Talking Tech Trends: Connectivity and IoT
Welcome to a special edition of the Upstack podcast. Over the next few episodes, we're taking a deep dive into Upstack's 2024 technology trends report. For those unfamiliar, the Trends Report is our forecast for the digital infrastructure landscape over the next twelve months and beyond, informed by the insights and experience of our leading technology experts. To read the report, visit our website, upstack.com, or see the link in our show notes. We hope you enjoy the episodes.
Speaker 1:You know, we always talk about hiking on the podcast, Greg. Just just stick with me. This is a a real hike. We're gonna have a special series of episodes unpacking our 2024 trends report. We're almost near the peak.
Speaker 1:Almost there. And, Greg, this is actually we're not at the the we haven't summited yet, but this is our our third and final episode in this special series, unpacking the the trends report. So thank you for for staying with me. I know you stay well hydrated. I'm sure there's a bottle of water off to your left.
Speaker 1:There it is. There you go. There it is. That's how he gets that that golden glow. Now today, Greg, as you'll recall in a previous episode, we talked about our near and dear friend, data center, the foundation, the physical layer of the technology stack.
Speaker 1:And today, we're talking about another very familiar friend, very familiar friend, and that is network connectivity. How do you feel? Mean Very near I mean, you got the
Speaker 2:hand in hand.
Speaker 1:They do hand in glove. He has won the cool older brother or sister to the other. We can we can hash that out. We have the the perfect guest as always to help us do that. Let's welcome into the podcast, the one, the only, Jake Cummins.
Speaker 1:Jake, how are you?
Speaker 3:I'm doing great. Doing great. It's a rainy slash snowy day out here in Colorado. It's it's nice. I'll take it.
Speaker 3:I'll take it.
Speaker 1:It is April. I don't wanna date the episode, but it it's it's the spring, isn't it? Yeah. Still raining snow. So so be it.
Speaker 1:So be it. Jay Cummins, Upstack Partner of Engine Director, over twenty years of experience in telecommunications, delivery expertise for clients across network, data center, cloud, and voice. And we very much know firsthand that you are very much a leading strategic partner to some of the biggest brands in the world. So glad you could spare a few moments of your time to be with us before you get back to those those clients who are So so appreciative of your support. Welcome to the show.
Speaker 1:You know, we've got a a a list or we've got a a rabid group of listeners, Jake, who are actually might be surprised to hear connectivity made the trends report. Does that does that seem like an easy one? Well, I think rightfully so. It did make the trends report. We have a number of subjects around connectivity that we wanna that we wanna touch on, but it's probably don't know.
Speaker 1:Where where do we start, Greg? What do you think? Should what what is what is connectivity look like today, guys, to be honest? I don't want to assume anything. Is it is it evolving rapidly?
Speaker 1:You know? What are the big push or pulls in the industry? As always, I like to set the landscape before we dig deeper.
Speaker 3:It's still what drives everything. Mean, you could have the greatest application, the greatest servers and platform and everything on your cloud, but you have terrible connectivity, might as well have nothing. It's it's what drives every application you use today. It's allows it's what allows us to do this podcast and me, you know, come through and, you know, in HD video and, you know, you be in your home office and being able to do this, Alex. It's it's what drives everything.
Speaker 3:So I would say that, you know, it's still one of the most critical factors to everything that we do on a daily basis. And is it, is it evolving? Is it changing? Some ways, yeah. I mean, you know, consumers and enterprises and everything more alike is, is, is more in demand of, you know, high, high, high quality connectivity, high speed, low latency, things like that, you know.
Speaker 3:Not to go off topic, but you look at something like Starlink. I I mean, I could see where Starlink was personal personally, for me, it was a game changer. I have a place up in the mountains that I had a HughesNet satellite before, and, like, it was really tough to do much of anything. Starlink, I can have video phone calls. I could do this up there, you know, on my on my Starlink, you know, con connection.
Speaker 3:So it's, I'd say it's, you know, rapidly changing, evolving. New things are coming out, and it's it's an exciting time, know, for, you know, the the the boring topic of connectivity.
Speaker 2:Well well said, my friend. It is definitely the gas in the car, right, these days. Yeah. You know, I'm not gonna put it up there with electricity, but it's up there. You know?
Speaker 2:So I agree with everything Jake said. It's it's the demand is growing exponentially every day.
Speaker 1:And I'd imagine the pandemic probably helped accelerate that that growth as we went remote, and now there's work from anywhere or or hybrid work. Safe to say, you know, the distributed workforce is helping accelerate the adoption and maybe even the evolution of connectivity?
Speaker 3:Absolutely. I mean, you took it. And again, you know, not to keep touting some firsthand experience, but you look at a lot of the Colorado has a lot of small mountain towns, a lot of places that are very desirable for people to wanna be and live, but very traditionally were really tough to get, you know, solid connectivity. It made it very difficult for that remote worker. Now with, you know, a lot of the broadband grants that have gone out and things like Starlink and the expansion of networks, you can get fiber to your home in some pretty remote places, and you can plug in a Starlink and in fifteen minutes be up and running with thirty five milliseconds of latency and 150 megs of bandwidth.
