By Bashyam Anant
Consumerization of IT is a recent phenomenon where enterprise IT departments are beginning to allow employees to access corporate applications from personal devices such as iPhones and iPads. In similar spirit, we are beginning to see consumer devices, in particular, smartphones like the iPhone, transform the way industrial technology is deployed and used. In this post, we will disscuss examples from medical devices and point-of-sale systems that illustrate the trend and the issues they pose for incumbents and new entrants in these markets.
In the medical equipment business, startups like Alivecor and CellScope are transforming smartphones into mobile diagnostic tools. Alivecor's heart monitor, for example, consists of a sensor, an iPhone app and a cloud-based application. The sensor snaps on to an iPhone (watch demo) and is placed on the patient. It then transmits heart signals to the iPhone app, which then transmits the data to the cloud application for associating the reading with the patient's medical record, for analysis or for printing an ECG. At this time, the device is commercially available as a veterinary heart monitor, pending FDA approval for humans.
Figure 1: Alivecor iPhone App for Heart Monitoring
CellScope uses optical attachments to turn smartphones into "diagnostic-quality imaging systems for healthcare, consumer skincare and education". One of their apps is a clip-on otoscope which helps pediatricians or parents take pictures of a child's middle ear and store or share the pictures, enabling ear infections to be diagnosed and treated remotely, all by using just a smartphone with an optical attachment and an associated app.
Square has transformed point-of-sale systems by following a similar pattern. Square allows a business to accept credit card payments using a card reader that plugs into a smartphone's headphone jack. Square's android or iPhone app then transmits the payment to the business' cash register in the cloud for reconciliation and analysis.
Alivecor, CellScope and Square are disrupting incumbents in their markets by disaggregating the value of industrial equipment (e.g. ECG monitors or point of sale systems) into sensors (e.g. card reader or heart sensor), smartphones and software. Incumbents that sell proprietary hardware devices in these markets are at a cost disadvantage (since they have to produce hardware while new entrants require only a smartphone) and will also be perceived as locking customers into proprietary hardware.
Because the new entrants make money on software and/or transactions, they now have to worry about protecting their IP against software piracy, managing the software lifecycle associated with their apps (e.g. software delivery and software updates), managing customer software entitlements (since each customer might have different rights to the software) and tracking and charging for usage, if they make money on transactions. Read these related posts for information on these topics:
Share your stories of industrial use cases being transformed by smartphones.