Hello everybody, and welcome to the Momenta Edge podcast, this is Momenta Insights Partner, Ed Maguire, and today we have a very special guest, Maciej Kranz whose title is VP of Strategic Innovation at Cisco, but Maciej is actually a lot more than that, he’s been one of the most prominent thought leaders in IoT, helping to shape a lot of the thinking, and putting in practice a lot of the ideas and visions that have emerged around the connecting industry, and the Internet of Everything. Maciej’s book, ‘Building the Internet of Things’, is absolutely a required reading for anybody that’s interested in the space. I got it when it first came out a couple of years ago.
Ed, really a pleasure, and thank you so much for the opportunity to talk about my favorite topic!
Fantastic. I think what would be helpful for some of the listeners who may not know you
I’ve been involved in the networking industry I would say for the last 30-years. Started in the late eighties, and I would say at the beginning of this century we started to get involved in deployment beyond the traditional IT environments, and then with the industrial ethernet and so-forth. To be honest, it was an interesting extension and a very different extension to our traditional business. But then I would say around six or seven years ago, we thought that the timing was right for Cisco, and for the industry to go big on this concept of connecting everything. Funny enough, you mentioned connected industry and I would ask to ram our first IoT business unit, and we called it Connected Industries Business Unit, exactly because we thought we were moving beyond the IT into the space of connecting devices, and connecting the industries.
I ran this group for a while, and then once we felt that the IoT was taking off I moved over to the current role which was basically focused on incubating new business in the wide spaces, and a lot of them are
So that’s my history and involvement with IoT, and as you mentioned, a few years ago I put together a book about the topic as well.
Could you talk a bit about what led you to write the book, and a little bit later we’ll get into what you’ve
You’ve been in the industry for a while, and a couple of years ago when we were at the height of the IoT hype so to speak, there was little messaging around IoT about billions of devices getting connected, and all of us making trillions of dollars with IoT. But to be honest a lot of line of business executives, and people that run businesses were confused about IoT, they were not sure exactly what it was for, and how they can use it. So, I started to get a question more and more around, ‘Is there a book that will help us demystify IoT, and put it in a business context?’ So, for business decision-makers, how they can use IoT to drive their business value. I looked around and at that time I didn’t see any book like this, so I decided to write on, and it took me 2.5 years, and the book came out.
To be honest, I think my main goal with this book was again to demystify IoT, but more importantly to help every business, whether you are industrial, healthcare or agriculture, whether you’re large or small, to help every business get started on the IoT journey. Because I do believe that IoT in many ways is sort of a foundation or capability of digital transformation, and as the industries become technology industries, it’s imperative that every organization gets started on the IoT journey, if on a negative side they want to survive, on the positive side if they want to evolve and grow their business.
Yes, and that thinking has really resonated. What have you learned since the book was published? When you launched, you really did step into a gap in the market where people were looking for used cases, and you provide a lot of illustrations and roadmaps for people to get smarter, What are some of the things that have emerged that may have been different from what you initially thought, or what you’ve seen that’s reinforced some of the key thinking and tenants, in the book?
The whole premise of the book was this was a sort of practical guide. I did list four sets of use cases I call ‘The fast paths to payback’, a bit of a tongue-twister!
I found that in general these concepts were very well received, but there were a couple of things that stood out, the first one was it was interesting to see that technology was not the major challenge or barrier to IoT adoption. There were some non-technology aspects around culture, around change management, around skillsets, around market structures, around
The second aspect of this was the aspect of security, so obviously over the last two years especially we saw a lot of denial cyber-attacks, a lot of cyber-attacks using IoT infrastructure, and in some ways, security became moved from, ‘Yes, it’s important together with other things. Well, we need to have a security strategy before we get started on the IoT journey’. So, it became the number one criterion for enterprises to consider.
That’s great. So, the security challenge is certainly one I think that was not initially incorporated in a lot of product designs, as you have people who were designing for functionality, and designing for utility as Edge devices. We’ve certainly seen with denial of service attacks and other compromises that that needs to be very much front and center. I think what’s also interesting, and you have done some work on this as well, is return on investment; I would love to get your thoughts, because determining ROI, if you go back a few years ago this was one of the big obstacles to adoption of projects, or at least justification for projects, was defining ROI. I’d be interested to get your sense on how that process and the ability to find ROI has advanced, and I know you also have shared some tools for calculating ROI.
