The Internet of Things: Milwaukee firms create smart products for new age

Cover Story


The Internet of Things will change the ways we live, work and play.

By 2020, there will be 50 billion “things” connected to the Internet. And according to Bell Pottinger Digital, businesses will spend more than $40 billion designing, implementing and operating this “Internet of Things” in 2015 alone.

The Internet of Things includes everything from high-tech consumer wearables such as the FitBit to home automation tools like the Nest thermostat. It encompasses monitoring tools for mining equipment and apps that help consumers monitor their appliances.

Several Milwaukee companies, from technology startups to manufacturing titans, have tied their products to the burgeoning Internet of Things and will play a role in the global advancement of the concept, which connects devices to make the things in our environment “smarter.”

Notifying a Chinese consumer of a fault in his water heater or alerting an American child that her mother is having a medical emergency are among the innovations made possible by Milwaukee companies using the Internet of Things.

Rockwell helps manufacturers use sensors to increase their efficiency.
Rockwell helps manufacturers use sensors to increase their efficiency.

Hardware, meet software

The Internet of Things is broadly defined as the intersection of hardware with software — the “things” that gather data and transmit it to computers.

“What I understand it to be is a device that has some sort of computing or processing power connected to the Internet,” said Matt Cordio, co-founder and chief executive officer of Startup Milwaukee. “It could be connected through Wi-Fi, it could be connected through a cellular connection, but it’s connected through a larger network.”

According to Michael Porter and James Heppelmann, who have written extensively about the IoT for the Harvard Business Review, several factors have converged to drive the rapid development of these smart devices: sensors and batteries have become increasingly miniaturized, and their energy efficiency has advanced significantly, making it feasible to effectively use them in a variety of products.

At the same time, computer processing and data storage have become relatively inexpensive, so it’s simple to store the massive data troves generated by the objects.

“I think there are tons of applications,” Cordio said. “The byproduct of it is a lot of data, creating a lot more…I think that’s where the Big Data aspect comes into it. All of these sensors that are connected to the Internet are collecting data.”

However, without the tools to analyze and apply this data, it’s just numbers.

That’s where inventive entrepreneurs and enterprising researchers work their magic. And several Milwaukee companies are at the center of the global shift from traditional products to smart things.

One of Porter and Heppelmann’s case studies is Milwaukee-based mining equipment manufacturer Joy Global Inc. The company has implemented sensors to monitor operating conditions, safety parameters and predictive service indicators for its equipment, which can be viewed at a mine control center on the surface while the equipment operates below the surface. Humans are then sent underground generally only when the sensors detect machinery issues that need attention.

Joy Global can also use that data to compare operating parameters at mines across the world for its benchmarking.

These kinds of industry innovations are changing what it means to be a manufacturing company, the authors say. The influx of connected products has created new competitors and new bases for competition, and has required manufacturers to adapt to the Internet of Things or get left in the dust.

Todd Teske, president and CEO of Wauwatosa-based Briggs & Stratton Corp., has been working to adapt to this changing definition of what it means to be a company that makes things. Briggs & Stratton makes a computerized standby generator that can transmit data to a smartphone application and let the owner know if the generator needs attention or repairs.

These kind of innovations — taking a “dumb” product and making it “smart”— are becoming more common in the manufacturing world as computing power increases and its cost decreases, Teske said.

“When you start to associate computing power with an engine, for example, you start to change the value proposition,” Teske said. “More information, from more computing power and more data, can ultimately change how people think about low-tech products.”

The key to capturing the value in these newly computerized products is having a chief information officer and a chief marketing officer who work together to effectively market the world of new information available to customers, he said.

That new wealth of data gives more knowledge to customers to help them achieve their goals with the products, Teske said. It also transforms manufacturers’ offerings to include data-driven analytics and problem-solving.

“It really comes down to where can we add value and what can we do well,” he said. “How do we provide power to people who need power to make their lives better? When you start to think about it that way versus ‘We make gasoline engines,’ it’s a whole different way of thinking about what you can do as a company. It really comes down to user-driven problem solving.”

A.O. Smith has installed modules on its smart water heaters that communicate with homeowners via a mobile app.
A.O. Smith has installed modules on its smart water heaters that communicate with homeowners via a mobile app.

Integrating the technology

Almost every object can use embedded technology to gather and transmit information. That provides a unique opportunity for Milwaukee’s industrial sector as it develops new products.

