Monthly Archives: February 2014

Improving efficiency: Beer Enters The Internet of Things

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Key Points:
  • A startup is looking to save restaurant staff repeated trips to the cooler to check beer quantities, which can be an especially onerous task for large establishment.
  • SteadyServ will help save time and reduce over-ordering compared to the traditional “shake the keg” method.
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Wall Street Journal
February 21, 2014

Strange Brew: Beer Enters The Internet of Things

A startup is looking to save restaurant staff repeated trips to the cooler to check beer quantities, which can be an especially onerous task for large establishments where it’s not uncommon to have 30 or more barrels of brew. SteadyServ Technologies LLC outfits kegs with sensors that monitor beer levels and let managers know when it’s time to tap a fresh keg.

The Indianapolis-based startup is an early mover in the so-called Internet of Things, which refers to the idea of embedding Internet-connected sensors in everyday objects.

Although still in early stages, the Internet of Things will generate more than $300 billion in revenues by 2020, according to researcher Gartner Inc. SteadyServ is looking to tap a niche of this potentially huge market — The Internet of Beer.

With roughly 200 million kegs sold in the U.S. each year, “draft beer is insanely profitable,” said CEO Steve Hershberger, who in 2009 co-founded Indianapolis’ Flat 12 Bierwerks. But figuring how much beer is left in a keg is a tedious, manual process. Typically, managers will go to the beer cooler, often located in a “beer cage” in the basement, and begin shaking kegs to estimate how much beer is left. They write down estimates, such as 30% or 40%, for each container. They tally their beer inventory and place their order via phone or with a sales person making his rounds.

To automate this process, SteadyServ created the iKeg sensor, which resides in a round metal disk that restaurant managers place at the bottom of each keg. IKeg monitors the weight of the keg to within a few pints, tracks the date and time, and sends this data wirelessly to SteadyServ’s inventory management software, hosted by Amazon.com Inc.’s Web Services.

SteadyServ pushes a summary of that information to an application on the customers’ iOS or Android mobile device or PC. The summary includes pie charts that display most popular and least popular brews, beer depletion rates over time, and other information to help customers keep tabs on their inventory. Customers can also use the app to replenish inventory from distributors who use SteadyServ.

SteadyServ is emerging from beta this month. But for about a year, Ryan Kellerman, director of beverage hospitality at A Pots & Pans Production, an Indianapolis-based restaurant management company, said SteadyServ has helped him save time and reduce over-ordering at two of the six Scotty’s Brewhouses that the company manages. He said that he previously had about $2,000 worth of excess draft beer on a weekly basis — thanks to the traditional “shake the keg” method. SteadyServ’s accuracy enables him to purchase just what he needs. “It’s helped us control our inventory levels tremendously,” Mr. Kellerman said. Eventually, he plans to add the service to the remaining four brewhouses.

Although SteadyServ is just becoming broadly available, the company is preparing to put something new on tap in a few months: integrating with point-of-sale systems. Mr. Hershberger said this service will enable SteadyServ to calculate how much customers are spending on beer, and provide customers real-time insight into whether they are under or over-ordering certain beer brands. “We’ll be able to give you all of the intelligence on, and manage, inventory across all of your distributors,” said Mr. Hershberger.

SteadyServ also automatically sends messages to social media feeds of bars and restaurants. Customers who follow those establishments on FacebookFB -1.49% and TwitterTWTR -1.25% will see status updates telling them  that they’d “better hurry in because there are only 14 pints left” of a certain draft beer, he said.

Virgin Atlantic first in world to use Google Glass

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Key Points:

  • Virgin Atlantic, is the first in the industry to test how the latest wearable technology, including Google Glass, can best be used to enhance customers’ travel experiences and improve efficiency.
  • Passengers are greeted by name and Virgin Atlantic staff wearing the technology will start the check-in process.
  • At the same time, staff will be able to update passengers on their latest flight information, weather and local events at their destination and translate any foreign language information.
  • In future, the technology could also tell Virgin Atlantic staff their passengers’ dietary and refreshment preferences – anything that provides a better and more personalized service.

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Virgin atlantic first in world to use Google Glass

Breaking Travel News February 12, 2014

Virgin Atlantic passengers will be the first air travellers to experience the benefits of pioneering Google Glass and Sony Smartwatch technology as they arrive at London Heathrow airport, in an innovative pilot scheme which starts today.

