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The new paradigm asks new questions and demands new answers
In any given week, we speak to quite a few technology supplier companies about the advent of the M2M / Pervasive Internet era. In most cases, the first questions we hear go something like, “Which industries and applications are utilizing M2M and wireless sensor networking technologies today? What is the profile of the typical adopter?”

The answers to questions like those are much more complex than they used to be. But more importantly, the questions themselves can lead down an unproductive path. M2M is still an emergent market composed largely of “pioneers.” True, some industry segments show more motion than others, but market segmentation and behavior can best be described as “leader” versus “laggard.” Yet even as adoption of pervasive technologies matures, “product-centric” segmentation based on traditional descriptors such as industries or application segments will likely prove to be misleading and not particularly useful in strategic decision making.

What we try to tell people is that the Pervasive Internet represents a profound paradigm-shift in the application of information technology to business. In the previous paradigm, questions like the ones quoted above made perfect sense. In the new paradigm, they’re almost beside the point.

Networked products and solutions demand new customer understanding
This is because we are entering the age of the networked solution, where all the rules concerning segmentation and competitive differentiation for product and device manufacturers change. The focus is no longer on products per se, but on new solutions and services enabled by smart, networked products that are deeply integrated into an equally new real-time enterprise.

Effective strategy is always linked to customer needs. Traditional “product-driven” strategy is strongly based on relatively straightforward characteristics. Classically, these have been referred to as “innovation-driven,” “customer intimacy-driven,” or “operating excellence-driven” strategies. Each of these is actually geared directly to the product requirements of certain types of buyers. In the first case, we might call them “power users,” in the second, “solutionists,” and in the third, “bargain hunters.” Historically, a company following any one of these strategies would develop a clear and useful understanding of the requirements of that particular type of buyer, incorporating those needs into marketing, distribution, and product development in a seamless way.

And yet most suppliers—and most buyers—are not at these extreme ends of the market. They live somewhere in the middle, and the middle can be dangerous ground. The situation worsens in the case of networked device solutions, which are much more services-driven than they are product-driven.

Figure 1: Traditional Segmentation Doesn’t Meet the Needs of the Pervasive Era

Click the image for a larger on-screen version. Source: Harbor Research, Inc.

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Smart products and remote monitoring give “closeness to customer” a whole new meaning
Middle strategies do not bring an “implied” segmentation with them. Accurate understanding of customer needs can change a middle course from a muddle to a good match. Adopters of device networking have priorities that depart from simple product cost, features, and other traditional considerations. M2M is about the application of a device and its impact on the end-user throughout the entire life-cycle of use. Failing to understand evolving customer needs means failing to maximize market penetration and growth.

Here’s a recent example. Semacode.org has released a free, open system that lets camera phones read special barcodes (called semacodes) on physical objects, and then instantly bring up information about the tagged object in the phone’s Web browser. The camera phone thus becomes a mobile sensor for “real-world hyperlinks,” operating in what MIT’s Auto-ID Center called “an Internet of things.” The Semacode system elicited this comment from a Microsoft researcher: “It’s a great project and it’s enormously resonant with what we’re trying to do.”

People have already put semacodes on San Francisco bus stops to track GPS-enabled mass transit vehicles, and on concert posters to enable instant ticket ordering for the event. Semacodes could easily be placed on business cards, conference badges, employee uniforms, and retail products. Our point here is that the owner of the camera phone did not buy it to read hyperlinks attached to objects in the real world. The possibility didn’t even exist. And yet because of wireless connectivity, the protocols of Web-enabled databases, and the inherent intelligence of the mobile phone platform, this entirely new and quite revolutionary application has arrived—in free and open form, no less. And this will keep on happening in the Pervasive Internet, in untold ways.

Figure 2: Segmenting Needs and Behaviors of Device Networking Solutions

Click the image for a larger on-screen version. Source: Harbor Research, Inc.

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Different customer-types present different motivations, needs, and opportunities
Every company still has to segment its markets and customers. But segmentation based on traditional parameters does not go to the heart of demand in a world of intelligent, connected products. Those old parameters are now only distant proxies for new customer needs. Suppliers who want to address the myriad opportunities in the M2M and pervasive computing space need a qualitative model of the types of buyers in their potential markets—a set of “buyer personality types.” In-depth understanding of the varieties of customer behavior patterns is the key to a truly usable segmentation. If suppliers can do this well, they will facilitate new sales, service, and channels strategies, new marketing functions, and also provide valuable inputs to the solution-design process.

Needs drive demand. Segmentation is the demand-side picture of differentiation. If suppliers are to compete profitably, they must focus their marketing and sales efforts in those areas where they have the greatest advantage. The world will not beat a path to their doors. They cannot afford to design and build an integrated solution and a “go to market” alliance and fulfillment scheme on the basis of vague assumptions about the match between user needs and their solution offering.

Needs-based segmentation is not a replacement for information about industry and applications; it augments that information. It is an attempt to characterize potential customers by the things that relate most closely to how they buy, what they buy, and why they buy it—in other words, their needs.

