Luis, welcome back to the Brand Lab Series. I’m so excited as we were just talking that you could be on with us again. You’ve really been at the forefront of technology, cognitive computing, IoT. You were first on our podcast almost three years ago, which seems crazy to me. And I think back then IoT was just starting to become a little bit more mainstream, and so I’m super excited to have you on and have you talk a little bit about where you think the IoT adoption rate is, and kinda specifically maybe starting at the consumer level.

LUIS

Sure, and I’m glad that you separated kind of consumer and commercial because there is a difference, but the interesting thing about on the consumer side is what we’ve seen in the last several years is that IoT has not been adopted as IoT per se. The adoption is really happening around use cases that depend on IoT technologies.

A great example where we see heavy adoption that I think is very familiar is around smart homes. So if you think about these smart assistants that are listening, they’re controlling, they’re analyzing all these devices around the home, that’s a very clear IoT use case, but that’s not why people buy these devices. They do it to make their lives more convenient. And within these devices and within the cloud, you’re getting analytics that are being used to better predict and customize people’s interest, but it’s also these analytics are being used to monetize much more specific information about individuals and in particular in the smart home or even smart car, which is starting to show inflection. This is an all-out war amongst the players in this space, and so that’s fueling the incredible amount of adoption.

BRIAN

Building on that, Luis, one of the things that I think is important is that we do wanna think about it through again as you just described the consumer use case, but then seeing it more on the business side as well. So think about it through the more B2B play. So talk about that in terms of what you’re seeing and how is that adoption rate in comparison to the consumer lens?

LUIS

That adoption is different because the entry point, the typical entry point that we’re seeing are use cases where there’s a clear concrete payback. So the idea here is that someone like a CFO or someone who’s in charge of a budget looks at a use case and says, “Yes, this will pay back this much amount in this much time, and it’s measurable.” A couple of examples, one is condition-based maintenance of heavy equipment. Instead of doing maintenance at a certain time interval, you do the maintenance when the maintenance is actually needed. That can be a clear return on investment. Another one is wearables, providing safety. So think about a manufacturing plant. You have sensors on people. Those sensors can then detect falls, or they can detect when somebody is in a place that they shouldn’t be or in a place that they could be but maybe at the wrong time or maybe they’re not authorized to be there. So these are safety issues that have a very clear payback. But a more common one that people probably don’t realize is happening is analytics and retail stores.

So a retail store manager is using information about demographics or how long people are in front of a certain product or a certain case that they have up, Cuelinks to go in front of point of sales. So there’s lots of different ways that it’s not just the user experience that the retail folks are looking at, but also trying to improve their overall dollars per square foot or dollars per customer. Another area there that’s actually we’re starting to see becoming even more part of the equation is Internet of Things use cases that are based on drones, especially back to the safety point I made for things like inspections in very dangerous situations like tall wind power turbines. This is something that was starting when… Three years ago people were talking about it, but now these kinds of inspections are now becoming much more mainstream. Obviously better to send a drone up to look at a tower versus having a person climb up. And plus drones can also have onboard analytics that can do other kinds of analysis that maybe aren’t easy for a person to see with the naked eye.

The other area that I think is really having some interesting adoption curves is machinery based as a service model. So three years ago when we were talking, one of the things that was coming out was, for example, thrust as a service. So instead of selling an airplane engine to an airplane manufacturer that then sells an airplane to an airline that then maintains it, what if you sell that thrust as a service so that the original manufacturer is the one that stocks the spare parts that has experts that do the maintenance and that tracks the engine across a whole set of different analytics and data that then allows them to make better decisions about when, when to maintain, to improve our airline safety. So these kinds of things again to the consumers are starting to manifest themselves in things like driverless cars and eventually even on the road, your driverless trucks, so being able to have cargo back and forth. So this is another way that you’re actually starting to see a little of a blend between the B2B and the B2C as well.

