The Network Effect: Open Source and the Internet of

Things

Michael KosterScott McNeil

Open Source Internet of Things

What is the Network Effect?

• As the number of participants in a network increase, so do the number of connections

• Each participant adds potential value

• Each connection adds potential value

• The total value potential of the network thus grows as an exponential function of the number of participants; Participants x Connections

• This is the Network Effect

M2M Creates Value

• Machine to Machine communication (M2M) creates value by connecting physical resources to software

• Improved Manageability, Utilization, Predictive Maintenance

• Conversion of Capital Assets to Managed Resources

Value Yet to be Created

• M2M can be used to create the Network Effect with connected resources

• As more physical resources are connected to software, they can potentially be managed as a single system

• Thus realizing the Network Effect as the number of potential software management connections to each resource increases

We’re not going in the right direction

• To date, M2M architectures have focused on Vertical Integration of the sensors, communication, and software

• Resulting in highly efficient Silos, with dedicated services, proprietary gateways, and fragmented interfaces

• Making it difficult, if not impossible, to realize the Network Effect

Today => Vertically Integrated Silos

Network Effect: IoT builds on M2M

• Emerging M2M standards will make M2M more accessible and ubiquitous

• But won’t fully enable the Network Effect

• Broad Interoperability is needed to achieve the next level

• Creation of exponential value with the Internet of Things by managing diverse resources together as single systems

Common Data Models and API

Open Horizontal Platform

• Focus on Web Scale Interoperability

• Common data models, event model, and REST API, supporting event-driven modular software running anywhere in the network

• Enables the Network Effect; diverse resources managed as larger system

• Disparate domains of manufacturing, automation, healthcare, transportation, global weather, home security, all brought together to create huge value networks

Open Source, Open Standards

• Software Integrates vertical market segments and knowledge domains together

• The Open Horizontal Platform will be used by everyone

• The platform is no longer a differentiator

• Permissive Open Source creates De Facto standards that are by nature free of royalty and license restrictions, usable by everyone

Like the Internet and the Web• The Internet and the WWW infrastructure is composed of

open standards and open source reference implementations

• Like the Internet, we want to insure fair and open access to the IoT by everyone

• Like the Internet, we need to build the IoT together as a community

• Asking for participation from Industry, Research, Standards bodies, Developers, and Entrepreneurs in a Community Consortium to build the Open Horizontal Platform for everyone

• OSIOT.org – The Open Source Internet of Things

The Open Horizontal Ecosystem