Correct. Exactly to your point, we found that it was essential to help and give the practitioners the tools that they can use to build their business case, build their ROI. So, we placed on my website an online ROI calculator that everybody can log in and use to create an ROI output. So, there were a couple of lessons learned. One was that even as you get started with your first IoT project, most likely you will not have a very clear and precise ROI, because you don’t know. Still in some way you’re going in and saying, ‘Let me do this first IoT project’, and it’s a little bit on a ‘Trust me’ kind of a model, which is part of the reason why my advice
Even in this first phase before you start your first IOT project, you should try, you should do your best to assess your ROI. Normally they probably will not be precise or very accurate, but at least get a sense of that. So that’s the first time when you will do your business case in ROI. But more importantly, once you’ve done your first small IoT project, it’s very important to go back, obviously assess lessons learned, but more importantly to do a very precise ROI analysis of that project.
There are many reasons, and I’ve put this in a chapter in the book, that you would often see that your expected ROI would not materialize. For example, a lot of teams focused too much on the solution itself, and not
That’s a great point, and we’ll link to the ROI calculator on the site in the show notes.
I have a bigger picture question, if we go back about a year, Cisco had released a study that had shown there were a number of projects that were failing to move beyond the proof of concept stage, into production. If we go back about five years to when we first met, around 2014, there was an enormous amount of anticipation and optimism that we would see very rapid adoption, and it seemed that for a while there that some projects were getting a bit stuck, or they weren’t moving into production. Since then we’ve started to see things really pick up a bit, but I’d love to get your sense of where we are in this broader wave of adoption in the market, and how we’ve seen the very broad perception of how practically industries that are not necessarily connected, can adopt technologies in a way that will move into production applications?
It’s funny, because as you remember when we were at the height of the hype with IoT, we thought that we were defying the height curve logic, so we were at the top of the height curve, and then we just go up from there. Well, it turned out yet again that the height curve was correct, and we went to the trough and now we’re going into the actual practical implementation phase. If you look at the study that you mentioned, I often thought that it was a sobering message, but also I thought it was an optimistic message, which basically stated, yes, a lot of organizations got started on the IoT journeys, they found out as you saw that only a fraction of these companies actually successfully completed their projects, which basically meant a couple of things.
One is, they’re still in the proof of concept phase, and they’re working through their first project. The second one was the realization that the focus was on an IoT solution, rather than solving the business problem, and similar types of problems that they had to reset and pivot to their IoT efforts. The third one was an area like we talked earlier, approaching an IoT project comprehensively.
So, what I would say, since then what we have seen I think is a much more realistic and grounded and thorough approach to IoT, versus a, hooray, let’s run with the flag, and within the world look great three months from now, kind of approach. We also realized that different industries move at a different pace, and they’re at a different stage of the journey. For example, in the industrial segment, like let’s say in industrial automation, IoT deployments are fairly mature. In the Cisco
I also saw a lot of acceleration, for
So, overall, I would say the benefit of the last two or three years was that we truly moved from hype, and people getting started on IoT journeys without being fully ready, to now a much more pragmatic business grounded approach, which I think will result in IoT projects that will have clear ROI, and clear benefits.
I thought its very interesting that you had mentioned agriculture, and I wanted to address the question of data, and data privacy, which is certainly an ongoing debate. But certainly, in my conversations with people who were working in connected agriculture, there were a lot of concerns over data ownership, and data privacy, and of course this is not unique to agriculture as an industry. But I’d love to get your perspective on at least the evolving views of data privacy, and data
It’s a great topic. I just flew in from Europe a few days ago, so as you can appreciate with an impending GDPR implementation, it’s a very hot topic there as well, but honestly everywhere. Privacy and data ownership have different meanings in different industries, it would be different in healthcare versus in agriculture for example, but there are some common elements. I am very optimistic and very happy with the direction that the GDPR is taking us. There was a fair bit of group criticism about the complexity and so-forth, but I think the premise is right; which is, at the end of the day the end-consumer and business own their data. From that perspective, how do we build IoT systems to make sure that on the one hand we ensure that the data is actually residing in the right areas, which is why you see the cold concept of fog computing cause issue with the cloud, where you want to process the data for architectural and logistical reasons close to the search of where the data is coming from. But also, because quite often you want the data to reside
So, there is data ownership by the enterprise, but there is also the privacy issue and there is a strong IoT element in GDPR as well, where when you see all the IoT devices, so say cameras, sensors, and actuators, they collect personal data, and how do we make sure that this data is not used in a way that it’s not in agreement with what the consumers want. For example, the third generation of parking solutions now, these solutions have on the camera registering and sensing where you have the available parking slots. This camera would also capture let’s say people’s faces, people’s data, but this camera processes this data in the concept of fog computing on the device itself, and they don’t send the data that includes let’s say people’s faces, or license plates into the central location. This data gets processed locally and then discarded. So, we’re developing systems now that in addition to providing scalability, also offer
