Business and the Economy in an Internet + Everything World

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  • From left, Emily Chang, Vishakha Radia, Michael Mandel, Amit Kumar, Greg Ross (all photos by Asa Mathat)

    From left, Emily Chang, Vishakha Radia, Michael Mandel, Amit Kumar, Greg Ross (all photos by Asa Mathat)

  • Michael Mandel (l) and Amit Kumar

    Michael Mandel (l) and Amit Kumar

  • Emily Chang

    Emily Chang

  • Greg Ross

    Greg Ross

Panelists

Amit Kumar
CEO and Co-founder, Bitponics

Michael Mandel
Chief Economic Strategist, Progressive Policy Institute

Vishakha Radia
Managing Director, Collaboration, Video, and Mobility, Cisco Consulting Services

Greg Ross
Global Director, Product Strategy and Infotainment, Global Connected Consumer, General Motors

Moderator

Emily Chang
Anchor, “Bloomberg West”, Bloomberg Television


In a world where we can connect almost anything to the Internet—from mousetraps, lights, and thermostats to cars, factories, and even our bodies—we are witnessing a fundamental shift in the way we view, apply, and distribute intelligence. This is altering business, social, and personal landscapes, presenting us with a whole new range of opportunities. What does this mean for the future of business and the economy? How can we harness the Internet of Everything to boost U.S. competitiveness?

Read the full transcript below. (Transcript by Realtime Transcription.)

For more about Techonomy Detroit, including a complete archive of videos and transcripts, click here.

Chang: Here to talk about the Internet of Everything, not the Internet of Things, the Internet of Everything—that is an important distinction. We have a great group of panelists here to speak with us today. Vishakha Radia from Cisco, managing director and global lead, very focused on the Internet of Everything and Internet of Everything products at Cisco. Michael Mandel, the chief economic strategist of Progressive Policy Institute, and you are focused on the data-driven economy, innovation—

Mandel: And the Internet of Everything as applied to the whole economy.

Chang: Amit Kumar, CEO and co-founder of Bitponics, which basically gets your garden and your plants online. And so any of you with brown thumbs out there, maybe this can help you. And Greg Ross, global director for Product Strategy and Infotainment, focused on connected cars at General Motors. And two Detroit residents—natives, natives?

Ross: Absolutely.

Radia: Go, blue.

Chang: This is my first time to Detroit, so I’m learning a lot about the city, and I love it so far.

Greg, I want to start with you, since you are the car guy. We’re in Motor City. Everybody wants to know, I think, why isn’t my car as smart as my phone, and how do we get it there?

Ross: It’s a good question. It’s a question we are working to answer. We talk about Internet of Everything, Internet of Things. We have seen the opportunity to connect cars to one another and to the infrastructure for a long time, all the way back to launching OnStar back in 1997, and we’re just continuing to expand on that, putting more connected technology in our vehicles, inviting developers in to work with us and work in the car and make your car a more connected car. So we think not only will your car get smarter, but we envision the car will get smarter and more personalized as you drive it and own it.

Chang: Cisco has been really focused on Internet of Everything. What does that mean in terms of products? What do you actually do?

Radia: Fair question. So hopefully later we’ll talk about some of the overall research that we have done in the consulting services organization. But in terms of products, absolutely our entire suite of collaboration products, whether it’s video conferencing or video endpoints or unified communications, our whole platform there, or obviously our WebEx platform, where I’m sure many of you are taking your calls and sharing content with our application from the cloud—all of these products, plus we have a whole new business unit now called the Internet of Things Business Unit that is strictly focused on really leveraging all the things in the network and all the products that you can create to really connect all these things that are still yet to be connected.

Chang: Is that how you define it? What does it really mean, the Internet of Everything?

Radia: Ours is a little different from others, so that would be a fun thing to talk about. When we think about the Internet of Everything, it’s really about four things: People, process, data, and things. So it’s all four things, and coming together from a networked connection standpoint. That’s really how we’re defining the Internet of Everything.

And it’s not just about the technology and it’s not just about the new capabilities or the experience that it helps. It’s fundamentally about the economic value. It’s about fundamentally what it will do for business and individuals and organizations.

Chang: Amit, you have taken a thing—plants, gardens—and you have connected it to the Internet. Tell us about Bitponics, what you do, and how you did it.

Kumar: So we create products that automate and socialize hydroponic gardening. So we have a physical device that sits in your garden, monitors all the stuff your plants care about—nutrients, temperature, light levels—sends it up to the web, where you can get a real-time view of how your garden is doing. And then you can connect with other growers to share tips on how to grow different gardens better.

Chang: How many people do you have?

Kumar: We are still a prelaunch startup. I’m representing the early-stage movement of this Internet of Everything. So we have a couple pilot projects going on right now. Last year we had a Kickstarter campaign, which was successful. So right now, we are in the end stages of getting those units out. So we’ll be learning pretty soon what the market viability of the product is.

Chang: Michael, what does this mean, economically? What is the value?

Mandel: As a former professor, I feel like saying everyone come closer. Everyone move down.

Chang: Please, feel free. I will take questions from you later. So if you have something you want to add.

Mandel: Let me take the big picture. We had a lot of sort of movement of the Internet into our daily lives. But if you think about it, the Internet has mostly transformed information-intensive industries, like journalism, like entertainment, like communications. What we, what we haven’t had, surprisingly—it becomes much harder to use the Internet to actually transform physical industries. It’s much more complicated.

