Global CIO: What CIOs Can Learn From Kindle

When Amazon deleted copies of Animal Farm from Kindle e-reader devices this summer, we all freaked out a bit. Literally overnight, it hit us just how powerful a constant wireless connection could be between a device and the company that controls it.

CIOs would do well to spend time thinking about that power, and looking for ways inside their companies to take advantage of machine-to-machine wireless connections. While technically possible for decades, and widely used in a few industries, machine-to-machine wireless connections are getting a fresh look--and a major push from the wireless carriers. Hopefully, it'll all go better than the Animal Farm incident.

Machine-to-machine connections, from consumer gadgets to business devices like a natural gas meter, represent the next tsunami of wireless data. And it's one big reason CIOs must pay attention to wireless telecom network capabilities, as they help their companies size up new opportunities. Our magazine's cover story this week delves into wireless networks, exploring the performance limitations and key issues for CIOs to watch. (Download it from our Recommended Reading list at the end of this article.) FCC Chairman Julius Genachowski warns of a "looming spectrum crisis," and our story describes how IT leaders should manage for that risk, including deciding the best applications to mobilize over smartphones.

Yet adapting apps to smartphones is the easy wireless opportunity for CIOs. IT is expected to take the lead on that one. It's a different story with many machine-to-machine ideas, which won't fall neatly into any one team's job description. That's why IT leaders need to go searching for these opportunities.

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Consider something like Coca-Cola's Freestyle, an experimental fountain drink dispenser we've written about before. Freestyle, among its many innovations, wirelessly sends consumption data back to Coke headquarters. Coke shares the consumption data with restaurants, which might make it a more valuable partner without putting any demands on the restaurant's network. That project took collaboration across marketing, engineering, IT, and other groups.

IT leaders could be the ones to spot opportunities like that in their businesses. They can start by asking, "Is there data we've always wanted, but haven't been able to get? Is there data our customers have always wanted, that we haven't been able to give them?" Wireless data might make it possible. Why Now

Wireless carriers are highly motivated to sell in this market today. Sprint this month created what it's calling its Emerging Solutions group, focused entirely on helping businesses quickly ramp up machine-to-machine systems. AT&T just snatched the contract for connectivity of new Kindle models from Sprint, touting its more global GSM network for such links along the way. Verizon Wireless and Qualcomm formed a joint venture in August, nPhase, to help manufacturers across industries build machine-to-machine networks into their products.

Wayne Ward, VP of Sprint's new Emerging Solutions group, offers four "why now?" reasons for machine-to-machine wireless is gaining momentum:

Electronics such as Amazon's wireless Kindle have already shown how they can shake up a market, inspiring imitators as well as lawsuits. I'm not sure how wide the consumer machine-to-machine market will spread beyond electronics--I still haven't figured out why my refrigerator needs an Internet connection, even if it's wireless. Some real-world products out there, such as Ford's wireless in-dash computer for its pickups, feel like a niche to me.

But in the enterprise adoption of wireless alongside everyday business devices, CIOs have an opportunity to drive value. In our cover story, we write about Follett's using wireless telecom networks when it opens a new bookstore, running the entire operating including transferring point of sale data on wireless until it gets wirelines in. Some of the hundreds of millions in tax dollars going for smart grids will be spent on wireless gas and electricity meters, providing for more efficient data collection and more real-time data sharing with customers. Healthcare's a largely untapped market. Cellular machine-to-machine connections will about triple from their current number of about 75 million by 2014, estimates ABI Research.

In agriculture, I talked with a farmer in Modesto, Calif., this week who has soil probes and weather stations across his 1,500 acres of fruit and almonds, taking readings every 15 minutes and sending them by a cellular link to a data center, which he accesses over the Web. "I think we've just scratched the surface of what the use of this is," says Derk VanKonynenburg, one of the partners on BK Farms, who uses the data in deciding when and how much to water.

There are, of course, limits to the advantages of connectivity and more data. Some of the machine-to-machine excitement sounds like the RFID fever earlier this decade, when data gathering by tagging products with radio frequency ID tags promised to broadly revamp supply chains. Instead, many of RFID's successes have come in solving very tightly focused business problems that begged for better data. Not a bad place to start for people looking for place to apply machine-to-machine wireless data in their own companies.