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Who We Are and What We Offer.
Harbor Research Inc. has been providing strategic consulting and research services to leaders in communications, computing, control, and content since 1983. The firm has built relationships with larger multi-line companies including AT&T, ABB, General Electric, Danaher, Eaton, Emerson, Hewlett Packard, Honeywell, Hughes, IBM, Intel, Invensys, Lucent, Motorola, Rockwell, Siemens, and Texas Instruments, as well as focused growth companies such as EMC, Cadence Design, Conexant, Qualcomm, and SAP.

We also continue to work for a broad array of emergent start-ups and pre-IPO technology ventures. We have built relationships with a number of significant M2M / Pervasive Internet players, including Cimetrics, DataSweep, eDevice, Ember, emWare, Questra, Wireless Innovation, and Xsilogy, to name a few.

Harbor is organized around emergent and disruptive opportunities in high technology, with a unique focus on the impact of the Pervasive Internet—the use of the Internet to accomplish global device networking that will revolutionize business by unleashing entirely new modes of system optimization, customer relationships, and service delivery.

We provide studies, workshops, briefings, research retainers, and consulting engagements of uniquely high value to both technology suppliers and adopters. For more information, please contact us.

Harbor’s new online platform for research services offers continually updated intelligence and stunning data-visualization.

Static, printed reports can’t track the complex ecosystems and warp-speed pace of high tech. SmartSphere® projects can.

The brains of the Web. The brawn of server databases. The beauty of a CD-ROM.
For nearly ten years, we’ve been waiting for Web media to get good enough to let us do this. It’s finally here. Harbor SmartSphere® re-invents the whole concept of delivering research value. It’s to business research what the Pervasive Internet will be to business itself: a huge injection of dynamic intelligence and sheer voltage. SmartSphere® is online, interactive, dynamic, and visualized. There’s nothing static, rigid, or dead about it. Eventually, we at Harbor will do everything in SmartSphere® that we used to do on paper, and we’ll do it better. And you can, too. in a custom-configured project of your own, SmartSphere® can be anything you want it to be.

And yes, you can get printed reports. We’ve re-invented those, too. Not fixed, one-size-fits-all printed reports, but custom printed reports that you configure and SmartSphere® creates for you on the fly in PDF format.

See SmartSphere® and find out more right now:

1. Visit our free, live SmartSphere® demonstration. They say pictures are worth a thousand words. So what are they worth if they’re pictures of your whole world, and you can fly around inside the pictures with your mouse?
2. Download a brochure on the SmartSphere® research platform and services (PDF, 970 KB).
3. Download a brochure about our SmartSphere® “living research” projects on the M2M/Pervasive Internet phenomenon (PDF, 240 KB).

A small portion of an interactive Harbor SphereMap™. This one portrays a company’s world. You “fly around” the map by dragging it with your mouse, bringing into focus any area you want to explore. You see a company’s peers, investors, products, and alliance-structure at a glance. Clicking nodes fetches additional information from the database. Shift-clicking nodes creates new maps of other companies—and maps of markets, too.

Projects, projects, projects. Ours, and yours.
SmartSphere® is an online platform that Harbor uses to deliver Web-based services. You don’t buy SmartSphere® the way you buy a program for your computer. You buy access to one or more SmartSphere® projects. We define projects of our own on important high-tech subjects, and clients can subscribe to those projects. Clients can also define their own custom (and completely private) projects.

SmartSphere® projects are laser-focused on their subjects. No waste, no fluff, no irrelevance. A SmartSphere® project delivers continually updated information on whatever the project has been defined to track. Some of that information is created in the good old-fashioned way, by experienced researchers and analysts. And some of it is created with 21^st century tools like automated news feeds and Web-based info services. Every time you log in to a project, there’s new information—freshly tracked events, new company alliances, new company and market comparisons, enhanced company, market, and technology profiles, and insightful Harbor commentary and analysis.

When you visit our SmartSphere® demonstration, you’ll see a limited version of our own “Pervasive Internet Suppliers” project. Bear in mind that the free demo offers limited information and functionality. The full “Pervasive Internet Suppliers” project, for example, was created to replace and improve our own earlier online publication, Pervasive Internet Report.

Custom SmartSphere® projects. Your secret weapon has arrived.
You’ve heard about some of our SmartSphere® projects. Now let’s talk about yours. Does your company have business development, M&A, R&D, or sales and marketing goals? We hope the answer is yes. How would you like “living business intelligence”™ on the companies that interest or worry you? Or on the markets and technologies that are defining your future? A custom SmartSphere® project is the perfect way to do that. “Living business intelligence”™ means research that is laser-focused on your targets, and continually updated for as long as you need it.

Any collection of companies, markets, or technologies can become the backbone of a SmartSphere® project. You define who or what they are. You define what you want to track about them, and how you’d like to rank or score or weight them. You define the types of cross-company or cross-market comparisons you’d like to see.

Take action and take control.
If you’ve read this much about SmartSphere® without clicking something, it’s time to click. Here are those links once again.

1. Visit our free, live SmartSphere® demonstration.
2. Download a brochure on the SmartSphere® research platform and services (PDF, 970 KB).
3. Download a brochure about our SmartSphere® “living research” projects on the M2M/Pervasive Internet phenomenon (PDF, 240 KB).