That’s why what GM is doing is so impressive. The physical world needs a lot more information—you need a lot of sensors, you need a lot of big-data capability to process, you need ways of getting it to people to make decisions, and so from an economic point of view, we had a two-track economy. The information-intensive industries have jumped forward. Physical industries, like manufacturing and transportation, haven’t been affected that much. So I think what we will see, as the Internet of Everything spreads out, we are actually going to see the whole economy speed up, we are going to see wages increase and we should be able to see more job growth. So this is really the second or third or fourth stage of the Internet, and it may be among the most important.

Chang: And I read, isn’t GM, like, quadrupling its tech staff or something like that?

Ross: Yeah, significantly adding to the tech staff, and a lot of it is in this software area. The car is a software-defined device in the same way a lot of other devices are today, and because it’s software-defined, we have the ability to make it able to do additional things and more customized, more personalized.

Mandel: Can it drive faster?

Ross: As long as it’s legal and safe.

Chang: What kind of things are you working on? There are so many—my car will be able to drive itself someday; will I be able to talk to it and tell it what to do?

Ross: We heard about the self-driving cars thing. I think that’s certainly part of the future. It’s part of what’s connecting your car to the Internet could enable, to getting the sensors that you need to make that possible, but not having to wait for all that to happen, we can already improve the way your vehicle ownership works by how the car knows when it needs maintenance done, when it needs fuel. It can help make your day more convenient and make your car last longer by helping you get those things done when you need them done. Simple things like that; we can help you connect your car to your—maybe your insurance provider, if you want to share that information, to help get usage-based insurance. That’s something that we’ve worked on as well, because there’s data from the car that can be used to judge how you are using the vehicle and that they can use to give you a better service experience.

So we are finding a lot of opportunities, a lot of use. The other thing that been revealing to us is, some of these uses are so specialized, it is really important we open ourselves up to ideas from outside our company.

Chang: How do you do that?

Ross: We stood up a developer site, developer.gm.com. We’ve got 3,000 developers now registered and submitting applications, both applications that pull data from the car as well as applications that run in the car. And we had a great example of one. I found out painfully how important it was to some of our drivers.

One person created a service called Volt Stats. He was a Volt owner, he was excited about his performance of the Volt, wanted to keep track of how much energy usage he was using. He built a site to allow himself to compare it to others. And my bad experience—we had to take it down for some security updates, and I heard just how passionately attached every Volt owner was to Volt Stats and how important it was for them to use it to monitor their driving.

Chang: Amit, from a product perspective, how hard is it to get something online that has never been online before?

Kumar: Good question. There’s a couple parts to it. From building prototypes, it’s not that difficult to get something online. Right now there’s this maker movement around open-source hardware, where you have the Arduino making it possible to build intelligent gadgets and physical things a lot easier than you could before.

It’s a simple programming language, to be able to introduce logic and technology into physical things is a lot easier than it was before, through Arduino mainly. And part of the Arduino ecosystem is Wi-Fi chips and Bluetooth chips, so building the prototypes is not difficult. One thing we have encountered is the difficulty of getting from a prototype to an actual finished shippable product. There’s a lot of new issues that you encounter in transforming something from a development board into a mass manufacturing.

Chang: Also about changing mindsets—hey, I can do all those things with technology that I haven’t been used to doing.

I was interviewing Jack Dorsey, the CEO of Square, and he has this vision that with Square Wallet, whenever you walk in a restaurant or a store, you should be able to pay without even taking out your phone. And they have that technology, but people don’t use it as much, because they have to change the mind-set essentially.

Mandel: One of the places where the Internet of Everything is important: delivering local services, like sanitation, like environment, like disaster relief, and so forth. In that case, what you are doing is offering better services to people more cheaply and so it is not necessarily that hard. It’s just a matter of getting maybe your workforce retrained to sort of understand that this is going to help them do better.

Chang: Which takes time.

Mandel: If you think about the definition you say, not just about connecting up to the Internet, but about people and data and processes as well, what you are sort of talking about is you’re talking about remaking your whole economy to work to be able to deal with this new information that you didn’t have before, to make better decisions, and so it is about retaining people too.

So in some ways, if you had Internet of Everything hydroponics, part of what you are doing is you are getting to—retraining people who formally did it one way to do it another way.

I want to say something about jobs, because Brooklyn has one of the fastest growing tech communities in the country, in part because of innovations like this. So this is job-creating stuff, not job-destroying stuff.

Chang: Cisco has a number that you put on the Internet-of-Everything economy. Quite large. Tell me what the number is.

Radia: 14.4 trillion.

Chang: What is that number?

Radia: It was derived from a set of 21 very specific use cases. So it’s a bottoms-up calculated number. And that was summarized into five—so we had to come up with five value drivers, but essentially what that number is about is in this Internet-of-Everything economy, what is the value at stake? What are companies going to be able to achieve from a profit standpoint? So what—okay, this is a big number with all those zeros. What does it mean? This is over the next 10 years.

Over the next 10 years, 21 percent of corporate profits are up for grabs. And they are up for grabs—either you are going to have an industry with a set of companies in there or you might have another industry with another set of companies in there. This value will be grabbed by anyone taking advantage of the Internet of Everything. They will take that profit from another competitor in their industry; but the other place that the value can happen is when one industry disrupts another.