BRIAN

It’s interesting. If I’m hearing you, one of the big takeaways there is that to the consumer lens, people are adopting IoT less on the technology side but more so for call it the convenient factor. And on the business side, it’s really more of the return on investment side. For all the talk about IoT and T being technology, it’s really kind of in the personal side, it’s a lifestyle benefit that the technology provides people, and on the business side, it’s really like, what’s the big business payback for that.

LUIS

Correct. And part of that is because IoT, there’re costs that come with IoT. And on the consumer side, the costs are coming down because the consumers can just install devices more easily. You stick an Echo device on your counter, or instead of buying a regular light bulb, you buy a smart light bulb. So it becomes part of their everyday pattern of installation and maintenance, whereas on the business side, if you’re really doing things at scale, you’re worried much more about the effectiveness of what you’re doing and also you have to pay people to deploy sensors and maintain those sensors and keep all the infrastructure going, so there’s a real cost that’s visible to the bottom line from a business perspective.

BRIAN

Interesting. And I was just giving a talk this morning to an international B2B brand around consumer-centric strategy and some of that, and we were talking a lot about how B2C industries in that particular case generally kind of lead B2B and B2B kind of lags. So you can start to see trends in the B2C space that will start to emerge in B2B. Do you see that from an IoT perspective? Do you see one is a little bit more leading and one is a little lagging?

LUIS

It’s actually a mix. It’s an interesting mix. So for example, on the safety side that I mentioned before, I mean you’re talking about people’s lives and people being injured, and that’s something that’s really been more ingrained on the B2B side, and I really haven’t seen that as much on the B2C side. You do see some things that are coming out, for example, for elder people who have trouble with mobility and being able to have those wearables, but really it’s taken off I think more on the B2B side. On the B2B side, another example where I think it does follow your path is the whole home like the Nest and the home HVAC.

And there that’s something that is really taking off in the home and you’re starting to see more and more of it in smart buildings. The reason for the smart buildings is because of the energy savings that are, again, very measurable, but it does require an investment. So again, a business case needs to be made there, or as in the home, there’s so much waste that happens with having not a smart thermostat. That’s something that you don’t have to build a business case. You know that you’re gonna have some savings because of the analytics that it does about when you’re not around. It’s becoming… I wouldn’t call it a rule of thumb. You know it depends more on the dynamics we talked about earlier.

BRIAN

Super interesting. I can see why it excites you. And I know the last time we talked, you were director of IoT at IBM and you’ve since pivoted to Honeywell. Talk a little bit about Honeywell and what are you doing in your current role that excites you?

LUIS

Sure. So I’m in commercial security division of Honeywell and what I’m doing there is building an ecosystem, an open ecosystem of partners who contribute to our broader solutions. And what we are interested in commercial security is protecting what matters. So a really great example of that is there’s a whole lot of video analytics vendors out there that do facial recognition and they’re good at different things. Some are good at facial recognition in large crowds, some are good in facial recognition when people are moving quickly through a line, for example, some are super accurate in terms of facial recognition when it comes to different types of ethnicities, which is a thing.

And so you wanna be able to bring in different ones depending on what the situation is, a similar kind of thing for weapons detection. That’s becoming a hotter area. Is it a gun or is it just you holding your fingers like a gun? That’s becoming something that’s more mainstream to be able to deploy. And so what you do is you combine the traditional Honeywell commercial security types of products like video cameras. You add the analytics and then you start improving people’s safety in stadiums and workplaces, other places people gather. And one of the key initiatives that we’ve got in place is to really help introduce schools into this new type of broader IoT use cases ’cause a lot of schools don’t realize what technology is and how technology could help them. And so there what we’re helping to protect is not just what matters but what matters the most, so really exciting stuff.

BRIAN

Yeah, that is not only exciting but that is fascinating stuff. And as you first said, you’re securing what matters, and as you started talking through all these things around facial recognition, all these things started going off in my head and then you started talking about them as well. It’s almost like an episode of Black Mirror or something here that we could be talking about as it relates to all the things that technology allows us to do, which I think is super fascinating. And I know you talked a little bit earlier about some use cases and adoption rates as we’re seeing momentum in IoT. Who is a company or an industry that you think is doing something really unique and kind of cutting edge right now in that area?