Speaker 3:So that's driven that, and not only has it driven that remote worker in the push for connectivity, but it's driven the economies and changed the economies of many of these little places that used to be, you know, used to have a shoulder season. You look at places like Breckenridge, Colorado, Pagosa Springs, Colorado, remote places, that now there's no shoulder season. It's people are there all the time, and it's that was spurred by this, you know, the ability for people to realize, hey. I can actually do what I what I need to do anywhere anywhere I can get a solid connection.
Speaker 1:You the in the trends report, work from home, the top trend underneath connectivity. There's many mentions about the availability, which you just touched on. That has grown. The quality has improved tremendously. Was it Pagosa Springs that you're talking about?
Speaker 1:You can have HD quality video streaming in a tiny mountain town, but security came up as well, Jake. Security always comes up in conversation. I imagine that that needs to go hand in glove and you have a distributed workforce when your team is working from anywhere. What is the security overlay when it comes to connectivity in this this new era of remote work?
Speaker 3:You know, there there's there's lots of things. It's, not to go off topic, but it's it's funny when security comes up today, when you see AT and T breach the the data breach of 76,000,000 users critical information. That's, that's crazy. But, you know, you look at, a lot of the with distributed workforce, things that were spurred by the pandemic, you look at companies like Zscaler that are that layer on top of, you know, your PC or your cell phone that no longer do you need to have physical hardware to, protect a user's traffic. You can do it with an application.
Speaker 3:You look at things like Netskope, the application security brokerage product that allows you to really control, helps with shadow IT and putting some layers of control on what those remote workers and what those remote users are doing you know, as you have that much larger distributed workforce with incredible connectivity, and it opens up some vulnerabilities on that security front, but it also spurred a market for these tools that, you know, solve a lot of those problems, in very, you know, very efficient ways.
Speaker 1:So Jake and Greg, another trend that popped up in the report was around talk about software SD WAN. SD WAN. That that pop was the adoption, the migration, as well as the implementation of SD WAN. But, also, what we found is some companies appear to be slow to adopt the technology. I don't if whether they're on MPLS and they're they're they're happy enough with it.
Speaker 1:I'm just curious, Jake, what are you seeing around SD WAN in terms of the biggest upsides that a company can experience? Should they migrate away from something like MPLS?
Speaker 3:Well, I mean, you know, the biggest upsides are, you know, you you no longer are tied to, like, expensive local access and things like that if you're an enterprise client. So in the as a as an enterprise, you kinda have a little bit more control over your over your traffic and your applications and how you wanna use your network. You know, the ability to take a device and and plug in, you know, maybe a fiber connection, a coax connection, and then, like, an LTE or satellite connection to really build alternate redundancy is I think that's really cool, you know, and, you know, how SD WAN is kinda, you know, evolved into into the SASE play, you know, integrating the security at the edge. I think that that's really cool. But, you know, to your to your last point, I was on a call with a client this morning, a large global company that still uses MPLS, and they're just hesitant to move onto SD WAN.
Speaker 3:And I wouldn't say that SD WAN is, you know, it's been around for a little while, there's still an adoption rate. But, you know, that customer was hesitant because of the quality of service they got from from the MPLS connectivity, and they knew just knew that that was rock solid. But we've also seen extremely large enterprises succeed, with, with the SD WAN slash SASE play and and really, create lots of efficiencies and cost savings and simplify their networks almost by, you know, introducing that that technology.
Speaker 2:There there's a lot of if it ain't broke, don't fix it mentality right now. Just because the laundry list of things to do within an organization are just so big, and most of them are understaffed. So they really have to pick and choose. And if your network's working, you know, it's only when it comes down to crunch time, cost savings, better performance, high availability that they start to really look at these things. So, Jake, I have a question for you.
Speaker 2:Right? So I'm I'm sitting here, and more and more clients are looking for those 100 gig handoffs, right, data center side. And more and more, it's coming up empty handed. Right? And, Alex, just to kinda describe to the audience what this means is you get a hundred hundred gigs of throughput, whether you use it or not, right, is is it shows the growth in, the capacity demands in the market.
Speaker 2:And when it's not available and they have to go actually physically go in and upgrade the hardware within that data center to accommodate that, that shows that there's there's starting to be more demand than there is availability. What do you think about that, Jake? Are you seeing the same thing?
Speaker 3:I I yeah. You're you're spot on. I mean, you know, five, six years ago was like, you know, 10 gigs, the new one gig. Now it's like 100 gigs, the new 10 gig. It's like a lot of our customers are only ordering a 100 gig ports and they're ordering multiple in these data centers.
Speaker 3:So what we're seeing is exactly what you mentioned. There's not availability, there's capacity issues. We have one large client who has kind of moved out of the core carrier hotel data centers to kind of more economical, but really hardened facilities that we wouldn't put into the realm of connectivity like a 56 Marietta or the three fifty Cermak. So not only those data centers aren't 100 gig capable, but now they also have to get either dark fiber or 100 gig wave transport back to the core carrier hotel to meet those meet those capacity requirements. So and that even that's hard hard to to come by because the carriers simply just don't have don't have the cards, they don't have the physical hardware, and they really need to upgrade capacity.
