1hank you very much for lnvlung me here Loday.

l'm very auered Lo be here Loday,

so Lhank you very much Alfred. 1oday l wanL Lo Lalk abouL Lwo maln concepLs, whlch
challenge Lhe vlslon LhaL consumer elecLronlcs has creaLed, where we buy producLs
because of whaL Lhe producL does for us and Lhe value LhaL you experlence ls ln Lhe
Lhlng you can hold ln your hand. l Lhlnk LhaL's perspecuve geLs us slmpllsuc gadgeLs,
buL llule acLual lnnovauon or markeL success, and LhaL Lhe Lrue changes come from
looklng aL Lhe ecosysLem of devlces, servlces and buslness models. l'll Lhen wrap up
by Lalklng abouL where l see some opporLunlues ln Lhls space LhaL l Lhlnk aren'L
gemng enough auenuon.
1
Let me begin by telling you a bit about my background. Im a user experience
designer. I was one of the first professional Web designers. This year I am celebrating
professionally designing Web sites for 20 years. This is the navigation for a hot sauce
shopping site I designed in the spring of 1994.
2
l've also worked on Lhe user experlence deslgn of a loL of consumer elecLronlcs
producLs from companles you've probably heard of.
3
l've wrluen a couple of books based on my experlence as a deslgner. Cne ls a
cookbook of user research meLhods, and Lhe second descrlbes whaL l Lhlnk are some
of Lhe core concerns when deslgnlng neLworked compuLauonal devlces.
4
l also sLarLed a couple of companles. 1he rsL, Adapuve aLh, was prlmarlly focused
on Lhe web, and wlLh Lhe second one, 1hlngM, l goL deep lnLo developlng hardware.
3
l'm noL really lnvolved ln 1hlngM anymore, buL leL me plug Lhelr laLesL producL. lL's
bllnk(1), Lhe world's besL uS8 lndlcaLor llghL. CompleLely open source hardware and
soware. Llbrarles for every plauorm LhaL has a uS8 porL and lL connecLs Lo ll111.
6
l also sLarLed and run Lhe annual SkeLchlng ln Pardware, an annual summlL on
physlcal compuung Lools. lorLy of Lhe smarLesL deslgners, developers, researchers,
arusLs and educaLors l know geL LogeLher for Lhree days Lo Lalk abouL Lools LhaL make
lL easler Lo develop hardware producLs, responslve envlronmenLs and dlglLal arL. 1hls
ls from Lhls years' whlch was ln 8erlln Lhree weeks ago. ?ou can read abouL lL ln a
posL l wroLe for MAkL Lhls week and you should check ouL Lhe pasL presenLauons.
1here are fanLasuc, oen compleLely open Lools, such as neLLab1oolklL and
spacebrew LhaL make lL much easler Lo explore whaL hardware can do.
7
1oday l work for A8C, Lhe famous research lab, as a prlnclpal ln lLs lnnovauon
Servlces group, whlch ls A8C's consulung arm. We use user experlence deslgn,
eLhnographlc research, buslness sLraLegy, lnnovauon poruollo managemenL, and
execuuve Lralnlng Lo help companles reduce Lhe rlsk of adopung novel Lechnologles
and lncrease Lhelr chances of compeuuve success.
8
A8C ls also where Marc Welser predlcLed all of Lhls ln Lhe laLe 1980s. l never knew
hlm and he dled ln 1999, buL l wlsh he was around Loday Lo glve hls LhoughLs abouL
whaL's golng on Loday. 8uL remember hls name. Much of whaL he had Lo say abouL
Lhe embeddlng of lnLelllgence lnLo everyday ob[ecLs ls sull compleLely relevanL. So lf
you haven'L read hls work, please look hlm up, Loo. Pere's a graph LhaL he drew 18
years ago. 1he green llne shows hls predlcuon of Lhe rlse of more Lhan one compuLer
per person. Look famlllar?
9
1he rsL Lhlng l wanL Lo Lalk abouL ls Lhe value of hardware.
10
I think the core value of hardware today is how it can bring online services into the
physical world. Let me show you a couple of trends, that I think interact to bring this
about.

The rst is a shift from generic devices and software to specialized devices and
software. When computing was expensive, you had general purpose devices and
general purpose software that had deal with almost every situation. This necessitated
design compromises that resulted in devices and software that could do almost
everything, but did none of it well.