My colleague here, I think, is going to have us all by making produce in our backyards, as opposed to going to the store to buy produce, which I’m all over. So my point is, there’s a disruption possible between industries. So that was clearly something we took into account and consideration.

We also took cost reduction into consideration, employee productivity into consideration, and of course, net new revenue. What are the amazing new things you are now going to be able to do as you serve your customers?

Let me give you one example. The state of Oklahoma, for whatever reason, has the highest number of strokes. And what they implemented was—and they have only got these two hospitals with the specialists that you need to get to. When you have a stroke, you really have to get to the hospital and have this one drug administered as soon as possible. If you don’t, the consequences are not so great.

So what did they do? Huge number of strokes. They had these two hospitals. What they created was medical centers, 15 of them across the state. The patient suffering from a stroke now don’t have to go to those two hospitals. They can go to a medical center and a nurse, with the right process, with the right data, using something called Telestroke, which is some Cisco technology that incorporates video. So it’s people, process, data and things—the nurse is able to get the neurological consult. And they have already treated hundreds of people this way.

So this is a way that you are really, in this case, the customer is really the patient, but you are really changing the way you serve patients going forward.

Chang: And you’re not just connecting things. You are getting data about these things that can help make the product better down the line. The possibilities are sort of endless.

Radia: Yes, they are. That is correct.

Chang: One of the other things, as you are seeing disrupters trying to disrupt industries that haven’t been traditionally disrupted, like Square is not a Visa or MasterCard. Apple and Google are getting into cars. Where does that—do you watch them? Are you watching what Google is doing with the self-driving car? Are you listening to Apple?

Ross: Absolutely, because those are—those companies have close relationships with a lot of our customers. Our customers bring their devices into our cars. It’s something we have to work on. On the one hand, we have to make it easy for our customers to use the devices they bring into their cars and we have to do that competitively; but we also think the car is a device too, and it has its own needs and value to be connected with the rest of the system.

So we don’t view ourselves as being in competition with the phone the customers are bringing in. We view it as additive, and being connected allows us to do things because of the better access to the data on the vehicle and our better ability to design services just for use in the vehicle. We can do things that are not as easily done just with your phone.

Mandel: Let me just add something to this. As the car delivers more value, people will buy more cars. As people buy more cars, that will generate more jobs. So there’s a link between this conversation—usually people think about technology as being job destroying, but as the innovation spreads out from the tech sector and to other areas of the economy, what you are going to see is job creation rather than job destruction, because it’s very clear.

Chang: It does both. So the question is, does it create more jobs than—

Mandel: What we see is the tech industries have been adding jobs. The places where you have actual innovation creates jobs, so as the innovation spreads to other areas of the economy, it becomes job-creating.

I’ll give an example that’s not Internet of Everything, but was mentioned earlier. If you have what’s going on in the gas shale area, was innovation. And it’s been job-creating there. Anything that you can do that improves the quality of the product potentially improves the demand and potentially creates more jobs.

Suppose that his product spreads and he becomes very rich.

Chang: Which is what we hope for you.

Mandel: Remember the little people, okay. Let’s suppose that happens, then what you are talking about is the creation of lots of jobs in that area, that didn’t exist before, transformative in a way that hasn’t happened in agriculture, in food creation. So part of what we are seeing is this may—the Internet of Everything may bring in an era of job creation rather than job destruction.

Radia: I agree. The research we did—and I’ll tell you the answer, then the meat behind the research. But two-thirds of the 7,500 people that we researched when we did part of our 14.4 trillion, two-thirds of them said the jobs will stay the same or increase. So clearly, clearly—and just to sort of make a point about the 7,500, it is a relevant number because the closest survey, it’s a large number; it was done with 12 countries, which represent 70 percent of the GDP of the world. So what’s relevant about that number is the second biggest survey, one of them done by IBM—they do a great job—is the CEO survey, and it’s 1,200 people. This was 7,500 people, 70 percent of the GDP, 12 countries, and 17 different job types. Bottom line: two-thirds of them are saying jobs will increase. So I think that’s really evidence to support what Michael is saying.

Chang: Michael, you mentioned the more people who buy cars, the more jobs are created. One thing I didn’t realize is that I guess young kids want to buy phones and computers and they’re not saving up for cars like they used to. And part of what companies like GM and Ford are doing is to try to make cars cooler to get teens back interested into buying cars. How do you make cars more connected and better but also affordable?

Ross: And there are changes going on. It’s not going to be necessarily the same answer we had in the past generations. Part of the demand is more connectivity. Part of it is there will be different business models. Car sharing is a growing trend, and you need connectivity to make sharing work and make it work well.

Chang: That’s worse for GM, isn’t it?

Ross: Maybe and maybe not. It depends on who does the best job of making the cars compatible with those kinds of systems and makes the most connectible to those kinds of systems. We are finding some advantage with some large fleet owners because our cars are more easily connectible, we can do things that our competitors can’t, or can’t do as easily or as low-cost. So it remains to be seen, in my mind.

I wouldn’t be as optimistic to say it’s universally good. I think it will be disruptive in some places, but generally I think we’ll create more value.

One live example we have—OnStar has 6 million customers. It employs several thousand people in our call centers every day.