Speaker 3:If you look at a carrier like Lumen right now, Lumen's got a pretty big project. We were just on a call with a customer looking at the Dallas market, and Lumen's upgraded their entire market down there, at least their core rings to 400 gig in an effort to be able to provide more capacity, more 100 gig capability to these different data centers, especially in these, I'd call them, I guess, you know, Yeah. Yeah. Secondary or Internet or Internet intensive markets where, you know, it's it's the the amount of usage is just going through the roof.
Speaker 1:So Sorry. Go ahead.
Speaker 2:Take it. Take it. I've also noticed, which is really interesting is, you know, you have these major, availability zones for all the big let's call it the big three. Right? Amazon, Google, Azure?
Speaker 3:Yeah. Yeah.
Speaker 2:And, you know, ten years ago, having five availability zones in The US was working. Right now with some of these latency sensitive applications and a lot of these kind of secondary and tertiary mark tertiary markets coming online, I'm not seeing the availability of these availability zones in these other markets, which are starting to become a requirement. How do you think that the they're gonna address this? Are they gonna stand up more POPs? Are they gonna go across the nation?
Speaker 3:You know, I don't know. You know, edge computing has been a buzzword for for a long time. Right? And kind of, you know, that could be lots of different things. It could be, hey, I've got a shipping container that I, you know, retrofitted into a major into a, like, mini data center.
Speaker 3:And I you know, you could access your applications from there at at a at a at a decent scale? Or is edge is what what could be this evolution of edge computing, is it really now going into these secondary and tertiary markets like you mentioned, and those become on ramp points for these large hyperscale providers. Know, Colorado Springs, Colorado, I consider that probably a tertiary market, you know, five, six hundred thousand you know, five or 600,000 people, you know, not not a not a huge city by any means, but, like, there's probably enough, you know, business and economy down there to drive low latency connectivity to your key applications that are being, you know, consumed on those platforms.
Speaker 2:Yeah.
Speaker 1:Is that, I just want to go back to the, make sure I understand this, the capacity constraints of the providers, the workarounds or the potential alternate solutions. Jake, you mentioned dark fiber, what was the other?
Speaker 3:Like how do wavelength services.
Speaker 1:Yeah, wavelength service. So yes, are the providers working on improving capacity? You gave the Lumen example, but it seems like connectivity isn't evolving fast enough. There's more capacity needed. Is it coming or do buyers of IT services need to start looking for alternative solutions because it's not coming fast enough?
Speaker 3:I mean, I think it's coming. I mean, you're, it's more of like a hardware limitation, right? You know, fiber optics, know, it's the speed of light, but there's not hardware out there that unfortunately can, you know, procure those those that type of bandwidth. Yeah. And I know that, you know, I think the most recent I mean, Greg, correct me if you saw something different, but I'm pretty sure they did like a was either I know it was I know they did an 800 gig or something test, but also I think there was a terabit, a terabit, you know, kind of A to Z test point using some newer age equipment.
Speaker 3:So I think it's evolving. It's just a little bit slower and even probably ten years, I don't know that anybody would have predicted the amount of growth that you're seeing with everything being in a digital digital manner. Yeah.
Speaker 2:So think sync chicken and egg, Alex. Right? So you have a situation where, you know, three years ago, they upgraded a data center. Let's take Zayo for instance, upgraded one of their one of the MeetMe rooms in a data center with 10 gig capacity. Now everybody's demanding 100 gig capacity three years later.
Speaker 2:So they just invested in 10 gig hardware. Now they have to invest in 100 gig hardware, and it's not cheap. And it's gonna be driven by demand. So how much do you buy and install? You don't wanna overbuy.
Speaker 2:And and, you know, these large providers are notorious for just dragging their feet on installation. Right? Even if something's lit service, you're looking at forty five, sometimes ninety days to be installed. Why? I don't know.
Speaker 2:Right? So now add a layer of needing to procure hardware, get somebody physically on-site to install that hardware, can take that ninety days to a hundred and eighty days. So you can imagine, you know, how you have to plan as an IT professional nowadays when you really need large capacity.
Speaker 1:Break out your crystal ball. The the constraints and connectivity are reminding me of of constraints that we spoke about recently around around data centers. So maybe we let's go there. Let's explore a little further. In the pre call, this concept of of the fabric or fabric came up.
Speaker 1:Greg, what what are we talking about when we
Speaker 2:when we when we say fabric? So, obviously, data centers are looking to evolve and get closer to connectivity they have for many, many years. So fabric allows a data center to essentially take all of its assets and tie them together, allowing companies to do unique things like Doctor easily, right, with replication between sites. It also allows for easy access to third parties like Amazon and other on ramps. It's a pretty good play.
Speaker 2:Jake, you know, the these these other data centers are using companies like Megaport and Packet Fabric to make up for their lack of their own fabric. Right? Yeah. How do you feel about that play, and and how are those companies doing?
Speaker 3:You know, obviously, everybody, I think, is trying to compete with Equinix here. I think they've got that story really well buttoned up in terms of what they've built out and the investments they've made in companies that they've acquired over the years and how they've used those assets and integrated them in with their, you know, data center ecosystems. I think, you know, what what you can do within an Equinix facility over a single cross connect is is pretty incredible. It solves a lot of challenges, especially, you know, with today, as today's, you know, opportunities for direct peering, direct connects to cloud providers, you know, bare metal services, things like that. So, I mean, I think they're definitely a leader in that particular space, but as you mentioned, there are alternatives, there's companies that are, know, Packet Fabric does a great job of quickly procuring A to Z connectivity in major data centers with a couple of mouse clicks.