The world of industrial IoT includes both efficiencies in the production process and the tracking of “smart” products once they’re in the field.

Manufacturers already collect lots of data, but few of them have harnessed its potential and translated the raw numbers into useful information. Fewer than 14 percent of manufacturers in the United States have tied their machines to their enterprise networks to communicate information among departments, particularly between the factory floor and the office, said David Vasko, director of Advanced Technology Milwaukee Labs at Rockwell Automation Inc.

Milwaukee-based Rockwell, a leading global provider of industrial power, control and information solutions, has partnered with Cisco to help manufacturers make those connections. Companies can use plant floor operations technology in cooperation with business level information technology to make better decisions, Rockwell says.

The industrial Internet of Things can also help manufacturers harness the product data they collect in the field and use it to optimize the design of future products, Vasko said.

Industrial IoT’s applications include remote monitoring, which is utilized by companies such as Joy Global to track the performance of mining equipment that is underground or oil companies to monitor rigs that are at remote sites.

Rockwell develops devices and systems that make those applications possible, even when there’s limited Internet connectivity in remote areas.

For example, in the recent past an oil company might have paid for an inspector to travel to a piece of equipment in the field and determine whether it needs maintenance. Now, with remote asset performance management, the inspector can check on the equipment remotely and determine whether travel is necessary.

Manufacturers will see a dramatic shift in this smart product technology in the next several years, Vasko said.

“We’ll see more change in the next 10 years than we’ve seen in the previous 50 years,” he said. “The Internet of Things and the connectivity is really going to allow a shift in the way people do business.”

OnKol’s console helps adult children remotely monitor their elderly parents.
OnKol’s console helps adult children
remotely monitor their elderly parents.

Anticipating a need

There are opportunities for manufacturers on the consumer side, but it can be a challenge to predict what a customer wants before he or she wants it.

Milwaukee-based water heater and boiler manufacturer A.O. Smith Corp. began offering monitors and alerts on some commercial products in 2007 and on some residential products in late 2014.

The “smart” water heaters collect data using a Wi-Fi chip and the cloud, which communicates with an app that sends customers text messages or emails that let them know when there’s a problem in need of repair. Eventually, the company hopes to apply predictive maintenance to let a customer know before there’s a problem, so there’s no interruption in hot water.

A.O. Smith has been working to stay ahead of consumer trends in the Internet of Things space, preparing for demand it expects will increase down the road. At the moment, North American adoption rates are low as the company works to communicate the value proposition to customers, said Bob Heideman, senior vice president and chief technology officer.

“Convincing them that they should invest in it seems to be a little more of a challenge,” he said. “I think people are struggling with the value proposition around the Internet of Things. (But) there’s this whole other avenue of consumers coming along, and they are more interested in monitoring and controlling everything in their house.”

One approach A.O. Smith has taken is integrating its water heater monitoring into a larger smart home monitoring package from national home improvement chain Lowe’s, called Iris.

And in China, consumers have been more receptive to the idea of a Wi-Fi controlled water heater because of a cultural difference in how appliances are used.

“The Chinese are more energy-minded, so they’re more apt to go to their smartphone and reduce their elements or turn some of their energy off,” Heideman said.

There are security concerns for smart water heaters, just like for other Internet of Things devices. A malicious hacker could drastically increase someone’s hot water temperature and cause burns, which is why A.O. Smith is implementing safety measures into the products.

“You don’t want somebody just jumping in and changing the temperature from 120 to 160,” Heideman said.

Solving a problem

Milwaukee startup OnKol also uses the Internet of Things to target consumers. The company helps adults monitor their elderly parents’ health as they age. OnKol’s remote monitoring system transmits data from the parent to the child when certain things happen.

For example, a child could receive a text message when the parent takes a medication, or receives a phone call from an unknown number, or when an emergency button is pressed. The OnKol device reminds the parent to take his or her medications and pairs with medical devices such as blood pressure cuffs to transmit data to children.

It’s all done through the device’s radio connections, which include Wi-Fi, cellular, Bluetooth, Bluetooth LE, Zigbee, a USB port and a 315-MHz connection. The wide range of connection options allows the OnKol console to connect with users’ existing medical devices.

Founder and chief operating officer Marc Cayle came up with the idea when he owned three in-home health care companies, called Comfort Keepers. There were 250 caregivers hand-writing patients’ vitals on paper, and errors were common. That led him to invent a device that feeds the vitals data directly to another device to be distributed remotely.

