Nine thoughts about the Internet of Things

1. The concept of ‘computers’ is moving away from the traditional model of desktops, laptops, and PDAs towards converged networks where processing power is embedded in all manner of objects and devices.

2. As a result of embedding computing power into these objects, we will move from keyboards and mice to a number of different input devices, including gestural controls (such as Wii wands and touch screens) and voice recognition. The conventional metaphor of the ‘desktop’ may need to shift to accommodate this.

3. Because many of these objects will have wireless sensors, they will be context-aware and can respond to changes in their environment. The possibilities for this have not yet begun to be explored in a significant way.

4. There will increasingly be a digital overlay of information for the physical world. First,
associating an IP address with these objects enables thing-to-person (T2P) and thing-to-thing (T2T) communications. This has been referred to as ‘the Internet of things.’ Second, innovations such as QR codes on posters, billboards, and television enable us to create direct ‘hotlinks’ from the real world to the Internet. Third, mobile phones or PDAs equipped with GPS enables locative media. The possibilities for this, too, have not yet begun to be explored in a significant way.

5. Digital widgets may replace some physical devices. As has become common with Web 2.0, independent developers will create apps for this platform, enabling functionalities that were never conceived of by the original creators. Adding features to your networked home or smart object may be as simple as downloading upgraded software to your iPhone.

6. These technologies will be as transformative as the Internet for a number of industries. In particular, the industries which have resisted change and innovation will be the ones most profoundly affected. It will be very difficult to ignore these innovations and still remain competitive.

7. There is significant market potential for these innovations. Many of these concepts will
follow the conventional diffusion of innovation, and will likely begin in industrial sectors
before filtering out to more commercial and entertainment applications. The adoption of
these technologies will be driven in part by market forces (technologies that entertain or
which enhance the quality of life) and in part by policy change (especially for technologies
regarding green buildings, energy efficiency, and alternate energies).

8. Networked objects create and record significant amounts of real-time data. Having this granular level of data allows us to create much more sophisticated analytics around how objects and devices are actually used.

9. Industry groups, corporations, and individual products will need significant advertising
and public relations support for their launch and ongoing marketing efforts.

10. Marketing firms which establish an early understanding of and dominance in these sectors will have an competitive advantage. These firms will not only understand how these
technologies can be used as platforms for new marketing strategies, but can also use that
knowledge to sell conventional marketing and PR services. The next generation of technology will be mostly marketed using social media.

There are presently slightly under 1.5 billion PCs connected to the Internet, and just over 1 billion net-enabled phones. Mike Nelson (former director of Internet Technology at IBM, the former director of Technology Policy with the FCC, and a professor at Georgetown’s Communications, Culture & Technology program) estimates that as we move from an “internet of PCs” to an Internet of Things, that there will be roughly 100 billion net-enabled devices within the next 5-10 years.

More on this in Hammersmith’s upcoming Networked Objects and The Internet of Things report.

According to the Gartner Group, “By year end 2012, physical sensors will create 20% of non-video internet traffic … The extent and diversity of real-time environmental sensing is growing rapidly as our ability to act on and interpret the growing volumes of data to capture valuable information increases.”

Most of the discussion around technology and real estate has focused on energy-efficiency or property management applications. These uses of technology are essentially invisible to the residents of a space.

This research report from Hammersmith explores how pioneering projects are incorporating technology to address lifestyle issues and enhance the experience of being in a space for residents.

While most of these examples are drawn from hospitality and senior housing sectors, it is critical to remember that each of these are critical vectors for disseminating innovations: each hotel room exposes hundreds of guests per year to the technologies, and senior housing can demonstrate the value of certain innovations to the extended family. In each case, the asset class serves as viral marketing.

Let me know what you think:

Real estate and technology aren’t two terms typically used in the same sentence. Real estate isn’t an early adopter of technologies, and construction is even less so. But the industry is facing extraordinary pressures to catch up to the leaps of innovation found in other industries – and to remain relevant to the changing preferences of consumers.

Much of the general conversation on real estate and technology focuses on green buildings, and the next step will likely be on intelligent buildings. Green systems typically use resources more efficiently; intelligent building features help make green buildings greener by allowing them to be responsive to their environment.

The next step beyond this is to add wireless sensors to individual components and systems. This will not only enable owners to monitor a building’s performance in real time, but (to simplify greatly) it will also generate a massive amount of data … data that will be analyzed, anonymized, Googlified and correlated for some very interesting results. And you thought Google Analytics for your website was interesting? Just wait until the equivalent is available for the building and the surrounding street activity.

We wanted to use this blog to share some of Hammersmith’s research and engage in a dialogue over this emerging trend in real estate. For the first time, it looks like the next phase of the web – the Internet of Things –  may emerge from the real estate sector.

This is going to have very interesting opportunities and possibilities. We’ll try to explore some here, but one thing is certain – some the most interesting will be user-generated hacks that take advantage of converged systems and connected buildings. (It’s like trying to extrapolate call waiting, 900 numbers, and booty calls from Alexander Graham Bell’s first phone call. Which happened in my hometown, by the way, but that’s a different story).

We look forward to your thoughts on this forum.