Speaker 3:So you talk about like, you know, the mega carrier taking ninety to one hundred and eighty days to install a 10 gig service between two sites, you can literally do it with Packet Fabric in about forty eight hours, and you can do it by just a couple of point and clicks and getting your LOAs and you're off to the races. And they're also doing that as alternatives to connect to big hyperscale platforms. So I think there are some workarounds, and folks are, the other data centers are evolving to kinda meet that meet that need because, you know, it it does simplify a very complicated network environment to be able to to do some of these things, you know, on in a via a single pane of glass, I guess, is the best way to look at it.
Speaker 2:Easy. It's important. Right? It's critical. It should be
Speaker 3:It's critical. Like you said, it's the gas in the car. I mean, you could have a you got a thousand racks and then a data room somewhere, but if your connectivity sucks, you're not going anywhere.
Speaker 2:I've seen so many clients, do a poor job at planning and have their data center up months before the connectivity's ready. And it's just like, why are you paying, you know, excess money for your data center when it's not even usable. Yeah. I'm sure you've seen it too.
Speaker 3:Yeah. And I mean, not to not to get off on a tangent here, but, you know, the name Cloudinexion came from a conversation I had with a gentleman who was one of my first clients who was kind of really ahead of the curve on the cloud game. And him and I were talking and he's like, Yeah, we've built out these incredible live or real time and Doctor environments for these customers. Then we go to turn it up and they want to run it over like Comcast coax. And he's like, it's just so hard to explain that that doesn't work.
Speaker 3:And like, light bulb went off and I'm like, man, what this was like back in 2012, early days of this. And I'm like, Man, I think there's a market in helping people connect to the cloud it's going to be important. Here I have, you know, one of the top brains in the business telling me that these enterprise clients of his don't even think about it, and then it becomes a big problem and it makes their cloud look bad. And I'm like, wait, if I could explain that this is how you got to do this, maybe I could help some customers out and maybe I could create a little business for myself. And that's where the idea of the name Cloudnexion, Connection to the Cloud came from.
Speaker 2:That's incredible.
Speaker 1:We love origin stories here.
Speaker 3:That was the Cloudnexion origin story.
Speaker 1:We have one more topic we we have to touch on related to the the trends report. Business continuity. We talked about SD WAN a minute ago. I I'd imagine the the advent of SD WAN has had an impact on business continuity in some way, shape, or form. I mean, what is the current state of, I guess, redundancy or business continuity as it relates to connectivity today?
Speaker 3:I mean, you know, I like I think things like SD WAN have really, I mean, let's let's let's just be let's just face it. If you if you have a large retail location that's driven by credit card transactions and that ever goes down with today's technologies, like, just don't think you're being I don't still think you're being fiscally responsible because there's so many ways to keep that connectivity up and running, with today's technologies that you should never lose a dollar due to due to an outage. What do you I mean, do you you think that's a little bit too aggressive, Greg? Or I mean
Speaker 2:No. I think you're I think you're spot on. Well, but sometimes if they learn the hard way, right, and somebody loses a job, but they realize, you know, now we have to implement, you know, different technology to ensure that we have the proper redundancy. So I agree with you.
Speaker 3:Yeah. So I mean, you know, I think I think, you know, the the evolution of the of the network connectivity, Alex, is we talked about earlier, I think that that has been a been a been a boon for, like, Doctor and things like that. You know? It it it it makes it significantly, you know, easier now to put a a high availability strategy in place so you don't have the downtime issues that companies were previously plagued with. And especially those high dollar transactional businesses, I think that's where it was most important.
Speaker 3:It's pretty easy, something goes down at the office, the team goes home and connects to their laptop or plugs in a LTE card or tethers off their cell phone, that's there's really no stop there, but like where there's high dollars being exchanged, that it's driven by managing that connectivity, there's really no excuse these days to not to have that. There's really no excuse to go down really, think. I mean
Speaker 2:Alex, it's not a problem until it's a problem. Right? And I think that, you know, you have companies that have their heads down focused, working eighty hour weeks, again, limited staff. You know, they're they're they're implementing procedures and processes that they've been doing for twenty years. Again, not to fault.
Speaker 2:Right? They just don't have the time to look at innovation. And this is where, you know, I this is where I and Jake and I have been able to add a tremendous amount of value to our clients because we don't just see it across a single stack. We see it across all stacks and who's doing really good things and who's doing really poor things. And that's, you know, that's important.
Speaker 2:You know, you need those extra set of odds.
Speaker 1:Exactly. The significant benefit of working with an experienced trusted third party partner like a Jacob is like a Greg Moss, like an up stack. And that might be the perfect point to end on. Anything else we haven't covered though before we do officially end? Before we take a break on our hike, Jake, and Greg ever so briefly.
Speaker 2:I need the rest.
Speaker 3:Okay.
Speaker 2:No. I actually I wanna make a prediction, and I'd love Jake more than anyone in this world to weigh in on this prediction. Know? It's a it's fifty fifty. It it it involves connectivity, so this is why I feel it's appropriate to mention in this in this episode.