Products that were already on the market were emergency response pendants that served one purpose — to get emergency help — in a reactive manner. Cayle wanted to catch health problems before an emergency occurred.

“We wanted to come up with something that was very preventative and realistic,” Cayle said. “Most seniors don’t use smartphones, so it’s specifically designed not to be tethered to a smartphone.”

OnKol is set up to be purchased by the adult child, then shipped to the parent and plugged in. The child can remotely program the device to his or her preferences.

The company, which is based in Startup Milwaukee’s 96square incubator, was founded in February 2013, and has raised $2.9 million in its venture capital and seed rounds. It is now raising a fund to manufacture the OnKol devices.

Joe Scanlin and Matt McCoy founded Milwaukee startup Scanalytics.
Joe Scanlin and Matt McCoy founded Milwaukee startup Scanalytics.

Educating the environment

Scanalytics is another Milwaukee startup utilizing the concept of the Internet of Things to harness data.

The company, which was founded in 2012, has created floor mats that track the movement patterns of customers in a retail store or at a business conference using sensors. The sensors send information to the cloud, where Scanalytics runs algorithms to translate it into useful information and then sends it to a user dashboard on its website. From there, users have the option to set up real-time notifications for certain customer behavior.

The goal is to provide retailers with usable information about how long a customer stands near a product or video, and even real-time data that directs a salesperson to approach a customer after they have been standing near something for a few minutes.

“What we’re able to do is understand individuals moving through a space,” said Matt McCoy, chief operating officer. “Your marketing efforts bring people through the door—now how do you take the people coming through the door and convert (them to customers).”

One of Scanalytics’ largest clients is Madison-based bike manufacturer Trek Bicycle Corp., which has used retail movement tracking to gain insights about customer behavior.

“By its ease of use, we’ve done some deployments for retailers in the area who just wanted it for the holiday season,” McCoy said.

Scanalytics’ sensors could have applications in a variety of industry verticals, including home automation, said Joe Scanlin, CEO and co-founder. If they’re placed under the carpet next to an individual’s bed, the sensors could communicate with devices in a smart home to indicate the person is awake, and to start brewing coffee or adjust the temperature.

The data from the floor sensors could also be used to empower the physical environment to learn homeowners’ behaviors and adjust accordingly. If a user doesn’t enter a certain room very often, the automated home could turn the temperature down unless the room is in use.

In this way, Scanalytics’ sensors could help tie together some of the disparate devices that make up the Internet of Things ecosystem.

“By understanding the traffic, the dwell patterns and ‘if this, then that,’ we’re hoping to make most physical spaces smarter,” McCoy said.

An evolving ecosystem

Some call the Internet of Things the Internet of Everything because it’s so broad and could have so many applications. It’s an enormous and ever-changing world that futurist Richard Yonck describes as an ecosystem of electronic devices and data flows.

So, what’s next in the field of IoT?

“Expect a lot more of it,” Cordio said. “I think that as sensors get cheaper, as it gets cheaper to connect things to cellular networks and Wi-Fi networks, I think you’re going to see a lot more sensors doing a lot more things.”

“I think it’s here to stay,” Yonck said. “The Internet of Things in many ways is the eyes and ears of big data. It’s the sensor flow that is going to fill in the funnel for big data.”

As connectivity becomes commonplace, privacy and security are major concerns for the field.

“I think that Americans are growing more and more concerned about privacy,” Cordio said. “I’m not creeped out by any of this stuff, but I could imagine people would be.”

One problem with improving security and privacy is the number of different standardizations and best practices being established in a field that is being developed in a decentralized manner, said Yonck, who serves as executive director at Seattle-based Intelligent Future Consulting.

“Security, privacy, connectivity, all of these could go really haywire without us having some degree of standardization,” Yonck said. “In order to have that real benefit, we have to have standards of readable data types and database structures.”

All the data being collected about people’s movements and behaviors in this sensor-filled environment, while scrubbed of personal identifiers, can have a “big brother” effect that does not sit well with some.

And the sheer amount of data will grow ever larger as more of the environment begins collecting information, which presents additional opportunities for cybercrime, Yonck said.

“What the Internet of Things stands to be in terms of its promise is an increasing connectivity and growing intelligence of nearly everything in our environment,” Yonck said.

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Molly Dill, former BizTimes Milwaukee managing editor.

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