Chang: I like that Harry Crane commercial about OnStar, narrated by Harry Crane—the character is Harry Crane of “Mad Men.”

Ross: Yeah. It’s done a good job.

Chang: OnStar is a perfect example of more possibilities remotely. Explain—

Ross: 150,000 calls a day from our cars, we unlock 2,000 cars a day, door locks. People are always surprised by that amount of volume we have. Our remote application, it allows people to remotely check diagnostics, check fuel status, do remote starts, all from a smartphone app, which you can only do if the car has its own ability to connect.

Chang: Why would you want to start your car remotely?

Ross: You’ve never lived in Michigan, have you?

[LAUGHTER]

Chang: I still don’t know.

Ross: When it’s 10 degrees outside and you have 10-minute walk to your car. Remote starting it from your office as you lock your office door and walk out to your parking deck—

Radia: One thing we like to think about in this sort of dialogue we are having now on connecting things is when we work with customers, it’s often how do you get the creative juices flowing. We talk about lighting up dark assets, things that you don’t have access to today.

If you are a retailer, it might be what would you do differently if you knew how many cars were coming into your parking lot. For General Motors, it might be what would you do differently if you lit up the traffic light or the roads. Just some interesting ways to think about the journey to the Internet of Everything.

Ross: The traffic light can know the car is coming.

Mandel: On the local level, you can have smart trash cans. The smart trash cans can tell you when they are full and empty so the municipality can send the trucks just to the ones that are full, which both makes improvement to the service, because you don’t have overflowing trash cans, and also saves fuel.

One thing you see with this—there’s a lot of potential for sort of conservation, because you can actually see where you need to sort of run trucks or where you need to use energy, and it has an enormous energy-conservation capacity.

From the point of view of policy, policy both on the federal level and local level, the Internet of Everything is going to turn out to be one of the tools that enable economic development and really improves the quality of life on the local level in terms of delivering services, because right now, if you are a city or municipality, the Internet helps, but it doesn’t really get at what you need without a lot of extra information.

Let me give one more example. The city of Fort Collins in Colorado, where they are having all this horrific flooding, what they did a few years ago is they put in a bunch of remote rain gauges and stream gauges, and then they put them on the Internet, and then they put them on smartphones. So now all of a sudden there’s a connection between what’s happening in the real world—the information goes right to you, and presumably we’ll find out whether or not this helped people sort of deal with the flooding better. There’s no way to tell now, but this is exactly what it was designed to deal with.

Chang: Amit, how much does a Bitponics’ system cost?

Kumar: Resale $400 or $500, which is very competitive with other manual hydroponics.

Chang: Is that no matter the size of your garden, no matter—

Kumar: Right.

Chang: One-time investment?

Kumar: Yeah. That’s the cool thing about hydroponics. You can have any size reservoir powering any size garden. You could have a large-scale garden powered by a single 1,000-gallon reservoir. Measuring that single point allows you to know how the entire garden is doing.

Chang: Part of the vision is for people in New York City and cities like Detroit—they could have a garden in their home?

Kumar: In the apartment. I live in a small, Brooklyn apartment. That’s how I got into it. No outdoor space for a garden. And I wanted to be able to have a garden, grow some of my own food in my apartment. And hydroponics was a step to getting there, because you can use your space a lot more efficiently, you can use a lot less water, a lot less nutrients. You can play with form factor better, so you could use a vertical garden, which is not so easy to do with soil. And it’s also much more automatable, because you are creating the entire growing environment. You can plug your lights and your pump into this automation device, and really have the intelligence of the Internet brought to bear on helping you grow your garden.

Chang: Greg, I want to talk about maps in cars. Have you heard of Waze? Have you used Waze?

Ross: Uh-huh.

Chang: Google bought Waze for $1 billion. I use Waze every day and I have a navigation system in my car, but now Waze is better.

Ross: Great example of why your car needs to be connected. One of the frustrating things is the data is out of date within months of buying a car.

Chang: When is my car going to have Waze in it or updated—

Ross: You need your car to be connected to report its location as a participant in the Waze network—if you want to go to Waze and you also have a need and ability to get the latest point of information loaded into your car, so you have the latest information. You will see significant changes, particularly in navigation.

Chang: What kind of things? Can you tell us what—

Ross: One thing, just getting at pretty clearly, you are not going to have the same need to carry all the data around with you and you won’t have the need to update it in the same way you updated by plugging a DVD. The data will always be fresh because you are always connected to the latest data and you are contributing data to the system in a way that makes it lower cost to bring it to everybody, which is a little of what Waze demonstrates on a certain scale.

But scaling that to everything and getting to the city management thing, there’s going to be a lot of incentives to plug into municipal systems that can tell you about availability of parking, traffic patterns.

Mandel: Also, if something goes wrong, what is the best alternative route? That’s something that has to come not just from the Waze system, but has to—something that the local municipality has to get involved with to say, okay, it’s better if everybody goes this way.

Chang: But, obviously, municipalities, governments, they move so slowly.

Mandel: That’s the thing. There’s going to be a competitive advantage for local governments that can move faster and embrace this. This is about if you get to the heart of the Cisco vision, which is the data, the processes, the people, and the things—the more you can integrate, make real-time decisions, the better off you are going to be. And in some sense, we are learning how to gather the data, process the data, and then figure out how to use the data. It is an order of magnitude higher than what we are doing now, because there’s so much more data involved in dealing with the physical world.