Now that processing is so cheap, you can have a combination of 10, 20, or 30
computing devices and apps for the price of that one device, and you can acquire new
functionality as needed. This means that every device and software package can have a
narrower purpose.
11
1he second Lrend ls LhaL much of Lhe value of compuung ls now remoLe. 1oday, mosL
people undersLand LhaL Lhe experlence you see on one devlce ls oen a parL of
someLhlng LhaL's dlsLrlbuLed LhroughouL Lhe world. 1here's no longer a need Lo pack
everyLhlng lnLo a slngle plece of soware, and Lhere's no expecLauon LhaL everyLhlng
wlll be Lhere.

lor companles Lhere are slgnlcanL lncenuves Lo have experlences ln Lhe cloud. AparL
from Lhe sLraLeglc advanLage of belng able Lo analyze all of your cusLomers' daLa ln
one place, whlch ls obvlously enormous, a cloud based servlce ls very hard Lo clone,
and lL's very dlmculL Lo examlne, so you're safe from Lwo of Lhe blggesL problems
LhaL sLandalone devlce makers experlence: plracy and l lssues. 1hls ls a blL obvlous
now, buL lL cerLalnly wasn'L Len years ago before Lhe Web 2.0 era.
12
If we chart these two tends, two broad classes of digital products emerge.

lf we follow Lhe local Lo remoLe axls, we nd general-purpose devlces LhaL do roughly
Lhe same seL of Lhlngs, and dler prlmarlly ln slze. They exist to provide access to
online services, in a form factor thats appropriate to the context in which theyre used.
l call Lhese devlces Lermlnals.

lf we follow Lhe general Lo speclc axls, we see a shl ls Lo more narrow-funcuon
devlces LhaL are deslgned Lo do a small seL of things with specialized hardware. A
parking meter can take quarters, which your phone cant do, and a digital SLR has a
giant lens on it, which you probably dont want on your phone. These devices differ in
their specialized hardware. l call Lhese devlces appllances.
13
The most interesting thing, however, to me is that these shifts are part of an even larger
transition, one where devices are simultaneously specic AND deeply tied to online
services. In this model, the service provides the majority of the value, and can be
represented either as a dedicated appliance, an app running on a terminal, or anything
in between.

I call these devices service avatars. And this is where much of the Internet of Things
currently lies, at least for consumer products.
14
As value shifts to services, the devices, software applications and websites used to
access itits avatarsbecome secondary. A camera becomes a really good appliance
for taking photos for Flickr, while a TV becomes a nice Flickr display that you dont
have to log into every time, and a phone becomes a convenient way to take your Flickr
pictures on the road.

Hardware becomes simultaneously more specialized and devalued as users see
through each device to the service it represents. The hardware exists to get better
value out of the service.
13
AnoLher example ls Lhe klndle. Peres a Lelllng older ad from Amazon for Lhe klndle.
lL's saylng Look, use whaLever devlce you wanL. We donL care, as long you sLay
loyal Lo our servlce. ?ou can buy our speclallzed devlces, buL you donL have Lo.
16
AL rsL WlLhlngs was klnd of a glmmlck. ?ou can LweeL your welghL Lo your frlends!"
was one of Lhe ways lL was orlglnally plLched. 1haL's of course noL parucularly
lnLeresung, buL LhaL was noL Lhe purpose of Lhe devlce. 1he scale ls Lhe avaLar Lo
WlLhlngs' healLh servlce LhaL helps you Lrack your welghL. 1he scale orlglnally
dlerenuaLed WlLhlngs from oLher welghL Lracklng apps, buL Lhe value ls noL ln Lhe
scale, buL ln Lhe servlce, whlch you can only fully experlenced uslng oLher avaLars,
such as Lhe web slLe and Lhe phone and LableL apps.

WlLhlngs has slnce expanded Lhe servlce Lo lnclude a bunch of oLher hardware and
soware avaLars. Agaln, Lhe value ls noL ln Lhe devlces, buL ln Lhe knowledge LhaL
Lhey creaLe by collecung slmple pleces of lnformauon and Lhen provldlng users wlLh
Lhe full power of cloud-based servlces Lo make use of LhaL plece of lnformauon.
WlLhlngs can keep addlng avaLars, new sensors and new ways Lo dlsplay Lhe
lnformauon Lhe sensors collecL, wlLhouL fundamenLally changlng Lhe promlse of Lhe
servlce.

