During this next era of connectivity – product connectivity – manufacturers and service companies will communicate with their products without any real involvement on the part of the end-user. This will bring significant benefits for suppliers and their customers, and cause a major business inflection point.

Imagine any product or appliance you know being Internet-enabled – your home appliances, your automobile, your office coffee-pot – with all key characteristics and diagnostics available for review and adjustment on-line. Your cell phone is already Internet enabled, and you could use it to check whether your car is secure, your garage door is closed, or your coffee-pot is still on. And you could correct any problems remotely.

Skeptics think that this kind of "gadgetry" has few practical applications (do I really need to talk to my washing-machine?) But, beyond the cute perks for techo-geeks, it's not consumers or end-users that have the most to gain from device networking — it's the manufacturers and service providers.

Internet-connected PCs point the way

Hundreds of millions of online computers using Windows automatically report errors when they occur. The discovery of continually occurring new software bugs and security holes forces Microsoft to provide regular free updates via downloadable “service packs”. Doing this via physical distribution of software upgrades via conventional media is unthinkable.

What has already become commonplace with connected computers will soon emerge as an important service extension for most industrial (and high-end consumer) products and equipment. Everything will be networked, not just as a cute “feature”, but as an important part of operating characteristics.

Paradigm shift

A networked product continues to generate significant information value over its lifespan. Beyond just marketing information, manufacturers can use their connected products to develop new services-based business models, with the potential to drive growth. The manufacturer not only knows where the device is located and when it was installed, but can monitor operating data in the actual environment, including error-codes generated and results of diagnostics. This information can result in tremendous time and cost savings for both the manufacturer and end-user, yielding vastly improved levels of operating reliability and customer service. Beyond that, there are innumerable benefits for marketing efforts and product usage analysis.

From this type of use of the Internet, product and equipment networking will bring totally new portfolios of information tools for managing the vast, ongoing streams of device-generated data. Large opportunities will arise for software companies that provide application suites to crunch the huge volumes of data and extract meaningful and useful business intelligence.

The Pervasive Internet is here

The eventual goal will be to network devices that are self-sensing, self-controlling, and self-optimizing automatically, without human intervention. This represents totally new applications for information technology and telecom which will totally subsume previous business models.

The availability of real-time, networked equipment data brings totally new meaning to the term “disintermediation”. When a company makes networked product that send real-time information, the company owns access owns access to the product, and a primary link to the customer. Now, no third party can sell profitable services to that customer without access to the diagnostic or status data coming from the networked product. The human link will be bypassed and a new rule will come into force: "The one with the most networked equipment wins."