Kumar: The other thing with the Internet of Things is that, for example, cities don’t need to do the full stack of creating a service. New York City has actually done this thing they call New York City big apps; what they do is expose all the city data through APIs and let software engineers just have at it. So they build one piece of it where they expose the data and they let the New York City engineers, like, create the services on top of that.

Ross: That’s what exciting about the developer community. You will create things by putting together, mashing up different data sources. We had a group of kids that were all learning how to drive, 15-, 16-year-old kids came to our events, gave them our software development kit. They put it together with two or three other data sources to create a learning-how-to-drive app that was relevant to them that allowed them to log their time, which is an important problem for them, time driven day and night, allowed them to consult local speed limits, because they were concerned about not breaking the speed limit, and videos for I can’t remember what they told me—about how to parallel park and they would pull down a parallel-parking video.

Chang: If my car would parallel park for me—I know some of them do, but I haven’t actually tried it out. One question for Greg, then I want to take it to Vishakha, but on Waze, why wouldn’t a GM or car company buy Waze? I know it’s expensive. Why wouldn’t you buy it? Is there a philosophy about innovating from within versus without?

Ross: Our view is our first priority; we are in the car business, we’re trying to make better cars, so our higher priority is how to we make the best use of a service like Waze versus anybody else, so how can we add data to it, how can we make it more usable in the car? Those are the priorities for us. Our view is if our cars are more enjoyable to own, easier to drive, lower cost to own, that’s how we win. And the services are a means to that end and we—OnStar is an example. We are in the service business also to a degree, but it starts with how do we make a bet car and how do we make a better car sooner than everyone else does? That’s how we win.

Chang: Cisco on the other hand does make a lot of acquisitions, and what is the strategy there in terms of when you realize look, we can do better if we just buy this.

Radia: We continue to take a look at what’s going on out there. I mean, we clearly see the Internet of Everything as the next huge market transition, only 99.4 percent of all the possible things out there in the world are connected today. So that’s a whole ton of things that are not connected that are going to get connect and the network’s going to be key. Clearly we are looking at a whole host of acquisitions.

Chang: Do we have any questions yet? There’s a microphone?

Mandel: There’s a microphone over there.

Humphrey: Andrew Humphrey, WDIV in Detroit. On the developer aspect of things—this is for the all panelists, especially the business panelists—when you come up with the idea or utilize developers out there, what conversations are you having with your legal department regarding liability and regarding ownership of patents or trademarks or copyrights?

Ross: I can answer our part of it. I’m sure you have a perspective on it too. This is a new space for us, so we have to think hard about how to design systems so they are secure, so our developer or our application environment is secure. We have to make sure we are handling people’s intellectual property carefully, so we disclose to people what they are doing when they submit their information, what they are signing up for. That’s important. We learned that from other industries, cellphone industries and so forth.

And safety and security, we have been working really hard. This is a space—the first priority is driving the car safely, obviously. It is not doing distracting things, so we are working carefully with the rest of the industry to establish standards for safe use of applications and content in the vehicle. And in fact, we think we are going to be making our services safer than the alternatives than people are using today. So people are consulting Google Maps this way, or if they are playing with their phone to get music services down, we think we can do things to make similar uses safe. And our software development kit actually gives developers guidance as to how to do it in a way we think can be done in a non-distracting way, something we thought a lot about.

Kumar: Regarding the liability—

Chang: Were there previous patents for online gardening?

Kumar: No. We have a patent pending, yeah. Just part of having your defenses up for being a startup nowadays.

Mandel: If you think about the relationship between app developers and Google, before the app store, it was actually harder to figure out how to answer a question like that, but now there’s a clear separation in layers between apps that run on top of other layers. So if you think about apps running on top of cars as opposed to smartphones, then you’ve got an interesting division. The security question is very important these days.

Chang: So let’s address that question. How do we connect everything to the Internet and make sure that our data, our information is safe? In the world—in the age of the NSA and many reports of government spying, and not just spying but working with tech companies, reportedly, to get our information. Who wants to take a stab at that one?

Radia: Certainly, as you all know, we are the networking company. Certainly, you know we are addressing security in our solutions in software in a very big way. What’s interesting to me—as we obviously innovate internally as well as do acquisitions. But when we innovate, with not just being able to instant message with another person, but with another device, we are absolutely paying attention to the security of that connection. Because that is not something you want anyone else to mess with.

Chang: I found it quite shocking that Cisco wasn’t on the list of nine companies that are supposed to be associated with PRISM. Given that Cisco owns networking and video conferencing—

Radia: Stay tuned.

Mandel: One of the interesting questions—you don’t want anyone to be able to take over your car. I’m sure that GM and the other car companies are paying very close attention to that. And I think this becomes a distinguishing feature between different companies. What you will see is the ones that pay attention to security and provide a good connected product are the ones that are going to do well. And there’s going to be a lot of issues around this in the coming years and we’ll figure it out, the same way we figured out other stuff. So it will turn out to be an issue, it will turn out to be a bar that distinguishes some companies from others, and you will end up using companies that you feel secure with. And that’s really kind of the bottom line. There’s an incentive—there’s not an incentive to put out insecure products, and especially if you are an Internet-of-Everything world.