LUIS

So right now, what’s happening in IoT from an analytics perspective, is there’s a lot of machine learning type of use cases. Machine learning has really gone mainstream since the last time we spoke, and there’s companies including like Intel and Nvidia that have come up with much lower cost ways of doing machine learning.

So I think that’s one inflection point. What I think is really cool as people are starting now to use cognitive, and we’ll talk about this maybe in a few years as well, but we’re seeing the beginning of the use of more cognitive types of AI versus just the machine learning. So cognitive is more broad than machine learning and it includes machine learning as part of its quiver of arrows. An example of that as I was walking around one of these shows, and I found a couple of vendors who were each working on using this cognitive computing to analyze social media. And the reason that was interesting to me immediately because I mentioned protecting schools earlier, this is a way you could take cognitive, apply it to social media feeds for students because a lot of them as you know make everything public, so you don’t have to sign anything, it’s all out there.

And they’re using that to determine potential threats or potential situations. It doesn’t even have to be what you hear about in the news about someone’s gonna come in with a gun. It could just be that someone’s being bullied. It could be that there’s some threats being made against some students and students are afraid to tell because then they become targets even more so. So things like that, workplace violence as well, you can start figuring out where these threats are coming from and as you start combining other types of data into those analytics, maybe through law enforcement, it can give you a better way of not only trying to earlier detect but maybe even predict and prevent. So to me, when you start bringing in unstructured data, structured data, different types of data sources, even something like the weather… You know there’s more crime that happens in certain places when the weather changes. All of a sudden, people’s safety and well-being can be impacted.

BRIAN

And unfortunately, I live in one of those cities where there is a direct correlation between weather and crime statistics. It’s something that’s often talked a lot about here in Chicago. I think what’s so fascinating is you’re throwing around these terms machine learning, cognitive data analytics, AI, a few things. I think it’s interesting because there’s so much that I think all this power and all this data can do, and at the same time, I think it can be a little hard for people that don’t have a little bit of a technical or scientific background like you might to get their arms around. What would you say is probably a common misperception about IoT?

LUIS

One common one is that IoT is a use case onto itself. And so, IoT is not a use case. It’s an enabler, and the use case itself is where the profit is. So use case is something from a consumer perspective on the ability to save money on your air conditioning or heating. That’s real value that then can be monetized. From a business perspective, I mentioned being able to do condition-based maintenance which means you change a $600 air filter on a unit when it needs changing instead of every few months when maybe they still have some life in it. So not only are you saving money but you’re putting less garbage into the landfill. Those things like less garbage, saving money, convenience, that’s the value. IoT itself is just the enabler. So that’s a key one that I think is a misconception. Another one is that IoT is all about cloud computing. Really, you step into the real guts of it, you have to deploy something, a sensor or some kind of cables or wireless routers. You have to deploy something that grabs the data. You have to be able to get the data to the right place, whether it’d be the edge of the cloud, and then you have to have a way of taking action, maybe an actuator.

And so, people think about the cloud as being all where IoT sits, but really IoT is across kinda end-to-end. And then I think the third one, which I think is the biggest misconception is that analytics that you get from IoT is all you need to take action. And one of the areas where that really speaks volume is if you think about retail and a store manager. If they get a bunch of analytics that tell them, “Hey, the demographics, people that walk into this store are this. People have a dwell time in front of this counter of X seconds.” Those are all analytics, those are all insights, but what do you do with that? If you think just showing someone that creates action, that’s a misconception. What you need to have is someone who either has the ability to convert those analytics into action or has some kind of consultant or some other way to make that conversion before you can create the true value.