Speaker 2:So, you know, there's still a lot of there's a lot of attrition happening, in the big three. They don't see it, right, because they still have that top line revenue growth, right, with all the kinda late adopters. At some point, they're gonna have to go and compete with data centers. Right? So if you look at if you look at Equinix, who's doing a wonderful job at what we call Real Hybrid, they don't own the public cloud.
Speaker 2:Right? But they provide that easy access onto the public cloud. And then you look at the public cloud who's expensive. People don't realize it till they're there. Right?
Speaker 2:But when they do realize it, then start to pull out some of their some of their, you know, infrastructure back into data center and and part in private cloud or bare metal. So what are they gonna do when they stop having that top line revenue? Right? And they start to really, really realize that they're trading business. Are they gonna go and buy a data center?
Speaker 2:Is is Microsoft or Amazon or Google gonna buy Equinix? Because you can't control you can't control the connectivity market. You know, you can't just buy one provider and say, oh, I can lower my ingress and egress traffic costs. It's all peering. It's all public access.
Speaker 2:Right? It's hundreds of carriers, you know, thousands and if not millions of miles of fiber. So I I personally think that something like that could happen in the next two to five years.
Speaker 3:I mean, it could. I mean, look at I mean, it would be incredibly synergistic for a Microsoft to buy an Equinix. Right? I mean, they now they own the public cloud. Now they they you know, I always say Equinix owns the Internet, really, because, like, they sit on the Internet in every major spot.
Speaker 3:There's very few sites that that aren't Equinix data centers that are the largest, you know, peering points in the world, you know, with the exception of maybe like, you know, a Onewheelchair, you know, that's that's that's not an Equinix facility. Yeah, there's a few, but I mean, think about the synergy there. We now own, you know, this incredible revenue stream that's incredibly sticky, and it's really, I mean, it's really not going anywhere. So it's, that's an interesting thought for sure. I, I never, I never really, I hadn't put much thought into thinking of it that way, but when the way you mentioned it with, you know, seeing that, you know, there's just these trickles of revenues that are only gonna continue to turn from, you know, trickles to waterfalls as, you know, clients get smarter and, you know, things become easier to accomplish that, you know, how are they gonna how are they gonna sustain those revenue streams and the growth?
Speaker 3:And, I mean, gosh, something like that would be, would be an easy way to do that.
Speaker 2:Yeah.
Speaker 1:Yeah. Greg, that's why you're so tired on this hike up to Tech Trends Mountain because you packed your crystal ball. Next time, leave it That's good. It at home. Leave it at home.
Speaker 1:I'm tired of dragging you up this hill. Jake Cummins, thank you for joining us today. Absolutely. Appreciate your perspective, and we know connectivity and data center are just two of the many, many, many things that you're an expert in. But Thank you, your time.
Speaker 1:Greg, great to see you, my friend.
Speaker 2:Always a pleasure, baby.
Speaker 1:We're we're not done yet. Almost there. We've we've come this far. I think we need to keep going just a little a little farther. What do you think?
Speaker 2:I'm exhausted, Alex.
Speaker 1:No. Stop. Come on. We spent no. There well, as we what what have we established?
Speaker 1:The IT landscape is ever evolving. It's we are never done. We are never done. No matter where we may go, no matter what we do, IT is always evolving. Technology is always evolving.
Speaker 1:But we have come this far. We've been working our way through our 2024 tech trends report, touching on a number of of key areas for IT leaders, technology buyers to to focus on. And we've now arrived at a topic that is very near and dear to my heart, and maybe not, as as traditional as as some others. It's it's IoT time. What does IoT stand for, Greg?
Speaker 2:Internet of things.
Speaker 1:Yes. I this is where I confess to you that during the pandemic, I developed a a wicked IoT habit where I now have a full a full smart home, much to my wife's chagrin. But we're not gonna go there. That's not what this this special episode is about. Not at all.
Speaker 1:Instead, it's time to bring in one of our trusted colleagues to talk about the Internet of Things and its application to enterprise, enterprises and mid market businesses the world over. So we are joined today by the one, the only, mister Michael Rafferty. Mike Rafferty, welcome to the Upstack podcast. Mikey.
Speaker 4:Thank you, guys.
Speaker 1:We know. You've been you've been waiting patiently for months on end to make your your debut appearance in the Upstack podcast, and and here we are. Now it's it's my If
Speaker 4:I look blue in the face, it's because I've been holding my breath for so long. I I've been finally here.
Speaker 1:So thank breathe. This is a casual a casual conversation. A casual casual conversation. Mike Rafferty, to introduce you to the audience. You are an an information technology expert, over twenty years of experience in the industry, currently serving as a managing director with the Upstack team.
Speaker 1:What what did I miss in terms of background?
Speaker 4:No. I mean, twenty five years plus, in terms of
Speaker 1:I You can date yourself. Yeah. That's not what I'm here for.
Speaker 4:I know that's hard to believe for everyone watching, but, no. It's it's a it's a varied background. Excited to be here to talk about IoT because as you mentioned in your opening, Alex, it's it's not a traditional product and service that technology advisers like ourselves have been involved with traditionally over the years. I'm sure Greg can attest to that as well, but it was something that caught my interest, you know, probably five or six years ago, and it's been proven to be very exciting in pursuing opportunities around this technology.
