What the Internet of Things means for product development

Posted on 28 Aug 2014 by The Manufacturer

Diego Tamburini, manufacturing industry strategist at Autodesk, discusses the Internet of Things and how it will impact on product development for manufacturers.

Diego Tamburini, manufacturing industry strategist, Autodesk
Diego Tamburini, manufacturing industry strategist, Autodesk

A new era of product innovation is underway as more and more items are designed to connect to the “Internet of Things” (IoT).

With the IoT, no product is an island anymore. Any device can be assigned an IP (Internet Protocol) address that allows it to connect and talk with other “things”.

IDC predicts that 30 billion things will be connected to the Internet by 2020 and that revenue from the IoT will reach $8.9 trillion the same year. We are already seeing excitement and adoption in retail, transportation, and insurance applications, as well as expansion into other areas such as manufacturing, utilities, government, banking, and healthcare.

As the IoT becomes more widespread, how will it affect not just the types of products being made, but also the larger product development ecosystem? And what changes will manufacturers need to make to seize the opportunities that the IoT creates?

Products and the IoT

We have been designing products that connect to the Internet for quite some time: computers, smart phones, TVs – even home appliances. What is different about this new trend we are calling the IoT?

The difference lies in the variety of things we are connecting to the Internet, and the entirely new scenarios this variety is fuelling.

Take the humble home thermostat. For many years, this relatively simple device has done one thing very well: control the temperature of a room. Connect this thermostat to the Internet, however, and the possibilities explode…

You can still control the temperature of a room, but now you can control it from your mobile device. You can make the thermostat talk to other home automation devices. You can even connect it with the power company to gain insights into energy costs or usage patterns that could save you money.

In this highly connected new era, devices are becoming more like computer platforms that are intended to run software applications developed by a community of third party developers – not unlike PCs, tablets and smartphones.

Since IoT devices can sense their environment and collect behaviour history, they become an entirely new army of data collection devices, constantly harvesting data and pumping it into the “Big Data” tank.

If the traditional version of the Internet was about data created by people, the IoT is about data created by things. We are still in the early stages of figuring out what exactly we can do with all this data, but it has great potential to provide insights that can improve products and services for end users.

The Product Development Ecosystem and the IoT

An understanding of IoT products and their capabilities gives us a clearer picture of the new product development ecosystem that will emerge to support these products. We can group the ecosystem into four basic categories:

Group 1: Those who design the things that connect to the IoT

Professionals in this group will have to adapt their perspective and design with connectivity in mind from the start. They will also need to rethink the roles that electronics and software play in the behaviour of their products. Customers are increasingly expecting that manufacturers will improve the performance of their products over time with regular “over-the-wire” software upgrades. As a result, manufacturers are now designing nodes of a larger system, instead of isolated products – and optimizing for the performance of the entire system, not just of the individual device.

Group 2: Those who develop the software that runs on these things

Software developers who until now may have been developing applications for computers, mobile devices, and embedded controllers could repurpose their skills to target the slew of new devices connecting to the IoT. They could either develop the applications that run on the device itself, or the applications that surround the device and connect it to other devices. These developers could work for the device manufacturer directly, or for a third party developer that is leveraging the open Application Programming Interfaces(APIs) exposed by the device manufacturer. Meanwhile, a smaller group of developers, with a deeper understanding of the internals of the device, will develop the low-level code that controls the device itself and the APIs that sit on top of it.

Group 3: Those who analyse the data the things generate

Engineers in this group write or run software to analyse the big data generated by the IoT, and extract insight that could be used to improve the design, operation, maintenance, and marketing of a product or process. There is huge opportunity for this group, not only because of the tremendous potential of using analytics to improve products, but also because the skills needed are in short supply and very hard to find. Calling all data scientists, analysts, statisticians, and mathematicians: this is your growth area.

Group 4: Those who develop the IoT infrastructure

These are the Ciscos, GEs, and AT&Ts of the world that develop the networking hardware and software that powers the IoT. Engineers in this group would have most likely developed their skills in the “traditional” Internet, and now need to expand their skills and learn the challenges, protocols, and standards specific to the IoT.


The “things” that we are connecting to the IoT don’t look and behave like the things of yesteryear. To seize the IoT opportunity, manufacturers will have to embrace a new mindset of designing devices so that they can interconnect, talk to one another, constantly sense their environment, and collect and share huge amounts of data.

The opportunity is too large for manufacturers to ignore. The IoT represents a real jumping-off point for innovation, jobs, and revenue creation. Just as the Internet created a thriving ecosystem of people doing fascinating things, the IoT is poised to do the same for those who understand and embrace this new era of product design.