Big data, the Internet of Things and the CIO
Joi Ito, director of MIT Media Lab
Image: Dan Burn-Forti
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Big data, the Internet of Things and the CIO

January 2012

IT leaders will need to up their game if their organizations are to take full advantage of the IT megatrends that will define this decade.

For Joi Ito, tech entrepreneur, venture capitalist and director of MIT Media Lab, the dawning of two eras — Big Data and the Internet of Things — will bring with them major challenges for CIOs. “The role used to be a lot of MIS [management information systems] stuff, buying the packages and services offered by the likes of SAP or Salesforce. But it’s now a completely different world, where CIOs need to have a lot more internal IT capability.”

One of the single biggest opportunities for businesses, he believes, will result from the vast amounts of data that organizations — and objects — will produce and the value this can create for everything from supply chains to new product development. The key is to be able to handle that Big Data and the increased complexity it brings in a way that leads to value-adding innovation. Ito believes technology leaders have a do-or-die role to play here, and hands out a stark warning: “Any CIO of any company should be figuring this out. Because the other part of the story is that Internet companies like the Googles and the Facebooks are coming to a sector near you — real soon. You can no longer assume your competitors are the people who are already in your space.”

He likens the challenge to the advent of widespread Internet adoption by the public in the 1990s. “From a company’s perspective, if you didn’t understand the Internet, you weren’t going to be very competitive,” says Ito. “Similarly, if you don’t understand big data, you’re no longer going to be competitive. Understanding how to work in a relatively chaotic, open system with tremendous amounts of data is now essential. And it’s not just the data guys: everybody needs to understand their role in this ecosystem.”

Learning to manage such growing complexity in large corporations will be key to survival, he stresses — otherwise CIOs will find themselves under threat from smaller, nimbler competitors. A big part of this, for all leaders, will be to decentralize decision-making to create more agile, faster-moving business units that function more like start-ups.

“Central planning doesn’t work in complex systems,” he argues. “The world has become so complex and so fast that sitting around thinking about whether to do something often costs more than actually doing it.”

He throws out an example from his own experience of what he refers to as ‘Lean’ start-ups. “You can build a minimum viable product [Silicon Valley-speak for one that is not necessarily perfect, but good enough for customer testing] for just about any Internet consumer service for $30,000. And the average executive retreat probably costs $1 million. So the trick is to empower people to innovate at the edges — and then figure out what are the successes and failures. In such a context, “planning is overrated,” he contends.
Things that think

Another key agenda-changer, says the serial entrepreneur, will be the rise of connected devices, where almost every object imaginable — from computers to cars, from phones to fridges, from medical equipment to items of clothing — will become connected to one vast digital network, creating an Internet of Things. 


For Ito, we shouldn’t be surprised about this; to his visionary mind, the Internet of Things has been waiting to be discovered since the birth of the ’Net itself four decades ago. Indeed, in his characteristic low-key manner, he describes the path to the massively connected world of tomorrow as simply, “the marching forward of the Internet on a very predictable and long-term path. The Internet was really a philosophy of trying to make open standards so that things would interoperate — and the Internet of Things is just an extension of that.”

That’s not to say the Internet of Things doesn’t sits high on Ito’s agenda; quite the contrary. In fact, the Media Lab’s ‘Things That Think’ initiative is its largest collaborative consortium project, and includes backers such as Fujitsu, Bank of America and consumer packaged goods group P&G. Its aim: “Inventing the future of digitally augmented objects and environments.”

“Everything was already starting to talk to each other, and now it’s all starting to come together into one network,” he adds. “We’re taking the communications protocols, standardizing them and making them accessible so we can now do things like big data and better communications.”

This will lead to widespread transformation for business and society, the visionary expects: “Quantitative differences end up with qualitative change… and so the Internet of Things will fundamentally change the way we do things.”

What CIOs might need to do in response to big data is take a page out of Ito’s book and look to innovative fast and cheap – or to use his analogy of trying to “think like a Lean start-up.”

“If you look at the explosion of consumer Internet companies in Silicon Valley, it comes from the open Internet lowering the costs of distribution and communication, free and open source software lowering the cost of software development — and Moore’s law driving down the price of computing power,” he points out.

“Developing a minimum viable product became so cheap that you could do it without real investment. In turn, that generated the ability to try everything and then invest in those things that add growth, rather than spend $10 million just to see if it works. That’s now happening in hardware.”

The drivers for this, he explains, are more transparent supply chains, more accessible manufacturing techniques and easier physical prototyping, thanks to the growing availability, and reduced cost, of technologies such as 3-D printing and laser-cutting.

Are you the CIO still thinking of how to buy SAP the easiest way – or one thinking about how to put such technologies to work to help the business?

First published January 2012
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