The Explosion of Consumer Data Is Changing the Way Businesses Operate
Who wants to be fat shamed by their fridge? According to Feng Zhao, CTO of Haier, the world’s leading white goods manufacturer by sales, this is one outcome of the ever-expanding Internet of Things.
Speaking at the Fortune Global Tech Forum in Guangzhou, Feng highlighted Haier’s smart fridges as an example of how user data is changing the way companies operate. “This is not your grandmother’s generation of fridge,” Feng proclaims.
Haier’s internet-ready refrigerators recognize products stored in them, pings reminders to the owner’s phone when an item, like milk, is running low and even suggests healthier dietary options to the consumer. But besides impacting the end user’s experience, the ability to collect data is altering Haier’s business strategy too.
“We are undergoing a digital transformation, moving from a hardware manufacturer to providing hardware, software and services,” Feng says. “That is a profound transformation, to go to a model where we actually view our customers not just as a onetime consumer but maintain a lifetime relationship with them.”
In 2012 people generated 2.8 trillion GB of data worldwide, or enough to write 10 million Blu-Ray discs. By 2030, that figure is expected to multiply nearly forty times. The rapid expansion of the so-called Internet of Things, or IoT, is the spark behind this explosion of user data.
In 2010 there were 12.5 billion internet-connected devices in the world. By 2020 there will be 50 billion, incorporating any and all devices that can connect to the internet – such as smart home appliances, smart phones and in the not too distant future, smart cars. But of all the data generated by the 12.5 billion internet-connected devices in 2010, only 0.5% of it was processed.
Amir Khosrowshahi, who joined Intel to head up its AI division after the chipmaker acquired his deep learning start up Nervana in 2016, recognizes that this onslaught of data requires “a staggering amount of compute” to extract value from it.
To that end, Khosrowshahi contends the surge in data will kickstart a “virtuous cycle” whereby companies like Intel are forced to develop better algorithms to process the data, which in turn will allow for even more data to be generated.
“The amount of information coming in is such that we are finding its advantageous to build new types of chips to process new types of data,”Khosrowshahi says, hinting at Intel’s future chipset design.
“We’re living in the age of AI+ IoT, or what we call the ‘intelligent internet’ or even ubiquitous computing,” adds Alibaba alumnus Jerry Wang, CEO of the Hangzhou-based unicorn startup Tuya, which creates plugins that enable manufacturers to transform ordinary products, such as lightbulbs, into smart products.
How to secure that data is another concern. Intel is working on homomorphic encryption, wherein even the algorithms that process the data are encrypted, offering complete end to end security. But Feng Zhao thinks the need to give users control over their data will precipitate even greater changes in product design, which begs the question, what will our granddaughter’s fridge be like?