy inventors at Amazon Technologies Inc. to think up a solution to a problem plaguing the truly connected people of the world. Patent 8,743,051 (“Mirror detection-based device functionality”) describes the invention of “an electronic device that automatically reverses a left-right orientation of content displayed by the device when detecting that a user is viewing content of the device via a mirror.”

We all know that Leonardo da Vinci used the “mirror writing” technique to encode his writings in his famous notebooks as a means to prevent his secrets from being stolen. Industrial espionage was as intense in the Renaissance as it is today.

But what compelling use case would drive the Amazon team to undertake the effort to go through the patent process for a device makes images in a mirror readable? Here’s the justification from the Background section of the patent:

“People are increasingly utilizing portable electronic devices for a number and variety of tasks, including reading articles, watching the news, communicating with others, looking at photos, and conducting meetings. In order to save time, people often perform various other tasks while reading or watching content displayed by the electronic devices. For instance, a user may use one hand to hold a cellphone in watching the news while using the other hand to shave or brush his or her teeth as the user is getting ready for work. However, not only does this prevent the user from having an extra hand in getting ready, the user may easily get toothpaste or shaving cream on the device.”

Considering the high cost of our connected devices, “kudos” should be given to Amazon for finding a way to let us enjoy them without messing them up. Although, next time, please don’t make it so obvious that it’s more of a guy thing to watch stuff while shaving.

2014
06.02

Most people take for granted the things they want to buy will be on a shelf in a store waiting for them. Or, they will appear on their doorstep within a day or two after clicking the “Complete Purchase” button in the online store. With the push by Amazon.com and others to deliver orders on the day they are purchased, expectations that products will be available when and where someone wants them to be have been ratcheted up significantly.

For the rapid fulfillment model to work, the supply chain must function at a level of productivity, accuracy and capacity that pushes the boundaries of the current capabilities of the people, information systems and physical infrastructure of one of the most critical links in that chain – the warehouse or distribution center—to the breaking point.

What few people realize is that the DC, otherwise known as the distribution center, into which finished goods are received, stocked, processed, and shipped to fulfill a customer’s order has traditionally been the last part of the business to receive funding for improvements to operational efficiency. This is changing, and companies such as Amazon.com have been pushing innovations in its DCs at a torrid pace. I’ve written about a number of patents Amazon has been awarded in the previous six months alone, and about their aggressive use of robotics to replace humans in various work processes such as order selection.

The B2C (business-to-consumer) DC is the one favored by the media when telling stories about how what you want gets to you when and where you want it (or not, as was made all too painfully obvious last Christmas season).

What consumers (you and I) have come to expect for our personal fulfillment requirements, businesses also demand an ever-increasing level of service from the companies that provide a mind-numbing range of products, parts and raw materials used in the production of other products that go to consumers and other businesses. Supply-chain professionals no longer think in isolation about the efficiency of their supply chain; today, supply chains overlap, merge and comingle, forcing an appreciation that if one part of the chain fails, more than one company may be at risk of losing business.

As I’ve said, investments in new technologies in DCs to make them more efficient and to keep up with the demand for rapid fulfillment are increasing as business leaders realize that game changers such as Amazon have created a massive gap that will diminish their customer base. Some of the technologies being adopted, that are generally associated with entirely different industries, can surprise you.

Here’s a case in point. Every day, in every country on the planet, companies that make things like cars, paper clips, smartphones and smart toilets, consume a myriad of parts that are lumped together under the general description of “MRO,” or maintenance, repair, and operations. There are literally tens of millions of individual items, known as SKUs (stock keeping units) associated with the parts, components, oils and lubricants, and tools used to keep manufacturing up and running to meet demand.

One of the best known names in the business of stocking and shipping MRO SKUs to manufacturing and other companies that have MRO requirements is W.W. Grainger. Started in the Chicago area in 1927 and still based there, today it offers over 1.2 million SKUs, and has created value-added services such as holding dedicated inventory in the role as a customer’s “MRO Stockroom.” It has 33 regional distribution centers where it stocks the SKUs for the rapid fulfillment of customer requirements.

This week, Grainger was granted Patent 8,738,474 (“System and method for managing product inventory,”) which is not surprising. What is surprising is that the technology employed to be able to improve the replenishment of the bins from which selectors pick products to fulfill a customer order is NFC (near field communication). 

We usually think of NFC as a payment processing technology. A credit card or, increasingly, a smartphone has an NFC chip which can store value and information, and which can interact with other smart devices to give and receive value and information. While written about in the media as the next best thing in payments processing, this activity can be more basically defined as transaction processing.

With NFC tags embedded in the inventory bins on the shelves in the distribution centers, and a reader device in close proximity to clusters of bins, the ability to “read” the stock position of any given bin can be automated and updated in real time, eliminating the need for a person to do physical inventory counts (expensive, time consuming and prone to human error), while concurrently improving the odds that the bin will never be without inventory. When a “short” is encountered in the selection process, there are costs and time delays incurred until the stock is replenished. These two issues are what the patented process seeks to overcome.

This is a very big concern for Grainger. Imagine the costs when you have more than a million SKUs to replenish, not to mention customer dissatisfaction when an unanticipated stock-out means that the customer does not get what he wanted the next day.

The essence of the process in the patent is to tag the bin, which has two storage wells divided by a partition, with an NFC device so that when the selector, running out of stock on the side facing him, turns the bin around to dip into the “safety stock,” triggers a position change notice that in turn generates a replenishment assignment to restock the empty side of the bin. The turnaround of the bin on the shelf is read as a “transaction.”  A simple and elegant solution, and on Grainger’s scale of operations, a significant improvement in supply chain efficiency, inventory cost reduction, and customer satisfaction. The benefit to Grainger can be considered to be, year over year, in the millions of dollars.

Customer satisfaction is really the same thing as brand image protection, which in today’s world of immediate fulfillment, is more important than ever before.

There is so much process change going on in DCs today, using new technologies and the smart devices that allow them to function, that one can think of it as a revolution. With Amazon and other supply chain management innovators making quantum – not incremental—leaps forward in operational efficiencies, the rest of the world can no longer proceed at the snail’s pace of evolutionary—or incremental –improvements. You either join with Amazon of the ramparts fight, or your business dies. The revolution takes no prisoners.