BRIAN

Building on the data analytics piece, which I totally agree is probably the biggest one, at least for sure in my role now is advising organizations both in B2B and B2C and the C-suite talking about marketing. A lot of times I think they just say, “Well, you know, we use the analytics, we use the data,” and I think that there’s, as you just pointed out, there’s this important process in between that you need to figure out how to then harness that and make it actionable. So when you think about marketers trying to harness the power of IoT so that they can be more relevant to do their end audience or their end buyers, what’s some advice that you would give them?

LUIS

The first piece of advice is that it’s a little bit of a dance between the technology and the outcome. So I’m very outcome-focused. I think I always advocate the marketers be outcome-focused. So if marketers can focus on what is the outcome that I’m trying to drive and then work with, if they don’t understand the technology directly, work with someone who does, and then do a little dance back and forth to see can this technology provide me a better way to reach that outcome. We worked with a retailer that had thousands of sites and we figured out by doing this little dance that one of their issues was that vendors would come in to fix… This was a retail store to fix a piece of equipment at that store, an expensive piece of equipment. And what would happen is that an invoice would come in 30 days later and it would have a certain number of hours that that vendor was there, the work person was there, and there was no way to cross-check where that person was actually there the whole time or sitting in the back drinking a cup of coffee for a part of that time. Now IoT can provide an answer to that by having the right sensors in place or having a mechanism for check-in, being able to do facial detection or object detection. They see the movements of the person who comes in.

And so it turned out that that technology was ready for that to go mainstream and by kinda doing that dance, you understand where the art of the possible is now. But you have to start with the outcome that you’re trying to reach, and a lot of times people will focus on, “Here’s the technology, here’s the hammer. What do we do with it?” versus “I’m trying to build a bird cage and I need some way to build them faster.” The other thing that I would add to that in terms of outcomes, focus on the must-have versus the that’s cool. An example where that didn’t work out too well was a lot of times people would come up with a use case around building comfort and say, “Wouldn’t it be great if I could by talking or waving my hand or doing something easy that can be detected, just be able to change the temperature of where I’m sitting or the lighting of where I’m sitting.” Well, as it turns out, that’s not the best possible way to do that because the people who are managing the building are looking at not just the comfort levels but also the energy usage. And so, if everyone’s trying to change their energy usage where they’re sitting, not only could it cause discord, but it could also wreak havoc on the environment because now you’re starting to spend lots of energy trying to cool one area and trying to heat the area right next to it. So, I think marketers just need to be more cognizant in terms of these intricacies around how IoT can really deliver value.

BRIAN

That is great advice. I love you talking about the dance and kinda the balancing act. But more importantly, I think your strongest piece of advice that people really need to focus on is the outcome and talking about trying less to focus on the technology through the lens of “It’s cool, but what is it that you wanna do?” We talked earlier about kind of struggling through the data analysis phase or the analytics phase but I see that same thing. It’s kind of like people wanna harness the tech to do something cool because they think that that will create a marketing buzz or opportunity. I like to use the term ’cause I’m a big fan of the jobs-to-be-done mindset and methodology too. But it’s like, what is it that you’re trying to really do? And it may not be that you need a drill. Let’s say, you need a hole or as you said, you don’t need the hammer for the bird cage. I think, really thinking about that outcome is great advice and insight there.

And you’ve talked a ton about all these interesting use cases, how you’re using IoT at Honeywell, some of the things that are really unique to certain industries, where you’re seeing some really interesting movement and innovation in the area. But I did wanna ask you one question that I asked you a couple of years ago because there are obviously people that are still just getting started and even though this has grown so much the last two, three years, what advice would you have for those businesses that are just looking to get started in IoT?

LUIS

I think in addition to the outcome message that I talked about before, is think about if you’re gonna be delivering IoT use cases to customers, really think about what’s gonna happen when you get that first sale. And tying back a few points that I mentioned earlier, this isn’t just about having a great set of analytics in the Cloud, there’s some real work that people have to do to go out, inspect the site, if it’s… Usually these are site-based type of use cases. Or if it’s a person, it’s a wearable, how do you attach the wearable? But somebody has to do that, somebody has to then figure out, how that data gets to a place that it’s gonna be analyzed. What happens to that data after it gets analyzed? Where does it go? Who does it go to? And when you start thinking about those elements, the notion of scalability comes into play. If I’m gonna do one customer in one site, maybe as a business, I could do it myself. If I’m trying to do a 100 customers that each have 100 sites, how is that gonna work?

