The third wave of computing

October 3, 2013, 9:00 AM UTC

FORTUNE — We have entered a new age of embedded, intuitive computing in which our homes, cars, stores, farms, and factories have the ability to think, sense, understand, and respond to our needs. It’s not science fiction, but the dawn of a new era.

Most people might not realize it yet, but we are already feeling the impact of what’s known as the third wave of computing. In small but significant ways it is helping us live safer, healthier, and more secure lives. If you drive a 2014 Mercedes Benz, for example, an “intelligent” system endeavors to keep you from hitting a pedestrian. A farmer in Nigeria relies on weather sensors that communicate with his mobile device. Forgot your medication? A new pill bottle from AdhereTech reminds you via text or automated phone messages that it’s time to take a pill.

Technology is being integrated into our natural behaviors, with real-time data connecting our physical and digital worlds. With this dramatic shift in our relationship to technology, companies can adapt their products and services.

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We already see cities growing “smarter” by installing sensors to automate the management of parking spaces. To enhance urban security, acoustic sensors coupled with audio and GPS analytics “listen” to pinpoint the location of gunfire. Within 30 seconds, dispatchers can determine the number of shooters, the shots fired, and even the type of weapon used.

Consider health care. Wearable devices allow us to monitor our steps, our sleep patterns, and our calorie intake to ensure we are following doctors’ orders and meeting our personal goals. Parents of newborns can try a diaper that has a humidity sensor that tweets when it’s time for a change.

To understand how revolutionary the third wave is, we ought to consider how far we have come. The first wave began when companies started to manage their operations via mainframe computer systems over 50 years ago. Then computing got “personal” in the 1980s and ‘90s with the introduction of the PC. For the most part, computing remained immobile and lacked contextual awareness.

In computing’s second wave, mobile computing and the smartphone took center stage. Billions of people, some who might not have had access to clean water, electricity, or even housing, were connected. Developers created apps and provided consumers with access to just about everything through their phone at the cost of a monthly data plan.

As the third wave gains momentum, designers must meet the demands of clients who want to experiment with new tech.

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Historically, designers have focused their attention on a product’s form and function. While that still matters, of course, the definition of a meaningful user experience has expanded significantly and will continue to do so. Instead of creating a single product, designers will need to imagine a suite of connected products and services that have awareness of each other and their surroundings.

Stake a claim now, we tell companies, in the space where digital and physical disappear, and products and services mimic and react to our natural behaviors.

Theodore Forbath is a vice president in charge of innovation strategy at frog design, a global product design and strategy firm.