17
?ou can see Coogle's sLraLegy here, Loo. Lach of Lhese Lhlngs may be presenLed as a
producL, buL really each ls an avaLar of whaL's perhaps golng Lo be Lhe same servlce,
probably some klnd of house healLh and securlLy" servlce.
18
SmarL 1hlngs clearly sLaLes lLs servlce oerlng rlghL up fronL on Lhelr slLe. 1he rsL
Lhlng Lhey say abouL Lhelr producL llne ls noL whaL Lhe funcuonallLy ls, buL whaL eecL
Lhelr servlce wlll achleve for Lhelr cusLomers. 1helr hardware producLs' funcuonallLy,
how Lhey wlll Lechnlcally sausfy Lhe servlce promlse, ls almosL an aerLhoughL.
19
Compare LhaL Lo x10, Lhelr splrlLual predecessor LhaL's been ln Lhe buslness for more
Lhan 20 years. All LhaL x10 Lells ls you ls whaL Lhe devlces are, noL whaL Lhe servlce
wlll accompllsh for you. l don'L even know lf Lhere lS a servlce. Why should l care LhaL
Lhey have modules"? l shouldn'L, and l don'L.
20
nexL l wanL Lo Lalk abouL Lrylng Lo make a plauorm, mosLly as a warnlng. Lveryone
wanLs Lo make Lhe nexL Lermlnal, a general-purpose neLworked connecLed devlce
LhaL glves access Lo a broad array of cloud-based servlces. Cr perhaps you wanL Lo
make Lhe nexL Ardulno and sell shovels Lo Lhe gold mlners. Companles and
developers Lyplcally go down Lhe road of maklng plauorms because Lhlnklng of acLual
Lhlngs people wlll do wlLh Lechnology ls really hard, and wouldn'L lL be awesome Lo
exLernallzes Lhe rlsk of lnnovauon, whlle lnLernallzlng Lhe proLs? lf we creaLe Lhe
ecosysLem, Lhen we wlll proL when developers' ldeas are successful, buL we won'L
lose anyLhlng when Lhey fall. lL's a wln-wln! 1haL's a nlce LhoughL, and lL's awesome
when lL works, buL creaung successful plauorms ls really, really hard.
21
LeL's say you wenL crazy and declded Lo make a generlc connecLed screen for
consumers, llke a phone, or a 1v, or a sllghLly speclallzed phone you wear on your
wrlsL. ?ou'll have Lo compeLe agalnsL Samsung. Samsung makes Lermlnals ln half-lnch
lncremenLs from 1 Lo 73 lnches across and Lhey can undercuL everyone excepL for
maybe Puawel. All of Lhelr producLs use screens LhaL Samsung makes, run processors
LhaL Samsung makes, Lhey use memory LhaL Samsung makes and Lhey are dlsLrlbuLed
Lhrough Samsung's sales channels, whlch Lhey [ealously proLecL. 1here's almosL no
way Lo break lnLo Lhls markeL, whlch ls why l suspecL Apple has never launched a 1v.
So unless you're ulLra-caplLallzed, you're llkely ouL of Lhe mosL generlc markeL.
22
1he nexL loglcal place Lo go ls Lo creaLe sllghLly speclallzed Lermlnals LhaL are sull
baslcally generlc devlces, buL have some expllclL use case resLrlcuon. 1hls ls klnd of a
graveyard of repeaLed fallures.
23
erhaps some of Lhese plauorm form facLors wlll come back and be successful ln a
dlerenL gulse. Aer all, LableL compuLers had a LwenLy year gap beLween when Lhey
were rsL lnLroduced and when Lhey were successful. 8uL from an lnnovauon
sLraLegy, l feel LhaL when you beL LhaL you can bulld a generlc plauorm and leL oLher
people gure ouL whaL lL's for, you are maklng a very rlsky beL.
24
l feel much Lhe same abouL hardware proLoLyplng plauorms. Maklng one Lo compeLe
wlLh Lhe Ardulno ls llke compeung wlLh Samsung on Lermlnals. Ardulno ls Lhe Androld
of Lhe physlcal compuung world. 8elng open source, cheap, well documenLed and ln
Lhe rlghL place aL Lhe rlghL ume wlLh Lhe rlghL connecuons gave lL an early lead Lo
bulldlng a developer communlLy and a publlc code base LhaL's almosL lmposslble Lo
beaL. 1here are some lnLeresung compeuLors, such as LlecLrlc lmp, buL l feel Lhe
compeuuon ls ln nlches, wlLh Ardulno rmly ownlng mosL of Lhe cenLer.
23
l Lhlnk Lhls ls Lhe mosL successful new plauorm Lo come along ln Lhe lasL couple of
years, and one LhaL can serve as an example for oLhers. 1he self-conLalned drone
serves as Lhe basls of many servlces LhaL range from agrlculLural appllcauons, Lo
archlLecLural ones, Lo [ournallsm, Lo games. When anyone comes up wlLh a
successful appllcauon, drone makers sell more drones. 1hey don'L have Lo worry
abouL whaL Lhe appllcauon ls, [usL LhaL Lhelr drone can ll Lhe necessary hardware Lo
enable lL.

