Alan Murray recently shared in this space his enthusiasm for a technology revolution known as the Internet of Things. He, like others, clearly detects the smell of money in the air, and he cited a recent 186-page report by Tata Consulting Services to validate that there’s a really big business development afoot. Tata found, for example, 26 companies that will spend at least $1 billion this year on initiatives related to the trend.
Something big certainly is going on, and I’m particularly intrigued by the proliferation of more powerful and less expensive sensors for all sorts of applications that weren’t possible just a few years ago.
That said, I’m sniffing a somewhat different odor when it comes to the Internet of Things, and that’s whatever scent snake oil gives off. Tata, in fact, begins its report by noting that it’s understandable to be wary of what might be the “latest gadgets-gone-gaga trend.” Well said, even if Tata then moves quickly to dispel such concerns. It writes, for example, that 79% of respondents to a recent survey use “IoT” technologies to track customers, products, facilities, and supply chains. That’s interesting, but it’s not new. (RFID, anyone?) Tata also notes that “companies with IoT programs in place reported an average increase of 16% in 2014, in areas of business where IoT initiatives were deployed.” One needn’t have a vivid imagination to picture the sales pitch that follows … ‘And let us tell you how a consulting engagement with Tata will make you more IoT savvy!’
Having lived through the collapse of the Internet bubble, my beef with the Internet of Things is less conceptual than definitional. My hunch is that Tata’s respondents are as quick to label their “IoT” accomplishments as clueless companies were 15 years ago to slap a “dot-com” on their names. In fact, there isn’t a valid description of just what the Internet of Things is, meaning any company can re-label existing projects to suit the current fad. Tata shows how it’s done by profiling a handful of big-company success stories. One is HP, which touts its “HP Print Channel” service that uses the company’s “IoT-enabled printers” to let consumers automatically print Instagram photos from their mobile devices. I’ve been printing at home with my outstanding wireless HP “Envy” printer for several years now, even before it was “IoT-enabled.”
Make no mistake, the Internet of Things is a thing. Sam Whitmore, a consultant to tech-industry publicists, recently noted to his clients that “IoT fever is off the chart” and proceeded to advise them on how to pitch stories about it to journalists. Headlines in a newsletter called MediaPost’s IoT Daily (tagline: “Marketing to the Internet of Things”) recently included “IoT Seen as the New Face of Media Consumption” and “’Smart’ Mailboxes Could Message Consumers.”
The trend is your friend, as the saying goes—so long as you understand what it does and doesn’t mean.
• Vox becomes a “unicorn”
Vox Media announced a $200 million round of funding from NBC Universal, lifting the digital media firm’s value to more than $1 billion – enough for startup “unicorn” status. The funding isn’t just an investment from NBCU’s perspective, as the companies will collaborate on things like video programming and advertising. They will also cross-promote content and launch new franchises together.
• News Corp may sell Amplify
While Vox represents the future of media, Wall Street Journal publisher News Corp is a member of the old guard – a group that has seen ad revenue slump as print publications cede business to upstart rivals like Vox. As such, older media companies are on the hunt to diversify. But the latest results by News Corp highlight how hard that can be, as News Corp took a massive $371 million charge related to the digital education brand Amplify. The company’s effort to reshape education hasn’t gone as planned, and News Corp executives hinted a sale was likely soon.
• Tinder breaks up with CEO
Dating app Tinder’s CEO Chris Payne is stepping down after five months on the job, with co-founder and president Sean Rad taking over again, according to Re/code. Payne came from eBay, while also previously working at Microsoft and Amazon. He was brought on to help Tinder make money with the launch of the company’s first paid product, though one board member told Re/code it became clear he wasn’t as good a fit as anticipated.
• Alibaba’s latest troubles
Before Wednesday, Alibaba’s shares had fallen about 35% from its November 2014 highs, partly hurt by worries about the economic slowdown in China where the e-commerce giant is based. And while the latest quarterly report included a 28% jump in revenue, investors wanted more, sending shares down about 5% in after-hours trading. In a move to help the stock price, Alibaba announced a $4 billion share buyback program over two years.
New York Times (subscription required)
Around the Water Cooler
• Apple pivots on iPad strategy
Apple has sold millions of iPads to consumers for at-home use. The gadgets maker now wants to make a greater push into the business world. Why? Well, iPad sales have dramatically slowed recently, including an 18% drop in unit sales in the most recent quarter, so it makes sense that Apple wants to try to convince businesses that the iPad can be a helpful workplace tool. WSJ says some $2 trillion is spent annually on workplace technology, a market Apple has never been a big player in.
WSJ (subscription required)
• Squatters stake claim on “.xyz” names
Thousands of people are buying “.xyz” website names like “googlecars.xyz” and googledocs.xyz” in the hopes that Google – which is folding itself into a new holding company called Alphabet – will one day want those Internet domains. So-called squatters are known to acquire website names that suggest familiar brands, sometimes hoping a company like Google will pay them for the domain or possibly to place cheap ads on the site to make money.
• The firms with the highest CEO pay gap
Last week, we pointed to a USA Today report that showed there were three Standard & Poor’s 500 CEOs paid less than their company’s median employee pay. Today, a story calls out the 11 CEOs who make the most money compared to their staff, including the leaders of McDonald’s, Community Health Systems and Priceline. The reason the pay gap has become such a hot-button topic is the U.S. Securities and Exchange Commission recently approved a requirement that will make public companies disclose a similar metric annually. That decision will likely raise more questions about how much top executives are paid.