Concierge staff in the airline’s Upper Class Wing will be using wearable technology to deliver the industry’s most high tech and personalised customer service yet.

The cutting-edge technology is being introduced as Virgin Atlantic publishes the results of a major study of 10,000 airline passengers from across the world on the future of air travel.

The results show that as the number of people travelling by plane has sky-rocketed in recent decades, the experience has lessened.

Virgin Atlantic is joining with passengers and calling on the industry to introduce more innovations and radical fresh thinking to meet sky-high consumer expectations.

Virgin Atlantic, in collaboration with air transport IT specialist SITA, is the first in the industry to test how the latest wearable technology, including Google Glass, can best be used to enhance customers’ travel experiences and improve efficiency.

From the minute Upper Class passengers step out of their chauffeured limousine at Heathrow’s T3 and are greeted by name, Virgin Atlantic staff wearing the technology will start the check-in process.

At the same time, staff will be able to update passengers on their latest flight information, weather and local events at their destination and translate any foreign language information.

In future, the technology could also tell Virgin Atlantic staff their passengers’ dietary and refreshment preferences – anything that provides a better and more personalized service.

During the six-week pilot, the benefits to consumers and the business will be evaluated ahead of a potential wider roll-out in the future.

Virgin Atlantic’s new solution replaces an existing process for serving passengers traveling in the Upper Class Wing, the airline’s premium entrance at Heathrow dedicated to Upper Class passengers.

Airline staff are equipped with either Google Glass or a Sony SmartWatch 2, which is integrated to both a purpose-built dispatch app built by SITA and the Virgin Atlantic passenger service system.

The dispatch app manages all task allocation and concierge availability.

It pushes individual passenger information directly to the assigned concierge’s smart glasses or watch just as the passenger arrives at the Upper Class Wing.

Dave Bulman, director of IT, Virgin Atlantic, said: “While it’s fantastic that more people can now fly than ever before, the fact that air travel has become so accessible has led to some of the sheen being lost for many passengers.

“Our wearable technology pilot with SITA makes us the first in the industry to test how Google Glass and other wearable technology can improve the customer experience.

“We are upholding Virgin Atlantic’s long tradition of shaking things up and putting innovation at the heart of the flying experience.”

Virgin Atlantic continues to push the boundaries with other technological advancements with SITA, including testing iBeacon with its Upper Class passengers at Heathrow, a new low-powered Bluetooth transmitter that can notify nearby iOS Apple devices of nearby services, discounts and updates on their flight boarding schedules.

In addition, Virgin Atlantic’s newly enhanced mobile site means passengers will be able to book flights, check in online and check their flight status on the move, while also having access to the vast range of information on the main website, including destination and airport guides as well as details of baggage allowances and much more.

The Internet Of Things Is More Like The Industrial Revolution Than The Digital Revolution

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Key Points:
  • As the Internet subsumes physical objects, the rate of change is accelerating.
  • Stogdill believes these converging phenomena have put us on the cusp of a transformation as dramatic as the Industrial Revolution.“Everyone will be affected by this collision of hardware and software, by the merging of the virtual and real,” he says.
  • “Everyone will be affected by this collision of hardware and software, by the merging of the virtual and real,” he says. “It’s really a watershed moment in technology and culture. We’re at one of those tipping points of history again, where everything shifts to a different reality.
  • Data will literally grow physical appendages, and inform industrial production and public services in extremely powerful and efficient ways.
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Forbes 2/10/2014

How The Internet Of Things Is More Like The Industrial Revolution Than The Digital Revolution

By Glen Martin

Philadelphia’s Centennial Exposition of 1876 was America’s first World’s Fair, and was ostensibly held to mark the nation’s 100th birthday. But it heralded the future as much as it celebrated the past, showcasing the country’s strongest suit: technology.

The centerpiece of the Expo was a gigantic Corliss engine, the apotheosis of 40 years of steam technology. Thirty percent more efficient than standard steam engines of the day, it powered virtually every industrial exhibit at the exposition via a maze of belts, pulleys, and shafts. Visitors were stunned that the gigantic apparatus was supervised by a single attendant, who spent much of his time reading newspapers.

“This exposition was attended by 10 million people at a time when travel was slow and difficult, and it changed the world,” observes Jim Stogdill, general manager of Radar at O’Reilly Media, and general manager of O’Reilly’s upcoming Internet-of-Things-related conference, Solid.

