Products That Play It Smart
CSOM Professor of Information Systems Mary Cronin talks about her new book, Smart Products, Smarter Services
ByCarroll School of Management Professor of Information Systems Mary Cronin has just published a new book, Smart Products, Smarter Services, which looks at business strategies behind the technology embedded in smart phones, intelligent autos, and medical and energy devices. Cronin, who teaches courses on e-commerce to undergraduates and IT management for MBA students, is on the editorial board of the journal Electronic Markets.
What convinced you to write a book about smart products?
It’s part of the trajectory of the work I’ve been doing. I started writing about the Internet in the 1990s, starting with books for business readers on Internet strategies. In the past decade, I focused on mobile applications and wireless enterprise strategies. I teach in both areas. I was looking for a new technology area that seemed likely to disrupt industry leaders and create new business opportunities. I got very interested in the emergence of ubiquitous wireless connectivity in combination with embedded intelligence in many of the products we see these days.
What is a “smart” product?
This book defines smart products as network-connected consumer items with embedded microprocessors and software designed to manage various aspects of the product’s functionality. The smart parts of the smart products are microprocessors and micro controllers. The most widely known is the iPhone and others branded as smart phones. But there are e-readers, medical devices, wireless personal health and home health monitoring devices. Everything from cardio vascular monitors to glucose monitors to smart band aids to smart pills, which contain tiny chips able to communicate health information to a patch you wear on your body.
There are all sorts of areas and industries that are being impacted by this combination of embedded intelligence and wireless connectivity. I saw this happening, I wanted to understand the technology, and I thought it was going to have a big impact on business strategy in the future.
You write about products having minds of their own. What is the significance of that?
There is a trade-off in adding intelligence to products to make them able to be more predictive or more responsive or more able to anticipate and deal with certain situations. Sometimes the manufacturer or system provider chooses to bake those functions into the product. Embedded intelligence can be used – for example in entertainment and media devices – to control product behavior. Often that is not necessarily in the interests of the owner of the product – such as to restrict copying or restrict use.
On the other hand, we’ve come a long way in auto safety because of embedded sensors and systems that warn the driver of collision danger or changes in car performance. Another feature of embedded intelligence and network connectivity is the vendor can reach out to the product, as long as it is connected to the network, long after it has been bought and paid for and make changes to the product’s functionality. In some instances, that’s great. The consumer doesn’t have to update it to get the latest features.
In other instances, and there have been famous ones with the iPhone and the Kindle, it’s not so great because you didn’t want those changes to be made, but the vendor made them anyway. I look at the pros and cons of this as to how companies are using the capabilities of smart products to differentiate their service or to control consumer options. It’s a spectrum.
Explain the second half of the title, “smarter services.”
Delivering smarter services requires enabling and maintaining a smart product ecosystem that supports and enhances the product over time. A well-known example is Apple. The iPhone breakthrough wasn’t just the design of the phone. The breakthrough was Apple’s ecosystem where developers and content providers were eager to make more and more value-added content and services available for iPhones and other Apple devices. They were able to add value to the phone through its applications, through managing the App Store and its content. That is one example of smarter services.
Do smart products and smarter services make us smarter people?
What we own is smarter than we often think. Sometimes smart products are designed to be helpful to us and sometimes they are designed to monitor and control what we’re doing even when we don’t necessarily want that. I think consumers need to become smarter and be more proactive in finding out what the devices we use in our everyday lives are tracking and evaluate for ourselves whether we want that or not.
Do you ever get the sense there could be a rebellion against these consumer items?
I certainly do and in the book I talk about the pros and cons of control. I look at what controls are permission-based or consumer-endorsed and what controls are in a sense adversarial to consumers and prevent them from doing what they would otherwise want to do.
A very simplistic embedded intelligence is the barrier in ink cartridges to the interoperability with different kinds of printers. There’s a small code in the cartridges that prevents a Dell printer from using a generic cartridge. That barrier to generic ink cartridges is very important to the profit margin of printer manufacturers. It’s something that is primarily useful to the manufacturer. That’s a classic example of a strategy to control the market and make more profit through embedded intelligence.
There have been backlashes against these technologies, but not to the extent some consumer advocates expected. As I branched out from consumer entertainment and mobile products to smart products in health care and automotive safety and to energy monitoring, the benefits of smart products became clearer and more exciting.
In a sense, we’re transcending that moment where embedded intelligence was used mainly for consumer control. Today’s companies are looking at using smart products and services to create entirely new markets and types of services. That’s what’s so exciting. There is the potential for transforming business models and entire industry sectors when companies really take advantage of smart product capabilities.