Creating Versus Destroying Value

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COURAGE, PILGRIM

People always confuse risk-intolerance with being backward or “being behind,” but in some cases it might just come from not wanting to die. Take a walk down to the Digital Tar Sands and look at the petrified limbs of the manufacturing giants sticking up in the air, and you’ll know what we mean.

All digital systems and software are virtual reality. The “virtual” part is that it’s nothing but lines of code moving around on networks. The “reality” part is that when those lines of code are fed into a microchip, tiny voltages appear or disappear, and based on those voltages, airplanes fly or fall, cars stop on command or race out of control. Digital intelligence and software are now in everything. It’s indisputably disrupting OEM profits and revenue models across many industries. Hardware OEMs literally have no choice but to embrace Smart Systems. The questions are: How, where, and to what ends?

NEW COMBINATORIAL INNOVATIONS ARE DRIVING SMARTER DIGITAL SYSTEMS

A CHILD’S HISTORY LESSON

Once, all machines were purely mechanical. Then many of them became electro-mechanical, and ultimately digital-electro-mechanical. Paralleling that progression, there was a time when machines weren’t intelligent at all. But history went another way.

Suddenly, digital technologies are as germane to physical manufactured things as a bearing is to a mechanical assembly. Further, the definition of an intelligent machine is a moving target. At the end of the day, any product that can be networked and made more intelligent will be, and as that evolves from simple sensing and monitoring to AI, machine learning and autonomy, the world of the OEMs will change radically. Machine, equipment and component manufacturers need a clearer framework for understanding what role digital intelligence, software and Smart Systems technologies will play in their business, operating models and strategic decisions. Unfortunately, such a framework is hard to come by.

WHO’S IN CHARGE OF DESIGNING FUTURE SMART SYSTEMS?

The telecom, IT and automation, and control sectors have, in many ways, failed to re-evaluate their relationship to advancing technology. The business and technology paradigms to which these communities cling today are far too limiting, cumbersome and expensive to foster and sustain digital innovation and new growth.

The problem with IT systems suppliers is their roots go back to batched processing. Think of a giant soup pot into which you’re always throwing more data. You’re trying to predict what will happen next week based upon what happened last week. Even if you add AI and machine-learning to that, it’s still batched processing.

Then the telco equipment vendors and wireless carriers came along with networks and real-time processing at scale (albeit not deterministic). This was a huge development, but the carriers had no idea what an application was outside of a smart phone or cell phone.

And let’s not forget the automation and control players. The systems that control things in factories, vehicles and airplanes live in a real-time world and are “stateful” in nature. The automation and control players have built a thoroughly “stateful” awareness of the world—spatial, temporal, time-series, real-time. But they were still just trying to control things. They weren’t leveraging the valuable data and information that you inherently get from controlling systems.

CORE TECHNOLOGIES ENABLING SMART SYSTEMS

Squint your eyes and the story looks like this: Once there was enterprise, then there was enterprise plus web, then there was enterprise plus web and mobile. Today we have the enterprise plus literally everything, including IoT, AI/ML and all sorts of other Smart Systems, but not ending there. Emergent Smart Systems technologies are simply the latest expansion of digital innovation, and it will eventually become just another transformational fact of life, much the way mobile has.

Our concept and definition of Smart Systems is uniquely positioned at the intersection of these three evolutions: batched, wireless, and embedded. In many ways, the incumbent technology players are all stuck in their legacy technical development cultures, and this prevents them from clearly seeing this future.

When it comes to developing the required technologies to fuel Smart Systems and services adoption, most people assume that the IT, network and automation “arms merchants” are taking care of it. They take it on faith that the best possible designs for future Smart Systems architecture will emerge from large incumbent tech players. But those are big, unfounded assumptions. In fact, most entrenched entities are showing little appetite for radical departures from the legacy development paths they are on. Yet, these development paths will not serve the needs of a genuinely connected world.

SEEING THE FUTURE

For the last ten years or so, the evolution of digital systems has been largely comprised of in-tegrating sensors into physical equipment and moving data and workloads from physical hardware to virtual platforms. Developers have moved the data center to the cloud and businesses have transitioned from managing their own computing and network assets to “everything-as-a-service.” We have transformed diverse processes from manual human mediated workflows to sensing and automation supported by cloud services and mobile apps. Digital innovations have transformed the way we work with distributed, low-cost access to da-ta, content and information services.

The shift to truly intelligent distributed systems requires a new generation of architectural ca-pabilities that are designed and built from the ground up. Networking, computing, sensors, da-ta, and applications have all, for the most part, evolved in relatively autonomous development paths. This will need to change.

We are at the dawn of a new age of information and infrastructure technology in which distri-buted networked systems combine with pervasive computing to take the notion that the network is the computer to new heights. These systems will require creative combinations of core technologies that create better ways to manage diverse data interactions and eliminate data boundaries.

Smart Systems and Services growth opportunities present multiple challenges for diverse participants. From core technology innovation, to new business models, to ecosystem and channel development, this market opportunity represents a very complex set of interrelated elements. Designing new Smart Systems and Services involves optimizing all dimensions not just technical elements. System and solution developers will need to be acute at spotting emergent trends and being able to quickly respond to new market entrants and evolving competitive threats. In this fast changing environment, leadership’s ability to identify trends and potential discontinuities “around corners” will become a minimum requirement for success. ◆

Please read the companion download to this article, “The Core Technologies That Inform Smart Systems” a paper that outlines the innovations, technologies and trends driving Smart Systems. Click here to access.