“Think of a farm boy from Kansas looking at that Corliss engine, seeing what it could do, thinking of what was possible,” Stogdill continues. “When he left the exposition, he was a different person. He understood what the technology he saw meant to his own work and life.”

The 1876 exposition didn’t mark the beginning of the Industrial Revolution, says Stogdill. Rather, it signaled its fruition, its point of critical mass. It was the nexus where everything — advanced steam technology, mass production, railroads, telegraphy — merged.

“It foreshadowed the near future, when the Industrial Revolution led to the rapid transformation of society, culturally as well as economically. More than 10,000 patents followed the exposition, and it accelerated the global adoption of the ‘American System of Manufacture.’ The world was never the same after that.”

In terms of the Internet of Things, we have reached that same point of critical mass. In fact, the present moment is more similar to 1876 than to more recent digital disruptions, Stogdill argues. “It’s not just the sheer physicality of this stuff,” he says. “It is also the breadth and speed of the change bearing down on us.”

While the Internet changed everything, says Stogdill, “its changes came in waves, with scientists and alpha geeks affected first, followed by the early adopters who clamored to try it. It wash’t until the Internet was ubiquitous that every Kansas farm boy went online. That 1876 Kansas farm boy may not have foreseen every innovation the Industrial Revolution would bring, but he knew — whether he liked it or not — that his world was changing.”

As the Internet subsumes physical objects, the rate of change is accelerating, observes Stogdill. “Today, stable wireless platforms, standardized software interface components and cheap, widely available sensors have made the connection of virtually every device — from coffee pots to cars — not only possible; they have made it certain.”

“Internet of Things” is now widely used to describe this latest permutation of digital technology; indeed, “overused” may be a more apt description. It teeters on the knife-edge of cliché. “The term is clunky,” Stogdill acknowledges, “but the buzz for the underlying concepts is deserved.”

Stogdill is quick to point out that this “Internet of Everything” goes far beyond the development of new consumer products. Open source hardware and software already are allowing the easy integration of programatic interfaces with everything from weather stations to locomotives. Large, complicated systems — water delivery infrastructure, power plants, sewage treatment plants, office buildings — will be made intelligent by these software and sensor packages, allowing real-time control and exquisitely efficient operation. Manufacturing has been made frictionless, development costs are plunging, and new manufacturing-as-a-service frameworks will create new business models and drive factory production costs down and production up.

“When the digital age began accelerating,” Stogdill explains, “Nicholas Negroponte observed that the world was moving from atoms to bits — that is, the high-value economic sectors were transforming from industrial production to aggregating information.”

“I see the Internet of Everything as the next step,” he says. ”We won’t be moving back to atoms, but we’ll be combining atoms and bits, merging software and hardware. Data will literally grow physical appendages, and inform industrial production and public services in extremely powerful and efficient ways. Power plants will adjust production according to real-time demand, traffic will smooth out as driverless cars become commonplace. We’ll be able to track air and water pollution to an unprecedented degree. Buildings will not only monitor their environmental conditions for maximum comfort and energy efficiency, they’ll be able to adjust energy consumption so it corresponds to electricity availability from sustainable sources.”

Stogdill believes these converging phenomena have put us on the cusp of a transformation as dramatic as the Industrial Revolution.

“Everyone will be affected by this collision of hardware and software, by the merging of the virtual and real,” he says. “It’s really a watershed moment in technology and culture. We’re at one of those tipping points of history again, where everything shifts to a different reality. That’s what the 1876 exposition was all about. It’s one thing to read about the exposition’s Corliss engine, but it would’ve been a wholly different experience to stand in that exhibit hall and see, feel, and hear its 1,400 horsepower at work, driving thousands of machines. It is that sensory experience that we intend to capture with Solid. When people look back in 150 years, we think they could well say, ‘This is when they got it. This is when they understood.’”

This post originally appeared on O’Reilly Radar. (“More 1876 than 1995”).

On-line reviews are causing the Twilight of the Brands

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Key Points:

  • Brands have never been more fragile. What has really weakened the power of brands is the Internet, which has given ordinary consumers easy access to expert reviews, user reviews, and detailed product data, in an array of categories.
  • A recent PricewaterhouseCoopers study found that eighty per cent of consumers look at online reviews before making major purchases.
  • Upstarts now find it easier to compete with the big boys.
  • The positive, if you build a better mousetrap, people will soon know about it.