Chang: If you have a question, just come up to the mic. Greg, do you worry about cars being hacked?

Ross: Sure. There’s people out there already that you can find YouTube videos and others, people showing things they are trying to do to hack vehicles. And yeah, we have to be as concerned about that as anyone and in some ways more so, because the car is a 2,000-pound machine and could be dangerous if someone is messing with it, so we are concerned with it. It’s one of the things we think a lot about when we say we are opening our developmental environment. Our certification processes require we do a lot of security checks to make sure we are controlling for that, but it’s certainly something we have to watch for. No different than anybody else, and probably more so.

Chang: Question.

Kushner: Eric Kushner from Compuware. I think of connecting all these devices to the network, and I wonder, who foots the bill for it? Is it the service provider? Does the consumer carry the connectivity into the device in the case of the car? I think of throttling of traffic. Netflix, there’s some precedent there. How does this all work? What’s the economics behind it?

Radia: I think it goes back to the value, goes back to who is going to get the value out of it, who is defining that critical business and IT initiative that recognizes very clearly this is a use case, this is a critical problem you are solving, here’s how the Internet-of-Everything solution, maybe combined with collaboration, helps you address that problem and what’s the metric that’s impacted that actually helps you quantify and justify your investment, but it all goes back in my mind to the value.

Mandel: One more thing, the cost of some of the pieces of this is going way down. If you look at your smartphone, your smartphone contains all these sensors in it, including ones you probably never use. At least mine contains—it does magnetic fields, it does light, it does sound, like a list of about 15 sensors in it. The cost of doing these sensors is getting less and less, and the data-processing capability of dealing with all this information, even a couple of years ago, would not have been easy to do. It is getting easier an easier all the time, so I think what you are thinking about here is that the cost is falling at the same time that what we can do with it is rising. I’m sure if we track the cost of the electronics in the car versus the capability, you would see the cost per capability has been falling. And that’s where we see—whether or not you could have built your device five years ago is—the technological frontier is rushing forward very fast.

Kumar: I think what he’s getting at, though, is the fact that this is a continual service you are providing, not just a one-time build, so how do you pay for continuing service of storing the data, providing real-time alerts, and whatnot. The user is based upon that data—that’s a great question. There are sort of two ways you can go. One is to ask the consumer to pay for that, as the service, or you can monetize that data, sell it to third parties as big data or run advertising based upon that. It is a giant new data stream that you have, where you are learning how users are interacting with their world. So it is a brand-new venue for data that can be monetizable.

Ross: I don’t think there’s a single answer for our industry any more than there is for a lot of other industries that are working through the right business model for this. We think there’s several and we’ve touched on them. And it depends on who you are trying to serve. If it’s a service like the customer wants to stream a movie to their back seat, well, that’s probably not going to come with the car. That’s a lot of money to do that. We know customers want to do that. There will be a way to do that. On the other hand, we may want to make sure data is available to the car if we want to be able to do diagnostic checks for some sort of urgent service issue, so we will pay for the data, because it is important to us to keep the vehicles running the way we want them to run and make sure we meet customers’ expectations, so there’s no single answer. There are third parties that are interested in paying for the data, then we have to get into let’s make sure we are balancing correctly. Should we be doing that? Is the customer willing to share that data? That’s something we didn’t touch on before, but one thing is make sure the customer knows what data is being shared, and it’s their data and that they are making a choice to share it or not to share it.

Chang: Question over here.

Foster: My name is Evan Foster. I’m a full-time student at Wayne State University in business information systems management. I know one of the main questions that comes up is security. And for me, I’m always eager to get more and more technology, and if I talk to my grandparents, they are terrified of it. So I’m trying to figure out, how do you get past those barriers to entry and prove to people your stuff is secure. We talk about how you make it secure, but how do you prove it would be secure and all your information is secure?

Radia: It’s a great question.

Ross: You’ll probably never prove it to everybody, I’m sure.

Kumar: You have the green padlock on your address bar in your browser.

Mandel: It’s how much are you willing to pay for the security. Highly secure, medium secure, how valuable is your data. And then there’s a reputation effect, which is that if you are dealing with reputable companies that have a reputation to lose if something goes wrong, then you can feel better about it.

I’m not sure that your parents or grandparents really care that much about security, per se. Part of it is about wrapping their mind around what the new capabilities are, and that’s just a tough one.

Chang: On that note, do you think that you are going to reach more people simply as younger people get older, or do you think you can actually convert less tech-savvy people and generations—

Ross: It’s about execution. If you do things well.

Radia: My mother is using email and Facebook, so I think that’s a good sign.

Ross: Need to do things well, make them easy to use, make them invisible. Technology is best when it’s not seen or when it’s not obtrusive. I think that’s where we need to get to—it’s obvious that I should be using this, because it is a much better and convenient way to do things, to take care of my day.

Chang: What’s the most important demographic for GM? Who are you targeting?

Ross: GM is a broad-market company, so we’re selling to the whole car-buying public, so we are anxious to—

Chang: Do you want to get in on the ground floor? Do you want to sell a car to a teenager, someone in their 20s, so they that like the brand and then want GM for the rest of their car-buying life?

Ross: Sure. We want to get to where some of those buyers are, in the connected life. We talk about trying to connect cars to people’s digital lives. People have a digital life, and they expect it to continue when they get in the car. That’s part of what we are building too.

