Strategic CIO // Executive Insights & Innovation
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5/14/2014
09:06 AM
Chris Murphy
Chris Murphy
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Internet Of Things: Who Gets The Data?

Connected machines will spark new negotiations along the supply chain.

This column is a quick followup to our recent in-depth article on The Internet of Things: What's Holding Us Back

Picture a roundtable discussion about the Internet of Things and who should get access to the data it generates. Who do you picture at that table, clamoring to get access to (or keep away from) the data created by this growing network of devices?

Me, I go right for the dramatic tension and picture a chief marketing officer, an ACLU lawyer, and an NSA analyst who identifies herself only as Susan.

Most companies will face a reality that's far less dramatic but maybe scarier. Take this scenario: In walks your banker. And insurance agent. And the dealer who sells and repairs your equipment. And the manufacturer who makes replacement parts and sells a competing product. And one of your customers.

Most of the IoT-related discussion around who controls the data focuses on public policy, such as whether to regulate what utilities can do with the customer data they collect via smart meters. And those discussions will be fascinating to watch.

But a huge round of negotiating will happen behind closed doors, where companies bang heads internally and with suppliers, partners, and customers over operating and performance data that has never existed before -- data that one party wants and another would like to keep to itself.

Take the example of your company's banker, who arranges the leasing deal for a piece of equipment your company will use for 10 years. The banker's profit pivots on how much that machine will be worth in 10 years. So what if, when a machine came back subpar, the banker could run analytics on the data your company keeps on the machine's daily performance and ask: "Why did you allow that level of vibration to continue for six weeks without repairing it? You violated your maintenance clause."

I had a discussion on this topic with two execs from M2Mi -- vice president of business development Sarah Cooper and marketing vice president Manu Namboodiri. M2Mi makes a software platform aimed at making Internet of Things (machine-to-machine) implementations easier and more secure, including sharing the data generated. One piece of that security is routing data to different parties based on their access rights.

The complexity will grow as machines make more automated decisions about whom to share data with, Cooper says. Machines are even starting to get their own credit cards with spending limits, so that when a machine's sensors show specific warning signs, the machine can contact a repair company directly and authorize a crew to come out and spend up to a certain amount to fix it.

However, when it comes to a customer sharing its data with a product supplier, the power in the relationship is clear, says GE Power & Water CIO Jim Fowler. The GE unit learns a lot by studying operating data from customers' gas and wind turbines, but those customers provide that data only if GE's analysis can help them boost profits, such as by burning less fuel and generating more power. "My customers are willing to let me have access to the data because I give something back in return of value," Fowler told InformationWeek Conference attendees last month. "And I have to keep doing that."

These data-access discussions have played out many times before around sharing data on factors related to sales, inventory, and production costs. What's new is that, as we put sensors on more "things" and build more connections among devices, it will get increasingly difficult to say, "We just don't have that data." So technology leaders need to prepare for the hard discussions ahead, understanding the relationships involved and their companies' technology capabilities to collect, share, and restrict access to the new kinds of data they're generating.

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Chris Murphy is editor of InformationWeek and leader of its Strategic CIO community. He has been covering technology leadership and strategy issues for InformationWeek since 1999. Before that, he was editor of the Budapest Business Journal, a business newspaper in Hungary; ... View Full Bio

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MedicalQuack
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MedicalQuack,
User Rank: Moderator
5/16/2014 | 12:18:54 AM
Data Dealers and Internet of Things
We need to license and even excise tax data sellers as here's your reality of what's out there..enjoy the video..  Here's where they are buying up your Visa and MasterCard records at the link below. 

http://ducknetweb.blogspot.com/2013/03/insurance-companies-are-buying-up.html

Two years ago I started it an "epidemic" and it's there now and said when used out of context it stands to be the greatest attack on consumers ever seen.  Walgreens itself makes a billion or more a year just selling data.

http://ducknetweb.blogspot.com/2012/11/big-dataanalytics-if-used-out-of.html

Here's a game made to bring attention to this as well.  White House report completely ignored the data selling epidemic. 

 

Charlie Babcock
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Charlie Babcock,
User Rank: Author
5/15/2014 | 3:37:14 PM
Airplane crashes result in data in public sphere. What about computer crashes?
Who owns the IoT data? What if the owner of a choke point collects data on Internet devices, without telling the owner of the devices? Will machine data evolve into public and private forms, with some operations in the public sphere yielding data that is obligated also to remain in the public sphere? Data on airline crashes is already in the public sphere under the authority of the Federal Aviation Administration. What about Internet server crashes?
johnmichaeleden
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johnmichaeleden,
User Rank: Apprentice
5/15/2014 | 2:12:12 PM
Getting security right in IOT
Chris, first of all great article.  

I think Cooper is right.  As a product strategist and former infosec consultant (Securify, acquired by McAfee), I'd say this:  It's critical to prepare for every conceiveable hack/exploit/compromise that a truly connected world will invite.

Remember the early anti-virus SW companies?  They essentially built sophisticated alarm systems, sometimes with forensics tools and sometimes not.  And that's all they could really do because the basic architecture of the Internet was not built with security in mind.

But with IOT, bolting on alarms or creating patches after threats emerge would be idiotic.  With $100 billion in estimated annual losses due to cybercrime, we simply must learn from our mistakes.  

I applaud M2Mi for being thoughtful and proactive about security.  Let's just hope the entire ecosystem hears the message in time.    
mnamboodiri
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mnamboodiri,
User Rank: Apprentice
5/15/2014 | 10:43:04 AM
Data is becoming the center of gravity for the IoT economy
I think data is well on the way to becoming the center of gravity within the IoT economy. Even beyond the secure sharing of this data, I think the implications will be in "thin" apps, "focused" or even "disposable" devices.. In some sense, enabling a move beyond an "intranet of things' to a true "internet of things" where data sharing drives even more interesting use cases..
IoT_People
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IoT_People,
User Rank: Apprentice
5/14/2014 | 5:28:39 PM
I got the data. What does it mean...?
Incentivizing the data is going to be tricky on both sides.  For example, offering a discount in exchange for certain behaviors may turn out to be spurious at best.  Often times, the IoT or M2M data stream will be a first look at a process and that look may well be a surprise!  The initial scarcity of data, where the experiment sample size approaches N=1 will make opting in to a data stream an act of philosophy rather than science.

Eventually, the data becomes aggregated with enough samples that conclusions, discounts, and penalties can be applied.  Behaviors and process will be shaped when that data is dense enough to see the special cause when it shows up.

 
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
5/14/2014 | 12:58:58 PM
Don't tell me you don't have the data
Even back in the day when data collection wasn't ubiquitous, I knew somebody was lying to me when they said "We just don't have that data." Now it's almost insulting to say that. 
Laurianne
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Laurianne,
User Rank: Author
5/14/2014 | 10:34:41 AM
Insurance data implications
Great questions, Chris. I think about how IoT and big data will reshape the insurance industry. As a consumer, I assume the whole dynamic will change because so many of the "unknowns" will disappear.   Insurance companies will fight hard for every scrap of data they can get, understandably. Their partners may not have the incentive to share.
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