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The New Yorker by February 17, 2014

Twelve months ago, Lululemon Athletica was one of the hottest brands in the world. Sales of its high-priced yoga gear were exploding; the company was expanding into new markets; experts were in awe of its “cultlike following.” As one observer put it, “They’re more than apparel. They’re a life style.” But then customers started complaining about pilling fabrics, bleeding dyes, and, most memorably, yoga pants so thin that they effectively became transparent when you bent over. Lululemon’s founder made things worse by suggesting that some women were too fat to wear the company’s clothes. And that was the end of Lululemon’s charmed existence: the founder stepped down from his management role, and, a few weeks ago, the company said that it had seen sales “decelerate meaningfully.”

It’s a truism of business-book thinking that a company’s brand is its “most important asset,” more valuable than technology or patents or manufacturing prowess. But brands have never been more fragile. The reason is simple: consumers are supremely well informed and far more likely to investigate the real value of products than to rely on logos. “Absolute Value,” a new book by Itamar Simonson, a marketing professor at Stanford, and Emanuel Rosen, a former software executive, shows that, historically, the rise of brands was a response to an information-poor environment. When consumers had to rely on advertisements and their past experience with a company, brands served as proxies for quality; if a car was made by G.M., or a ketchup by Heinz, you assumed that it was pretty good. It was hard to figure out if a new product from an unfamiliar company was reliable or not, so brand loyalty was a way of reducing risk. As recently as the nineteen-eighties, nearly four-fifths of American car buyers stayed loyal to a brand.

Today, consumers can read reams of research about whatever they want to buy. This started back with Consumer Reports, which did objective studies of products, and with J. D. Power’s quality rankings, which revealed what ordinary customers thought of the cars they’d bought. But what’s really weakened the power of brands is the Internet, which has given ordinary consumers easy access to expert reviews, user reviews, and detailed product data, in an array of categories. A recent PricewaterhouseCoopers study found that eighty per cent of consumers look at online reviews before making major purchases, and a host of studies have logged the strong influence those reviews have on the decisions people make. The rise of social media has accelerated the trend to an astonishing degree: a dud product can become a laughingstock in a matter of hours. In the old days, you might buy a Sony television set because you’d owned one before, or because you trusted the brand. Today, such considerations matter much less than reviews on Amazon and Engadget and CNET. As Simonson told me, “each product now has to prove itself on its own.”

It’s been argued that the welter of information will actually make brands more valuable. As the influential consultancy Interbrand puts it, “In a world where consumers are oftentimes overwhelmed with information, the role a brand plays in people’s lives has become all the more important.” But information overload is largely a myth. “Most consumers learn very quickly how to get a great deal of information efficiently and effectively,” Simonson says. “Most of us figure out how to find what we’re looking for without spending huge amounts of time online.” And this has made customer loyalty pretty much a thing of the past. Only twenty-five per cent of American respondents in a recent Ernst & Young study said that brand loyalty affected how they shopped.

For established brands, this is a nightmare. You can never coast on past performance—the percentage of brand-loyal car buyers has plummeted in the past twenty years—and the price premium that a recognized brand can charge has shrunk. If you’re making a better product, you can still charge more, but, if your product is much like that of your competitors, your price needs to be similar, too. That’s the clearest indication that the economic value of brands—traditionally assessed by the premium a company could charge—is waning. This isn’t true across the board: brands retain value where the brand association is integral to the experience of a product (Coca-Cola, say), or where they confer status, as with luxury goods. But even here the information deluge is transformative; luxury travel, for instance, has been profoundly affected by sites like TripAdvisor.

For consumers this is ideal: they’re making better choices, and heightened competition has raised quality and held down prices. And they’re not the only beneficiaries; upstarts now find it easier to compete with the big boys. If you build a better mousetrap, people will soon know about it. A decade ago, personal-computer companies like Asus and Acer had almost no brand identity outside Taiwan. Now they are major players. Roku, a maker of streaming entertainment devices, has thrived even though its products have to compete with similar ones made by Apple (which is usually cited as the world’s most valuable brand). And Hyundai has gone from being a joke to selling four million cars a year. For much of the twentieth century, consumer markets were stable. Today, they are tumultuous, and you’re only as good as your last product. For brands like Lululemon, there’s only one consolation: make something really great and your past sins will be forgotten. 