Do you see the privacy regulations, and
I fully agree with that, and I fully believe it will be the case. Having said that, I think the key to what you mention is the architecture. There’s a lot of discussion for example around embedding security and privacy requirements, for example in each of the end consumer
I think if we take the architectural approach, and solution level approach to security and privacy, it’s become much more scalable and much more practical and realistic. So, for example, yes there are some elements that need to be implemented on the device, but also a lot of the security and privacy capabilities can be embedded at the network layer, using in many ways tools that we already know, how to use. For example, asset inventories, posture assessments,
You mentioned architecture and being able to architect different capabilities into solutions. You had earlier mentioned fog computing, and I wanted to follow-up on that, in terms of what you see on the technology landscape some of the innovations that really are changing in the way people think about their business
That’s a great question. Two weeks’ ago, I was at the SAS World event and we had exactly this conversation, because at the end of the day as both of us know, the main reason we connect all of these IoT devices is because they are the sources of data, and we want to capture this data, analyze it, and turn these systems into solutions to drive the business outcomes. So, it’s a generation of data, analysis of the data, and IoT quite often acts on the decisions based on this data.
From that perspective, architecting all these connected devices in a way that we can capture the data real-time, near real-time, is a real innovation that IoT brings to the table. If you think about the centralized clouds, they are mostly two sets of use cases; one set of use cases is batch processing of data lakes, and huge sets of data, and the second set of use cases, for example vending machines, when you connect a bunch of vending machines directly to the cloud, that used case works because the vending machine sends a couple of packets every couple of days saying, ‘Hey, I’m running out of cans, please come over and replenish the supply’. So, the data is not very time sensitive, and the application is not very bandwidth intensive.
When you look at the use cases, like
So, from that
Are there any specific enabling technologies that you think may not fully be appreciated, in terms of the transform of effect, just from the perspective of an enterprise, looking in, evaluating all these options? There’s an enormous amount of innovation happening across many-many disciplines and domains, I would love to get your sense on where you think there are some technologies, that are emerging, or other enabling forces that could have an extraordinarily powerful, even multiplier effect on investments that people are making today.
Great question, and you and I have had this conversation before. It may sound funny because
So, that’s one area. The second one, we’ve already touched on, its fog computing, or distributed cloud, it is essential for us to evolve our cloud architectures, to take full advantage of real-time capabilities of IoT.
The third emerging area, which is also top of a high curve these days, is blockchain. Again, when you think, a lot of IoT implementations are in environments where the multiple parties, that are transacting multiple transactions with each other, and how do we establish the level of trust, the level of security, the level of transparency, but also efficiency across these different participants is key, and blockchain, especially private blockchains have a promise to actually allow us to do that.
So, I think of the combination of IoT, AI,
We’re very much believers that this combination, well, being able to harness the innovations from all these different domains results in what we’re terming, ‘An era of combinatorial innovation’. Each
I wanted to follow-up on the digital transformation side, and just get a sense from you, we’ve watched say the first phase of what we’ll call ‘Industrial IoT’ or ‘Connected Industry’, if there are some business model or organizational transformations that you’ve seen work well, and whether there are any specific lessons or takeaways from those companies, or those projects, that have really been successful?
The good news is that we have lots of example of successful IoT implementations, and as you know I’ve put a bunch of them in a book. On average I would say especially in the industrial
We see the new business models emerging, micropayments and other interesting concepts here. We’re seeing a broader movement of industries merging, like transportation and technology, or the next one on the horizon is retail and manufacturing; into new industries like drones emerging as well. So, we moved from optimization to now truly digital transformation.
Some of the best practices and lessons learned that I’ve seen from the industries, and we touched on this earlier, one is ‘Think big, start small’, the second one is, ‘Build the coalition of the willing’, the successful organization bring in multiple organizations. We talked a lot about a classic divide between
We clearly have seen the focus on skills and skills gaps, not only from the actual
Then there is much more focus from the enterprises, on investing in their own workforce in evolving skills. So, for example, I have a lot of examples of companies who invested for example in people that were working on the line, and they helped them evolve their skills to become quality
So, the interesting part is, as we talked at the very beginning of the conversation, yes there’s a big technology evolution, and
It’s interesting that you bring up the
You’re right, and when you think about it, obviously within Cisco we’re working on network economies, and there are a lot of IoT courses for High School graduates, for college students. But at the same time, like the work that Jeanne has been spearheading from Cisco perspective is, we work with the industry with academia, with our partners, with our customers on creating these consortia, and these models where we together are working on these new job skills, and how we have curricula, and how we have apprenticeships, how we have jobs ready for these new categories.