erhaps Lhe one comblnauon of all of Lhese ldeas ls a drone servlce, whlch provldes
Lhe servlce of ll for buddlng drone appllcauon sLarLups. 1he AWS of lghL.
26
8uL now back Lo my core polnL.
27
8ecause hardware ls hard, because lL has long cycle umes, manufacLurlng and
LransporLauon lssues, lnLellecLual properLy lssues, updaLe lssues, cosL and user
adopuon and supporL lssues, lL should be used very carefully. lL should be used
Lacucally Lo creaLe a clear advanLage agalnsL compeuLors for whom lL wlll be hard Lo
copy ln Lhe shorL run, buL who you can assume wlll dupllcaLe Lhe devlce funcuonallLy
very qulckly lf you're successful. lf you're enurely dependenL on your hardware for
your markeL advanLage, you had beuer be ready Lo shlp your nexL hardware
lnnovauon, buL lf you use Lhe hardware Lo geL people lnLo your servlce, your nexL
move can be a servlce lmprovemenL, whlch may be one of any number of Lhlngs, noL
[usL maglc hardware. l feel LhaL Lhe long-Lerm greaLesL leverage wlll be Lhrough a
cloud-based servlce, raLher Lhan any avaLar, no mauer how clever or speclallzed LhaL
avaLar ls. l feel Lhe same way abouL Skully as l do abouL llLblL. lL's Lempung Lo carrled
away by Lhe physlcallLy of maklng hardware-l personally love lL- buL lf you leL Lhe
Lhrlll of maklng someLhlng you can hold ln your hand go Lo your head, you rlsk slldlng
lnLo gadgeL and glzmo LerrlLory, where your compeuuve advanLage ls llkely Lo be very
shorL.
28
29
AlmosL all of Lhe avaLars LhaL currenLly exlsL are super-Lhln. 1hey're baslc sensors
wlLh Lhe LhlnnesL posslble layer of neLworklng and processlng around Lhem. 1hls
makes Lhem cheap and dlsposable, so you can lLeraLe on Lhelr deslgn qulckly and
mlnlmlze Lhe per-unlL cosL Lo lower Lhe barrler Lo purchase, Lhus belng able Lo
compeLe wlLh non-hardware soluuons. 1haL's greaL, buL whaL are Lhe slLuauons
where you can geL slgnlcanL advanLage by lnLroduclng compuLauon aL Lhe edge?
lnsLead of sendlng back a sLream of raw daLa LhaL's processed ln Lhe cloud, Lhen
walung for a response, for cerLaln behavlors you can acL lmmedlaLely, or reduce Lhe
amounL of Lransmlued lnformauon by orders of magnlLude. 1he challenge here ls
ldenufylng appllcauons LhaL exlsL ln an ln-beLween sLaLe beLween slLuauons where
Lhe value ls excluslvely local and Lhe Lhose where value ls excluslvely creaLed by Lhe
servlce. 8rlan uavld !ohnson, who's noL here Loday, wroLe abouL 1vs LhaL fae
recognluon on every frame Lo ldenufy whaL acLors are ln whaL scenes, lndependenL
of where LhaL daLa sLream ls comlng from. 1haL sounds lnLeresung, and here's a
8aspberry l lmplemenLauon of [usL LhaL ldea, buL l'm noL sure of Lhe buslness
model. Pavlng local compuLauon also makes Lhe hardware way more expenslve ln
Lerms of cosL and bauery usage, buL l Lhlnk lL's a rlch area for explorauon.
30
1he company LhaL solves Lhe problem of servlce dlscovery wlll be Lhe Coogle of Lhe
lo1 space. 1he lack of decenL servlce dlscovery has plagued Lhe ublcomp/M2M/lo1
space for uLCAuLS. Pow can l ldenufy whaL devlces do whaL and Lhen auLomaucally
