Fred Hoch, CEO of the Illinois Technology Association (ITA), opened a day long series of panels this November to “discuss the future of the internet industry–the internet of things.” ITA organized the conference along with First Analysis, a Chicago-based bank specializing in technology.
The phrase internet of things refers to technologies, connected to the internet, that transmit data between the internet connected objects and a database. Guest speakers at the ITA panel drew distinctions between connected personal devices, connected homes, and connected machines. Some of the technologies discussed included collecting data from smart devices that measure heart rate, installing smart meters in homes that measure energy usage and transmit that information to a database, and investing in machines that transmit data and alerts during manufacturing or shipping. The idea of the smart city was also discussed–smart cities involve analyzing and interpreting data collected from a connected grid of public resources.
At a different talk held this October, John Tolva spoke about the City of Chicago Technology Plan at the Open Government Meetup at Chicago Community Trust in downtown Chicago, just days before leaving his position as Chicago’s Chief Technology Officer for the Pritzker Group. The Technology Plan includes commitments to utilize data efficiently, develop the windy grid, and apply data science for improved safety, fraud detection, and optimization of city services.
In addition to strengthening infrastructure, Tolva says the City of Chicago wants to turn the City into a place for digital companies to test their wares. A prime example of this is Divvy. According to Tolva, Divvy is part of a new class of data generating products on the way to Chicago.
When talking to venture capitalists, Tolva says Chicago’s strengths are “the deep coalitions of organizations and talent, core intellectual and research capital in universities, and a diverse customer base to aim new products at.”
Chicago’s data technology initiatives have garnered national attention. This March, Chicago won $1M from the Bloomberg Philanthropies analytics challenge for implementing the city data portal. Next steps for the data technology initiative involve what Tolva describes as an “enterprise-wide implementation of technology in Chicago that capitalizes on virtualization and consolidating local government and that focuses resources on innovative tech solutions.” The Bloomberg prize money is for a city-wide real-time analytics platform.
From a data science perspective, there are multiple value propositions behind the Internet of Things, including analyzing sets of data about yourself collected from wearable devices, data about your home collected through WiFi enabled from objects like energy meters and refrigerators, data about a city collected from objects like bicycle rentals or street lights, and data on manufacturing and shipping processes.
According to Howard Smith, Managing Director at First Analysis, cellular companies have huge influence in this market. Whenever routers are used to transmit data from objects to a database, cellular providers have huge influence in the success of the technology. Right now, Verizon is advertising machine-to-machine data transmission technology that allows company’s to collect data from machinery and delivery vehicles and increase their efficiency. And AT&T is offering Digital Life, a home security solution that uses sensors, cameras, and smartphone to collect and transmit notifications on your pets, your thermostat, and the security of your front door.
Silicon Valley Bank, a bank with a large venture capital branch based in California, published a report on the Internet of Things this July. According to SVB, a lot of inventions that fall within the internet of things lack use cases, and this is a risk factor for investors. While the success of machine-to-machine communications is well-documented, new technologies aimed at consumers are riskier. According to the report, the strongest sectors for internet of things technologies are enablement technologies, connected health, and energy & the environment.
Some startups are creating technologies related to the internet of things. There are over a hundred and twenty startup companies listed on Angel.co with products in this market. As of this November, their average valuation is $4.4M.
Here in Chicago, TempoDB, part of the Hyde Park Angels portfolio and Catapult Chicago alumni company, is gaining traction with their database software solution for analyzing time stamped data collected from sensors and meters. Co-founders Justin DeLay, Andrew Cronk, and Michael Yagley raised $3.2M in series A funding this year to grow their team and expand the company’s reach.
Connected devices are an idea that companies like General Electric want you to get excited about. This fall, GE Garages sponsored a pop up shop on Michigan Ave. devoted to 3D printing and manufacturing to get Chicagoans excited about manufacturing technology. The garage included hands on projects with manufacturing machinery and weekly workshops, including a workshop on building a weather clock—an internet of things device that displays a symbol like a sun or a rain cloud after communicating with weather.com. ❒
[Top Photo: A weather clock which displays a symbol after communicating with the internet. Photo by Dabney Lyles. © Blackline Review]