Just think about the manufacturing, in the US and Western Europe alone there are tens of thousands of jobs that don’t get filled in manufacturing
I think that lesson really applies for almost any industry that you can think of.
We now have to become lifelong
You’re right, I’m 53 and I expect that I will be reinventing myself at least three or four times over the next couple of decades. So, it’s this concept of lifelong learning, it never stops, and we must continue to do that to stay relevant, but also to have fun.
There’s one question I forgot to ask you, I know this is circling a little bit back off topic, but I did want to cover China, because you’ve done some work in China and I would love to get your perception on some of the differences in terms of how China is looking at Connected Industry, and some of your experience working here in the US, and in the West.
Yes, I wrote an article about a couple of months ago. I’ve been going to China since
So, it’s sort of this focus on aggressiveness in taking ideas from vision to execution, a think big mentality. Sometimes controversial, but
Overall, I saw this big IoT engine which is a combination of government priorities, and the focus a very much aggressive ‘can do’ attitude of start-ups. Also, a little paranoia of larger enterprises that they need to adopt IoT to survive and be competitive, not only in China but around the world, I think is what I took from the last trip.
Great. Well, just as you look forward, are there any lessons from what you’ve seen with some of the more forward-thinking regions, like China, and certainly with the forward-thinking technologists here in the US? What’s your vision for the next five to ten years of Connected Industry? What are you expecting to see, and what are you hoping for?
I published my predictions for this year, just recently as well, there are a couple of things that really struck me over the last couple of months. One is, it’s important to be hyper-local, that you need to start with business environments, you need to start with
One of the things that I’m taking away is, the IoT application and adoption is very broad. We started with industrial, but as you and I talked about, it’s now in agriculture, it’s now in pretty much every industry. The role of the governments in driving the agenda is becoming even more important, the role of research is becoming more important. The topic we’ve talked about as well which is IoT is a piece of the puzzle, and bringing the comprehensive approach to technology, with other aspects from blockchain, AI, and many others is important as well.
So, I would actually expect that a lot of IoT leadership from application, and from the innovation perspective, will come from the markets that are outside of the traditional markets of Western Europe and North America, because their use cases are so compelling, quite often in these environments you don’t have a legacy issue, you can just leapfrog from where you are today, to the latest and greatest. Also, there’s a hunger and a sense of urgency that I see in many places from Asia, America, Latin America as well.
There are many books, mine is one of them now, it could help organizations get started on their IoT journey. I’ve been promoting some of the other authors as well that have taken different aspects of IoT into consideration. My advice is if you’ve already started on the IoT journey, great, congratulations, just make sure that you do it in a comprehensive way as we’ve discussed. But if you haven’t started, first I would suggest a couple of things…
- Don’t be a hero, don’t reinvent the wheel, pick one of the four use cases that I’ve mentioned, these four fasts paths to payback, because thousands of your peers have already done that, so you can learn from their experiences.
- Learn from your peers’ mistakes. In my
bookI’ve put a whole chapter around it.
- Take a comprehensive approach, I’ve called it my recipe
- Don’t look at IoT in isolation, look at IoT in the context of other technologies.
- Engage with the community. There are hundreds of thousands of IoT conferences now, so go to the ones that are very specifically focusing on the area you want to focus. If you’re in agriculture and you want to focus on preventive maintenance, I’m pretty sure there’s a conference like that which you can go to and listen to the experts, and talk to your peers, and exchange ideas.
- I would also argue, get involved with a community, not only from learning but also from driving the agenda perspective. Get involved in standard buddies, get involved in sharing your best practices, and your successes and mistakes, because it takes a village; all of us are on a journey, we all should be working with each other, we all should be learning from each other, no one company can do it alone.
That’s great insight Maciej, and as always, it’s been enormously illuminating and a lot of fun talking to you and hearing your thoughts.
That wraps up our podcast. Again, I want to thank Maciej Kranz who is VP at Strategic Innovation for Cisco, but also one of the prominent thought leaders in the space. Really grateful for all the work and contributions you have made to the community and to the industry.
This is Ed Maguire, insights partner, and that’s bringing you another episode of the Momenta Edge podcast.