Lalk Lo Lhem. And lL's noL for a wanL of Lrylng. 1here are a mllllon soluuons and noL a
slngle one LhaL's as easy, open and agenda-free as P1ML was. l'm a blg fan of Lwo
approaches: one ls named daLa neLworklng, whlch A8C ls worklng on. 1hlnk of lL as a
mlx of 8luorrenL and unS LhaL Lhrows ouL mosL of Lhe assumpuons of 1C/l, buL lL
requlres rewlrlng neLwork proLocols down Lo llke lSC Layer 3, and Lhe lv6 change
Look LwenLy years, so l Lhlnk someLhlng wlll have Lo happen sooner. 1he oLher
soluuon ls Lreaung every devlce llke a Web slLe. 1hls ls Lv8?1PnC's Web of 1hlngs"
approach. ?ou [usL don'L dlerenuaLe beLween Lalklng Lo a key fob, Lalklng Lo an oll
rlg and Lalklng Lo lnLeresL. Lveryone uses Lhe same proLocols and you [usL Leach
Web dlscovery meLhods
31
MosL lnLerneL of 1hlngs dlscusslon ls ln Lhe consumer space, buL l Lhlnk a huge value
proposluon ls ln converung Lhe physlcal neLworks of Lhlngs LhaL buslnesses own Lo
dlglLal neLworks. 1here are a huge number of buslnesses LhaL have collecuons of
devlces and processes LhaL are essenually physlcal neLworks: all of Lhe machlnery and
process a farmer has when growlng cucumbers, Lhe washlng machlnes aL a laundry
faclllLy, Lhe complex loglsucal chaln LhaL a coee roasLery paruclpaLes ln. 1hls doesn'L
have Lo have Lhe magnlLude of CL's lndusLrlal lnLerneL vlslon, where Lhey're
collecung LerabyLes of daLa per hour from a dlsLrlbuLed sensor neL on an oll rlg. lL can
be much smaller and can, say, use predlcuve analyucs Lo Lell a dellvery company
when a car needs malnLenance before lL acLually breaks down, or lL can glve Lhe
owner of a sewlng company real-ume daLa abouL machlne uullzauon so Lhey can
declde how many people Lhey need Lo brlng ln Lomorrow.
32
33
1hls ls 1lme Magazlne's lllusLrauon of Lhe lnLerneL of 1hlngs for Lhelr 8esL
lnvenuons of 2008" edluon. l love Lhls lllusLrauon ls because lL makes no sense no
mauer how you Lhlnk abouL lL, whlch ls acLually qulLe an accuraLe represenLauon of
how confuslng Lhe many denluons of Lhe lnLerneL of 1hlngs are rlghL now.

1o me Lhe lnLerneL of 1hlngs ls noL abouL Lhe Lhlngs, buL Lhe servlces LhaL glve access
Lo, and LhaL your blggesL challenge as deslgners, developers and enLrepreneurs wlll
be Lo undersLand how you can use Lhe Lhlngs Lo creaLe value, Lo creaLe susLalned and
susLalnable change, ln a world where Lhere ls an enormous amounL of poLenual for
embedded, neLworked Lechnology, and an enormous number of paper Lhln, one noLe
gadgeLs. l once heard an lndusLrlal deslgner say LhaL everyLhlng you deslgn ls garbage
from Lhe mlnuLe lL comes o Lhe assembly llne, and LhaL lL's your responslblllLy Lo
keep ouL of Lhe Lrash bln for as long as posslble. l Lhlnk LhaL ln Lhe lnLerneL of Lhlngs
LhaL ls especlally Lrue and l challenge you Lo spend Lhe resL of Loday Lhlnklng
especlally hard abouL why you wanL Lo make Lhlngs aL all, and Lhen how you can
make Lhem provlde Lhe mosL value, for Lhe leasL cosL, for Lhe mosL people, for Lhe
longesL ume.
34
1hank you.
33