Chang: What about Bitponics? I’m assuming it’s more of a niche consumer, but my guess is you want to go big? But who is going to buy this?

Kumar: We got one customer. It’s definitely a roadmap of developing who we can sell this product to. Initially, it will be hydroponic growers that want to automate the way they currently grow. Currently, people do things manually. They have manual sensors, jot them down in a spreadsheet. So it’s the existing growers who want to automate the process, but the mission is to use technology and make it possible for everyone to have a garden in their home, no matter what kind of space or what kind of skill-set they have.

The mission is to make it possible to have the Internet help you take care of your garden to where you don’t necessarily need to read books on gardening and have that knowledge personally. You can benefit from somebody on the Internet creating a grow plan for you that you can use, so that a novice can have a thriving garden in their apartment.

Chang: How can the Internet of Everything help a place like Detroit?

Mandel: I think Detroit is one of those examples—it is a place built on physical industries, which have not been benefited that much by the Internet. There was an earlier discussion about urban farming here. There’s an immediate connection between urban farming and then sort of being able to automate it. There’s a connection between transportation and being able to sort of get buses to where you need them on a more efficient basis in a very large area. There’s an immediate connection between how do you deal with crime in terms of getting a connectivity between information you have on the local level and being able to connect it up. And most important, which we haven’t talked about, the link between the Internet of Everything and education.

Right now it is very expensive to sort of train people for mid-skill level jobs. It has to be done manually. What the Internet of Everything does is potentially enable you to lower the cost of training and bring more people into the workforce. Cisco has a great example, which I referenced in my paper of a network basketball. It’s a basketball that had lots of sensors in it, that could potentially be programmed so that it would teach you how to shoot a basketball, give you immediate real-time feedback.

Translate that into the world of training somebody how to use a machine or training somebody how to use up-to-date equipment—expensive to do in the schools, and you have a different model of education that doesn’t just apply to high-end distance learning, but applies to the training of people to do the sort of jobs that we need people for right now.

And so this is one step beyond where we are right now. But if you think about any time you have an interaction with the physical world, the Internet of Everything could help you in ways you don’t actually understand right now. So if I look at a place like Detroit, it has to deliver better services at a lower-cost Internet of Everything.

Chang: Are we ever going to have everything connected? Will we ever get there, where the Internet of Everything is real?

Radia: Absolutely. There’s going to be so much value for doing that. If you don’t participate in that, I think it’s going to be challenging.

Kumar: It’s a matter of the components getting cheaper and smaller and able to be embedded within everything. There’s no reason not to have intelligence in everything that’s around you. And one of the points that I wanted to bring up is that the Internet of Everything makes it possible to have humans do what they do best and have technology do what it does best in everything around you. So technology does the stuff that’s repetitive, rote, menial, robotic; and humans can move into the more creative, larger-scale endeavors.

Baldesancho: Mine is not actually a question. It’s more of a response. I’m Judy Baldesancho. I own a startup company called Health and Ideas. Really, the reason I founded my company as a virtual company is I am a director of an eight-member organization. My specialty is physical therapy, sports medicine. And I’m also the clinical director of Special Olympics right now.

We do doctoral programs. A lot of my students are 21 and under; but a lot of that—academic ACCE’s, they’re at 60 years old. I am at 40, so I’m kind of like a conduit to them, so I think it’s not being—really for the past five years, I would say, I have been using technology to train my students. It started with I had a student from University of Michigan, Flint, and when I was still practicing my clinical practice, it was in St. Clair Shores. I hate driving, so I said, if you can go online, Skype, email, we will work on this evidence-based project for six months using technology, and the university allowed me to do that.

So then after that, I’m like, you know what, I’m going to use technology for grading my students and training them. So, like, now, when I do my Special Olympics, a lot of my teaching is done by YouTube. I got Special Olympics to say we are analyzing all this data. I have done it manually for about a year, and I’m not going to do that. Let’s use the computer. And I’m not going to send out all these mails to all these universities in Michigan to train you guys. That’s a lot of work for me, being a volunteer job, aside from my other job.

So all of those are happening, but it’s not being broadcast. It is not on television. We are doing it. It’s just not out there, and really I don’t think I can help eight organizations without my smartphone. And really I think I cannot run this company—it’s a continuing-education seminar company for sports medicine—without technology. I can have data on my smartphone or any terminal, virtual terminal.

And so that’s the reason why I’m here. A lot of attendees are from the Internet—from the IT world, some from education, but I’m trying to bridge the gap, I guess is what I’m doing. So thank you for using this session, because, really, technology is not just about computer. It’s utilizing the people and how you are going to use technology to really make your life easier. So thanks for this. It is the best topic so far for me.

Chang: Thank you. On that note, so obviously, technology has made millions of things possible. It’s given us more flexibility; it’s enabled us to be more productive, but is it possible to have the Internet of Everything without losing something? Is the Internet of Everything always better? Is it better for my garden to be connected in every circumstance and situation? Do some plants just need to be held?

Mandel: Can I give you an example? Suppose you lived in a little town that had no road connection to the rest of the world. And it’s all kind of isolated, and somebody says we are going to build a road so the cars can run to your road. Some people will oppose that because it will change the culture of the town, and it will change the culture of the town. But the fact of the matter is, one of the things the Internet of Everything is going to give us, it’s going to give us faster growth and maybe—and it’s going to give us more jobs, and in the end, that’s kind of what we want.