ILLUSTRATION: Christoph Niemann

Strategy in a World of Constant Change

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February 3, 2014

Roger Martin – Harvard Business Review

Am I the only person to be getting a bit weary of hearing it repeatedly asserted that we’re living in a world of constant, accelerating change?  That competitive advantages are becoming ever more transient and that the secret to survival will be to the ability to transform on a dime?  Otherwise, what happened to Tom Tom will happen to you. Please!

Let me share a fun clip with you, sent to me the other day my former colleague Jonathan Rotenberg, founder of the Boston Computer Society. It chronicles Steve Jobs’ first public introduction of the brand new Macintosh, which happened in January 1984 at Jonathan’s Society in Boston.  The whole event was was a cool trip down memory lane.

The moment I loved most was during the Q&A when an older gentleman asked Jobs a challenging question about the mouse as user interface technology: did it really compare favorably to the traditional keystroke approach? It was fun to watch a younger, mellower Jobs give a patient, reassuring response and not insinuate that the questioner was a moron. Jobs turned out to be quite right in his answer, which was that once people gave the mouse a try, they would see that it was far superior to keystrokes.

The really interesting thing about the gentleman’s question was the fact that it was asked 19 years after the mouse was shown to be a definitively superior graphical user interface at Xerox PARC in 1965.  It didn’t become the default tool with the launch of the Macintosh in 1984, even though today the entire universe of computer users would be totally bereft if someone took away their mouse because it is acknowledged now to be so utterly superior to keystrokes. That didn’t happen until the release of Microsoft Windows 95, 30 years after it had given clear proof of superiority in 1965, as my friend and graphical user interface legend Bill Buxton likes to point out.

Science fiction guru William Gibson expresses this phenomenon very nicely: “The future is already here — it is just not very evenly distributed.”

His point, of course, is that when entirely new, transformative futures arrive (like the mouse in 1965) their effects take a long time to become evenly distributed — typically a long, long time even in the supposed fast-moving tech sector. Yes, Amazon is utterly transforming the way Americans shop, but 20 years after it was founded, it still has a fractional share of most goods other than books. Even in books, it took a decade for it to really hurt Barnes & Noble and Borders.
One lesson from this is that real competitive advantage is enormously long-lived. I remember helping Mike Porter with his terrific 1996 HBR article What Is Strategy? In it, he talked about the competitive advantage of Southwest Airlines, Vanguard Group and Progressive Insurance. Almost 20 years later, after huge changes in their industries, all three are still on top.

To be sure, first mover advantages can vaporize quickly, but not all first mover advantages are backed by a real competitive advantage.   So if I hear the demise of MySpace cited once more as evidence that competitive advantage has become more transient, I will puke. All it proves is the basic rule of business: that which can be built simply and quickly can be simply and quickly torn down.

Another lesson to draw from Gibson is that certain futures can be seen very early if you look carefully at faint initial signals. It is possible to say that the dominance of the mouse was inevitable even as of 1965 because it was just plain better. Betting on the mouse over keystrokes was probably a safe wager even in 1965, though assuming widespread adoption in no time would have been a losing bet.   Similarly, you could probably have concluded that wire line phones were headed for the trash bin as early as 1973 with the advent of Motorola’s Dyna-Tac mobile phone and that the creation of ARPANET in 1969 meant that print news was on its way out.

The danger, of course, is that in recognizing that a particular technology or industry is doomed you forget that they can take a long time to die.  Going short on wire line carriers in the 1970s, 1980s or even 1990s would have been a bad idea and it’s only in the last ten years that the Internet has really started to kill newsprint and newspapers.

Strategy is a balancing act; it’s about judging between a fate being sealed and its being realized.  Companies should not be in a hurry to abandon their competitive advantages in the wake of the hot new idea or technology.  They must pay it attention because it may contain the seeds of their eventual destruction. But there is probably plenty of time to figure out what to.  Thomson Reuters was both one of the world’s largest newspaper publishers and leading textbook providers as of 2000.  It saw the signals and began a measured transition to becoming a provider of subscription-based, online must-have information, getting completely out of both the newspaper and textbook businesses while both were still highly profitable.

Advantage is neither transitory nor immortal. Hence, strategy is not an either-or exercise about seeking flexibility OR sustainability. It is about both: seeking sustainable competitive advantage in a world full of far-reaching and tumultuous change.