And now you start having to start thinking about who’s gonna go do that work, and how do I arrange that ecosystem of those types of partners to be able to do that? And I think that’s where businesses tend to not think it through and they’ll fail as a result because now the end customer gets an experience that may not be what they’re looking for. Or in the worst case, what happens is that all the extra amount of money you have to pay for this deployment and maintenance of all and the transfer the data and so on, that becomes so large that it makes the whole use case business case negative. And so the whole thing falls flat. And we saw that happening three years ago, and we see that still happening, and in some cases happening more. So this is something that I think is critical to look at.

BRIAN

Shifting gears a bit, I’d like to talk about another area that I know you have some deep expertise. And in fact, we just recently had another former IBMer, Rita Jackson on our podcast. She, like you, has deep product management expertise. I think that’s another area that a lot of people struggle on understanding. It seems in some ways so obvious by its name, but what are some pieces of advice or some best practices you have around product management and the era that we’re living in today?

LUIS

Yeah. So a couple of things, as a product manager, you have to figure out the strategy. You have to figure out short-term, long-term. And then you have to make some decisions about what you’re gonna do and what you’re not gonna do. And so some of the things that I would recommend as product managers think about IoT, is to think about it as a journey. Start with use cases that have short-term concrete return on investment. Those are gonna get you into the door. As much as we all love IoT here on this discussion, there is still a lotta skepticism out there. And in part ties back to IoT being enabler, not to use case, which makes it confusing to some people who read about it.

But you gotta start with something that’s short-term, concrete, and that’s very visceral that the end customer can really understand. What that’s gonna do is, it’s gonna allow the IoT infrastructure to get installed. The things that I mentioned before, just getting… How do you get data from one place to another and so on? Then as you think about that strategic journey, you can say, “What are the use cases that I can add that will leverage that infrastructure?” So now you have a strategic advantage because you’re the one that’s late in the infrastructure, why would the customer want to have two sets or three sets of infrastructure when you’ve already got that in there? A couple of caveats, too, to think about: One is data governance. Who owns the data? Who controls the data? And the other related one is data privacy. Are you in a country or a state? In Europe, for example, there’s a GDPR regulations that are very strict about how you’d manage personally identifiable information. California is adopting some of these kinds of regulations as well. And so, are you locating your data and managing it in a way that adheres to those regulations and laws?

BRIAN

That’s an absolutely fascinating side-bar discussion. In fact, this season, on the Brand Lab Series, we have Adam Kelly from Low Blow, he’s a leading IP attorney, and he is on to talk a lot about ownership and privacy issues in this technology era that we’re living in, including at a global level, the impact of international ownership, China, all those things. So yeah, that’s an absolute interesting animal on its own. I do wanna throw one curveball at you ’cause you said something I think that’s absolutely true, is for all the buzz and excitement around IoT, there’s also a little bit of skepticism there. And as we wound up season four of the Brand Lab Series, we had Melanie Cutlan, who runs Blockchain for Accenture on, which was another really popular podcast obviously, as Blockchain’s a very big buzzword as well. But we see a lotta skepticism there, too. Where do you come out on Blockchain?

LUIS

Part of the skepticism is because people don’t understand what it is and they think, “Oh, Blockchain is about currency,” these cyber currencies, and really, it’s much more than that. That’s number one. Number two, I think, like IoT, it’s an enabler, it’s kinda like if someone came and said, “Hey, Linux as all the rage, do things with Linux. Linux is… ” Right? And you’re like, “Well okay, well, what am I gonna do with Linux?” “No, Linux is the new thing.” And we all know it’s a new thing, we all know, why but it’s not that it’s Linux that makes the use case per se, it’s an enabler. And then I think, if you really study Blockchain and you study the current-implementations of it, there is a scaling issue.