Chang: It will give this town many more things, but will it lose something too?

Kumar: So what the Internet of Everything is doing is eliminating the repetitive, rote tasks. And my question, is that something that you really want to do? I would rather have that get taken away. I think that’s a net benefit.

Chang: But the more technology makes possible, the more we’ll push the boundaries. Maybe it’s just not the repeat. Maybe the computers start to do some thinking for us. What Google is trying to do is trying to do with search is it’s trying to anticipate what we want. It’s not just giving you a list of results. It is giving you a list of results for you personally, right? It certainly changes discovery—

Mandel: At every step along the way of technological change, there’s always something lost and something gained. The fact of the matter is, right now, we, and the developed world in general, sort of face this enormous problem. We have slow growth; we have an aging population; we are heading towards fiscal disaster, unless we change something about the equation.

And the part of the equation we have to change—we have to increase productivity in manufacturing, in transportation, in health care, in public services. If we don’t do that, we will have a much meaner life—I don’t mean in a good sense—10 or 20 or 30 years from now. This is an essential part of getting us out of the trap that we are in and moving forward into a better world. Will we lose things? Things will change. That’s probably the best way of putting it.

Chang: A perfect example is driving a stick shift. People still drive stick shift, like they want to. They like it. So it’s sort of analogous to what I’m talking about. Can we maintain, can we give the people who want to drive stick the ability to do that, but also still connect to everything?

Ross: That’s a great example of how—the best answer is to give people choice. People that want to drive that way and drive for the enjoyment of being that much more connected to the road. I understand that, and that is a choice people have available to them. But an awful lot of people prefer not to have to do that in stop-and-go traffic, and the majority do, and those choices are available.

And I think the same answer here is it’s informed, it’s choice. You had the opportunity to do these things, an opportunity to redirect your time to something that you would rather do. Or if you would rather dig in the garden with your hands, then I suppose it’s not going to get in the way of doing something like that—

Radia: Because of the link to value, it is always—I mean, this is about not just prosperity of Detroit; it’s the U.S. I mean, I was amazed when I looked at the research, because it actually showed that—I think it was China and India that were just more—as you sort of looked at the respondents and who replied and how those countries are just hell-bent on the Internet of Everything is absolutely going to take us at warp speed to where we need to go.

We are about to release the new research—the research we did was just on private sector. We are about to release the research on public sector, but I think we can’t afford not to do this, and to prioritize this from a political agenda, business agenda. We have to go after this value.

I’ll tell my little personal story. I’m Indian, born in Africa, raised in England, and I live here. A lot of my family has worked really hard to get us to this great place, so I hope that we embrace the challenge ahead of us. I think it’s going to be fun.

Chang: And just a few more minutes.

Radia: I just wanted to say, if anyone is interested in the Cisco point of view on the Internet of Everything, we have thumb drives for all of you that we’re happy to give you.

Chang: So the rest of you give quick closing thoughts; something really profound. No pressure.

Mandel: Something really profound. The only thing I would say about that is people worry about whether they should be optimistic or pessimistic about the economy going forward. And one of the reasons to be optimistic is, in fact, the Internet of Everything, because you can see the way that it can transform some of the areas that bother people the most.

And so in this debate about where we are going, what the future is going to look like, whether or not this technological change that could make a difference—here’s an area where you can see where’s something we can do that is coming on the horizon that can make a very big difference politically, fiscally, standard of living, and thinking about whether or not we are going to all be able to sort of age gracefully or not. So that’s the context you have to think about. Each of these things are pieces of a larger picture.

Kumar: So the Internet of Everything, I think, is really the next wave of technological development, as the other panelists have talked about. The new world is going to be the world that’s created with intelligence and logic within everything that we create. And what we have seen so far with the Internet has been really the Internet of people.

We have seen things like Wikipedia get created just by accumulating the knowledge that exists in people’s heads. And what the Internet of Everything is going to bring online is the intelligence of everything that’s within every physical thing in the world. And so I think that bringing to bear the combination of human intelligence and machine intelligence is going to be a super-exciting thing to see come out of this.

Ross: And I’m confident that this is going to be a big part of General Motors’ future and the future of the auto industry. And being a long-time General Motors employee, but also a long-time Detroiter, I am also excited about the potential for this to help regenerate this city and this region.

Our company and others, through innovation, built this region. We have been through some difficult times, obviously the last several years, but I believe that this is the next wave of innovation. It is an investment we are making on that belief we’re going to have an ability to make our cars and our company that much more prosperous, and we think there’s a great opportunity to extend that to this region and help build the region through a new wave of innovation and using this technology.

Mandel: This is transformative, not just for the car companies, but for all the companies that grow up around the car companies. When we did an analysis of the app economy nationally, we were surprised to see an enormous growth in the Detroit area in terms of app developers, and a lot of this was companies flowing out to take advantage of these opportunities.

So you can actually imagine that this is an essential part of the rebirth of this area, built around not just the car companies, but all the companies that have different types of suppliers than we had before.

Chang: All right. Well, Vishakha Radia, Michael Mandel, Amit Kumar, and Greg Ross, thank you all for this really fascinating conversation and showing us a window into the future. Great job.

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