Speaker 1:That's why you're the perfect guest because we know you've worked with clients of varying sizes, large enterprises down to the mid market on a variety of solutions. And in IoT, as you mentioned, has come up perhaps more recently over that twenty five year career. So let's let's start there. How were you introduced to IoT, you know, professionally? Yeah.
Speaker 1:How did that come about? Curious how you broke into to that that vertical.
Speaker 4:So as many of you know, ten years ago or so, fifth maybe twelve years ago, the whole thought of like smart cities and smart homes was was fascinating to me. You know, the ability to, you know, have your refrigerator notify you when the the milk is running low and you needed to, you get an alert and you've run off to the grocery store to fulfill those shortages. So that topic was of interest to me. And then of course, as mobility and wireless technology continued to develop, certain cellular and wireless companies started to announce that they had IoT platforms and really what it boiled down to was, having the ability to have SIM cards or multi carrier SIM cards even better yet put into devices that would enable companies to track assets. And typically it was in the logistics industry where one of these wireless devices could be put on a trailer or what have you, and it would report back to some center to notify what geographic location that was.
Speaker 4:And that was a great application. And we had plenty of suppliers in our industry that could offer that type of service. But that was only the transport mechanism of IoT. I wanted to And at this time I should interrupt myself and say that I started seeing terms like big data and how important data was to companies and how you harvest this data and make actionable. So it was almost like the confluence of these two things coming together.
Speaker 4:I had a friend in town who asked, he knew my background, he knew I was in the technology space and he happened to be a lean consultant for a very big defense contractor. So his whole role was finding areas within the operation that they can improve efficiency. So he asked me, Hey, can we grab a cup of coffee some morning? And we get together at the local Starbucks and he said, Listen, we are losing so many millions of dollars a year in raw materials at our factory. We can't find raw materials and then the manufacturing operations will order a whole new set of raw materials to replace the ones that we couldn't find.
Speaker 4:And it's costing us millions of dollars. Do you like know anyone that can do asset tracking? And a light bulb went off in my head and we had this very unique but not well known supplier that kind of fit that gap. And it started with a very basic use case. And it started with they were losing materials and then it migrated into all sorts of other applications internally.
Speaker 4:And the app the the business cases keep coming about and we keep solving for them.
Speaker 1:Wait. They were losing materials in their own factory?
Speaker 4:Yes. Or or materials would be damaged. They'd have to replay you know, because they were in an area of the factory that they shouldn't have been placed. But, yeah, believe it or not, the loss of raw materials this I know I don't know if we're gonna talk about ROI, but real quickly, in that specific case of raw materials being lost, the organization saw an ROI of $1,800,000 per year in recovering lost materials. Yeah.
Speaker 1:I need to invest in more air tags. Sorry, Greg. Go
Speaker 2:ahead. No. This is this has been I've been looking forward to this podcast because it's actually one of the areas I'm super light in. And one of the things I really wanna learn more about. So I'm excited, Mike.
Speaker 2:The one of the big questions I have is, what is the growth or evolution of this space look like over the last decade? Right? Curious.
Speaker 4:Yeah.
Speaker 2:Who's investing in it? Is is the the need growing?
Speaker 4:Yeah. I think it's a loaded question. I think the adoption is quite a bit slower than everyone expected. I mean, even as of today, I saw a recent stat being released that only 25% of manufacturing companies are able to gather useful data from their operating force. And I shouldn't just limit that to manufacturing companies.
Speaker 4:I think that's across all enterprises. And then of course those that do it well, still don't do it to completion. So there are a lot of like digital blind spots within their organization where they're just not capturing data on which they can conduct actions. And that's a problem because as you talk the word digital transformation or the phrase was very popular and that's been kind of replaced by and the confluence of AI coming into the scene. What does that mean?
Speaker 4:And I know we'll talk about AI because that's kind of one of the subjects of the technology trend report. It's coming, but businesses are trying to use AI in IoT, but they don't have nearly as complete a picture of the data that they want. So the AI is not really as successful as it can be until they can start getting those data points aggregated.
Speaker 1:But I'd imagine so that early on, IoT and AI early on in their relationship, it sounds like. Very early. Working on it. Okay.
Speaker 4:Yeah. I think if I look back, if only 25% of companies are effectively gathering data today, I would have expected it to have been a lot higher adoption level by by 2024. But that just provides more opportunity moving forward. Right? Right.
Speaker 1:And as we know, it can accelerate pretty rapidly too. Can I jump back for a sec, guys? Yeah. So you mentioned the I I think it was defense contractor, so, government would be the industry. What are some other industries where IoT has the most application today?
Speaker 1:And I ask because we have listeners who are they're IT leaders across any number of industries, frankly.
Speaker 4:Yeah. I think it's important to kinda talk about what IoT can really solve, right? So we talked about asset tracking. That was the area or the example I use with raw materials. Number two would be understanding the health of machines.
Speaker 4:Right? So we'll put asset tags, for example, or tracking tags on a machine to understand the health of it. If it's vibrating too frequently, that might mean that it's up it needs a service or maintenance window. So they'll shut that particular machine down. That's the second.
