Google Invests In the Internet of Things

nest-thermostatIn an ironic twist of fate, Google, and many other tech companies, are beginning to realize that they need things to capitalize on the enormous Internet of Things (IoT) opportunity.

We live in a smart, connected world. The number of things connected to the Internet now exceeds the total number of humans on the planet, and we’re accelerating to as many as 50 billion by the year 2020 according to Cisco. A recent McKinsey Global Institute report, Disruptive Technologies, finds that the IoT has the potential to create an economic impact of $2.7 trillion to $6.2 trillion annually by 2025.

The bad news for tech companies is that the majority of those 50 billion things are not going to be computers and phones. They are going to be homes, cars and bodies. Google may dominate in the traditional computing platforms, but this new smart, connected world is the wild, wild west.

The connected home. Not surprisingly, there is a lot of buzz around Google this week after it agreed to pay $3.2 billion in cash for Nest Labs, which makes a smart, connected thermostat and smoke detector. However, Google has been focused on establishing its platform in the home since 2011 when it announced the Android@Home framework for home automation. The vision is that all of our home appliances, gadgets and infrastructure will communicate with one another through a new computing platform. Owning that platform, like owning the OS on your computer is key, and Nest may be Google’s Trojan horse.

The connected car. At the 2014 International Consumer Electronics Show (CES) in Las Vegas the IoT was once again a central theme, and auto OEMs lead the charge. Audi and Chevrolet announced plans for embedding 4G LTE connectivity in their cars, and with connectivity comes new apps and services all requiring an OS. Apple had already announced iOS in-car capabilities with the release of iOS 7, and not to be outdone, Google announced the Open Automotive Alliance (OAA) at CES. This global alliance of auto industry leaders including GM, Honda, and Audi, is committed to bringing the Android platform to cars starting in 2014.

The connected body. As reported by Financial Review, Google was awarded nearly 2000 patents in the United States last year, almost double the number of all previous years combined. This highlights a race to stake out promising new technology markets, as fields such as wearable computing become the next frontiers for growth. Much of the wearable computing focus for Google has been associated with Project Glass, Google’s effort to develop augmented reality glasses. While Google offered Google Glass to a handful of developers and technology enthusiasts for $1,500 this year, there is buzz a public release is likely early next year.

“Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone,” Nest CEO Tony Fadell wrote in a blog post. The world is changing faster than ever, and Google is betting on homes, cars and bodies to be the things that enable competitive advantage in a smart, connected world.

Apple Defines the “Holy Trinity” for Product Companies

Apple AdsThere’s been a lot of chatter on the internet recently about Apple’s new ad campaign. Some positive and much of it negative. Author and former Apple ad man Ken Segall hates the ads because they “make customers seem so clueless.” The truth is that most users are clueless about technology, yet Apple needs those same users to buy more Apple products.

In their latest quarterly earnings Apple delivered a rare earnings “disappointment” after sales rose only 23 percent to $35 billion sending its stock down five percent in after-hours trading. When you are a $570 billion company, attracting larger markets and developing new revenue opportunities is everything.

So what is the strategy today? How can Apple continue to innovate, differentiate and justify its price premiums? How can it accelerate the transformation from a company for MacHeads to a company for most?

Let’s start by taking a big step back.

When Steve Jobs introduced the first iMac back in May 1998, the focus was on the product hardware: a G3/233 processor, a 15 inch monitor with 1024 x 768 resolution, 100MB Ethernet, etc.

The punch line to his presentation, and the real differentiator for Apple at the time was the radically different and simple design. The all-in-one package, the translucent candy colored box, the carrying handle. As Jobs described it: “This thing looks like it comes from another planet… a planet with better designers.”

Fast forward nine years and Jobs presents a very different, but additive, perspective on Apple’s unique value. In his May 2007 “All Things Digital” conference interview, Jobs defined Apple products as really just software.

“It’s software in the iPod itself, it’s software on the PC or the Mac, and it’s software in the cloud for the store. And it’s in a beautiful box, but it’s software. If you look at what a Mac is, it’s OS X, right? It’s in a beautiful box, but it’s OS X. And if you look at what an iPhone will hopefully be, it’s software.”

What should we take from this? Yes, you need beautifully designed products, but the innovation, differentiation and value for users is really taking place at the software level.

Now, five years later, Apple is refocusing once again.

These latest Apple ads paint a very different picture of the company. The emphasis is not on beautiful, sleek products or rich but simple software (although they are mentioned in the ads). Rather, it’s on the Genius customer service representative helping users do amazing things with their Apple products better and faster.

What’s Apple really saying about itself in these ads? It’s saying, we not only have the best hardware and software, we also have the best service out there. It’s promoting Genius as a third key value.

Perhaps Apple’s realized that successful products are not only about hardware and software, but also about delivering value throughout the entire lifecycle – including services.

If you are a product company that aspires to be more like Apple, these ads are a good indication of what the tech giant thinks it takes today to deliver differentiated value for users and subsequently for shareholders: product and service delivered seamlessly.

What do you think of Apple’s new focus on service?