If you think about the number of transactions that you can run through the existing Blockchain implementation, is that something like Bitcoin uses, there’s a real scalability limit. Which is why you see other vendors trying to develop varieties of the same kinds of algorithms, these hyper-ledgers type of algorithms that are more scalable. And that’s why you see entities like IBM, for example, coming out with their own infrastructure to try to address that. So even for those who understand the difference between enabler and a use case, there’s still reasons why you’d be afraid to try to base a business on it that depends on high scalability.

BRIAN

Terrific insight and point of view. And I was curious where you would kinda come down on that. If we could go back to product management just for a minute, you had some good insight there on what to do on the project management side. Think about the journey, some of those other differences. What are some ways that sales or marketing can actually better support, or product management can better support sales or marketing?

LUIS

It’s a conundrum because there’s a lot of businesses out there that have hardware that produce data that’s conducive to IoT, so analyzing it and producing insights. A lot of those businesses that produce this hardware, that produces the data, are product-based businesses. You have sales people and marketing folks that are used to saying “Look at this product, look at all the great features it provides and look at all the whiz bang things it does, and really, what IoT is about, what it enables is more of a journey versus a single product sale, which means that the way that you sell it is not as a product, but as a relationship. Look at the things that you can do today and solve these problems, and then look at the things that are on the roadmap for things you can do tomorrow, and the day after, the year after and so on, and you can build out a relationship that is mutually beneficial as a result. And plus, you don’t get left… By investing early with something that really gets you a benefit, a concrete benefit, you can leverage that investment over and over again, as the journey continues. That means it’s a consultative sale, and you market that very differently than you would have product sale. Having the ability to be able to do a consultative sale is gonna be an important part to really reap the benefits of having that hardware that does produce the data and puts you in a very powerful position to be able to build relationships.

BRIAN

Time has been flying, which it always does, when we have people like you on. As we start to wind down, what’s kind of next on the horizon for you or at Honeywell, and how can people learn more about what you’re doing?

LUIS

Yeah, so at Honeywell, as an overall company, we just launched Forge, so think of Forge as Honeywell’s approach to how you can solve business problems that are different, that are new, that produce disruptive value in some cases, and use technologies that are heavy on IoT analytics to do that. A little bit of that dance that we talked about before, instead of coming to Honeywell to buy a specific piece of hardware or product, now you’re coming in to solve problems that are now possible because of IoT, because of integration between different parts of the company. And I think youre gonna be seeing that kind of trend in other industries as well. Because that’s where, if you look at the value chain and where you see there’s a chance to unlock value or to disrupt the value chain to redistribute value, integration, IoT, you talked about Blockchain, these other new technologies that are coming in. This is all gonna start converging in a much more rapid way than we had seen even a decade ago, when we started seeing other types of technologies converge around the fledgling Internet.

So I think that’s where… If someone were to ask, “What should I look at?” Look at things like Forge, look at what the use cases are that are really starting to disrupt businesses, and you’ll see that this is where the edge of innovation is really gonna change the world as we know it. Maybe we should, instead of three years, we should do it in one year, because I think in the next one year, we’re gonna have as much acceleration as we did in the last three in this space.

BRIAN

I would love that and I might hold you to that because it’s conversations like the one we’ve just had in this episode that certainly make me smarter, certainly make me think more about the possibilities, both through a consumer lens, but also through a business owner lens, as well. And it’s also conversations like this that are why the Brand Lab Series was named the top business and technology podcast by the Academy of Interactive and Visual Arts. It’s because of really smart and savvy guests like you. I couldn’t be more grateful to have you on again. This was a fascinating conversation. I’d love to have you back in a year, and it will be interesting to see how fast things move and I suspect you’re right there, so Luis, thanks for being on the show today.