Speaker 4:And then, of course, basically understanding what the environmental might be in a particular area has value. Temperature, humidity, whether or not something is out of line in an XY coordinate. That's not really an environmental, but that would be something that would be of particular interest. So if you take those three high level categories of the types of data points that can be gathered from IoT asset tags, healthcare is a big industry, right? Operating rooms that aren't at the proper temperature or humidity and they need to be shut down.
Speaker 4:I mean, that can cost the hospital tens,
Speaker 2:if
Speaker 4:not thousands of hundreds of dollars, excuse me, tens or hundreds of thousands of dollars per day. The consumer CPG companies with their product lines in manufacturing, obviously, as I mentioned, the defense contractors, big industrial manufacturers that have machine manufacturing, aerospace, aeronautical, aviation, those are the types of industries that have expensive assets or expensive product that they're developing, have long periods of manufacturing or many multi step manufacturing processes. Those are industries that are really benefiting from IoT. I'll give a quick example. I mentioned this multi step manufacturing.
Speaker 4:I don't know why that came to mind right away. But we had a customer that was able to identify a flaw in the second step of a 35 step manufacturing process. So before understanding that the yield of the product was faulty at step 35, they were able to identify it at step two, correct the problem, go back to step one and get a complete yield out of that product.
Speaker 1:Through IoT? Through IoT. Identify the fault.
Speaker 4:Yes. Okay.
Speaker 2:You know, I find it interesting you mentioned health care. I mean, it seems like a no brainer. Right? You have the ability to, you know, do predictive, maintenance. Right?
Speaker 2:So you can know when things potentially could fail. And in some sort of health care or medical environment, that seems
Speaker 4:like it could be pretty incredible. Exactly right. The factors, Greg, of these asset tags continue to get smaller. Right? I mean, when I started with this project, this first project six years ago, I mean, they were the size of a half dollar and maybe a half an inch thick.
Speaker 4:And now they're literally being printed on stamps where the circuit board is embedded in the stamp and it's a completely flat surface. Typically they have batteries in them but now they're being released with battery less circuit boards that happen to be powered by, you know, these devices that circulate through the factory and send up Static power surge. Yeah. It's incredible.
Speaker 1:That that's how I keep track of Greg when it's time to record a a podcast. That's why I told you I was a fan of the smart woman in iX.
Speaker 4:Wearables is a big is a big thing too.
Speaker 1:Right? It is. Very much so. And but so they're in the consumer space, feels like adoption is ahead of in the the enterprise or professional space. But and you mentioned a few moments ago, Michael, that it's still early ish days.
Speaker 1:But I'd imagine adoption has started to accelerate at least a little bit because you think about edge computing, for example, and and the rapid increase and and reutilization of edge computing. Have you seen edge as edge has come online, IoT started to pick up a little bit, maybe as a trailing trailing indicator?
Speaker 4:So it's it's fascinating you bring up edge computing because, the area where I'm seeing it in the IoT world is it's providing an an additional layer of security for the customers that are deploying IoT, right? Instead of aggregating all of your data sets in a public cloud somewhere, the ability to have some of those data sets stored locally via edge computing, or at least more local than a public cloud, provides an additional layer of security that's been really helpful. It's also quicker to it cuts down on the time loop in having data collected, stored, actually visualize putting the data into a visualization tool and then reporting back so that the business units can actually work off of those reports or those graphs or what have you. So we're seeing I I I would say I'm seeing the benefits of edge computing. Whether or not it's promoting more IoT deployments, I haven't seen it get to that yet.
Speaker 2:I would think five g is playing a massive role in the ability to to to roll out applications that are more robust and meaningful. Right?
Speaker 4:Yes. For sure. For sure. You know, four g LTE, no one was really talking about. But once five g is the proliferation of five g has certainly gotten more discussions around the ability to reach different areas within a particular, building or particular geography for that particular client.
Speaker 4:So absolutely.
Speaker 2:So I IoT, it seems like there's, you know, there's the internal savings to an organization. Right? It's through some sort of asset management type of application, and then you have the consumer benefit. Right? So if you're tying this to a refrigerator or a toaster.
Speaker 2:But, you know, I guess it's hard to demonstrate that return when it comes to consumer electronics. So you're not gonna put it on the toaster. Right? Because what is that data gonna be worth, and where's the value? How much of the divide is consumer bay is b two b versus b two c?
Speaker 4:Well, you know, you can say the same thing about b two b too. Right? If if you're a manufacturing company and you're manufacturing widgets that cost, you know, 17¢ a piece, you're not going to invest in a highly functional IoT platform to recover costs right there. Right? So similar example, like I mentioned the refrigerator.
Speaker 2:Unless it's shelling off data. If it's shelling off important data and you can make money on that data.
Speaker 4:Yes. Yeah. No, no, no. Right. But in terms of asset tracking or environmental impacting the manufacturing in those widgets, it's probably not a useful case.
Speaker 4:But similar to your example on the consumer side, you know, you're not gonna track the environmentals around a toaster. However, something around your refrigerator or your electric vehicle, for example. I mean, those are costly assets that you would like to have more insight into.
Speaker 2:Sure. Makes sense.
Speaker 1:Edge computing and security. I'm surprised to hear you say that. You know, I'm always jumping back, guys. Just just bear with me here. Because when you think of IoT, additional endpoints potentially to your network, although I think the example you gave with edge, Michael, is gonna the ability to separate those things and then containerize them if you if you will.
Speaker 1:I mean, security risks I imagine security is a natural part of the conversation when engaging with a client when it comes to IoT. What is that conversation like? Are there particular solutions you're looking to couple or bundle with IoT?
Speaker 4:So the security, it first starts with network segmentation, right? So when you're dealing with a company's IoT platform, you're dealing with different business units within the organization. Of course, the security and compliance departments are going to be heavily involved. And the first thing they want to know is, of all the IP addresses in our enterprise, do we have them segmented between Alex's desktop versus Greg's lathe back in the operation, in the manufacturing floor? So we need to make sure that we differentiate those types of IP assets.
Speaker 4:And then depending on the type of organization, whether there needs to be FedRAMP compliance or FISMA compliance. Different IoT platforms have different methods in which they can secure the data. For example, one of our DoD clients, they wanted to be in the AWS GovCloud. So we set up a data lake in the AWS GovCloud, but then they have secure areas within their manufacturing facilities that they don't allow up until now any data points to be drafted out of that secure area because they couldn't run the risk of someone, whether it be a foreign entity that was actually getting access to the data coming out of that secure area. But AWS and Microsoft are developing these, they're called, I'm sorry, special security government clouds.
Speaker 4:So they're act I'm sorry. Secret government clouds is what they're called. So they're actually providing another level of security above and beyond the GovClouds that these public cloud hyperscalers are developing. So, I'm not a security expert at that level, but they have these compliance departments that are checking all the boxes. When you're dealing with organizations in aerospace, aviation, defense contractors, DOD, the months and years we had to go through for security, you know, checkpoints was was pretty advanced.
Speaker 4:But but important. It's it's it should be no
Speaker 1:surprise, frankly. You know, security is a part of of every single layer of the technology stack. And why should IoT be any different?
Speaker 4:That's correct. Yeah. Especially in these industries, right, where you're dealing with, in some cases, national secrets, for example. Right? I mean, very valuable information is being assembled in these organizations and they need to make sure that they protect it at all costs.
Speaker 4:Don't think you'd I don't think you'd pass the sniff test, Alex, if you showed up.
Speaker 1:I'm actually sweating right now. I'm nervous that we're gonna like, so and the NSA is now a listener of of the Upstack podcast. Oh, goodness. I like that one. At the door.
Speaker 2:Consumer. Like, IoT, I see a lot I mean, I personally see a lot of the applications on the consumer side. So when you talk security, Alex, I think you bring up some really good points. Yep. We were living in a world of concern around privacy, right, and around security, especially on that consumer side.
Speaker 2:So I'd be curious to see I mean, I'd almost feel like things in my house are watching me. Right? To someone who's listening to me. Everyone's always at Alexa syndrome. Right?
Speaker 2:It's what is Alexa doing? Is she listening to me beyond just my typical requests? This this opens up, I feel, like a can of worms. I mean, do have you heard anything in inside the industry about concerns around privacy and security as it relates to the consumer side of IoT?
Speaker 4:None on the consumer side. The only thing I can think of, you know, you you brought up, where our world is today. I can say that during COVID and with the delays in what happened to our logistic and supply lines during COVID and how that disrupted so many things in our economy. Even the current geopolitical landscape is causing concern with respect to supply chain and logistics. And when you have insights into the journey along the logistical time line of certain products or raw materials, this is another example of where an IoT application or an IoT project around that logistical journey can be helpful, especially in this geopolitical landscape.
Speaker 1:IoT making supply chain more resilient?
Speaker 4:I don't know if it's more resilient or, you know, it's it's able to understand the supply chain
Speaker 1:Got it.
Speaker 4:Through me a little better.
Speaker 1:Deliver data that can be
Speaker 2:agree with that. I think it's it's taking it's taking the flaws out of it. It's compressing it. You know, I I see that in CPG in particular. I know you mentioned that early in earlier in the podcast, whether it's b two b applications and tracking products from supply chain or actually tracking buyer behavior, right, at a store level.
Speaker 4:Yeah. And and, you know, I don't have I know that the financial industry has been rolling out some IoT, particularly around getting human feedback from their employees and the institutional branches on how consumers are interacting with their product at the branch level. To be honest with you, I deal with the IoT more in the B2B space and the B2C or the C2B. But I know it wasn't for everyday use. I mean, it's fascinating what this could result in the next five, ten years.
Speaker 1:We we should get back together and say twelve months and see how long or far things have have traveled because I imagine it's gonna be pretty pretty far compared to where we are today. Michael, we we we are obligated to give our listeners these actionable nuggets of information to take with them on their on their journey. We've already established one nugget of information when it comes to IoT. Segment your network. That's correct.
Speaker 1:Segment your network. These are endpoints. It could be a really, really valuable technology, but no need to create additional risk. Another nugget could be how to get started. Again, I'm I'm an IT leader in an enterprise level organization.
Speaker 1:Can you start small or is this a huge undertaking? What is the entry point here? What could that look like?
Speaker 4:It's a great question. So the first thing is coming up with a use case, right? Hey, we this problem we're trying to solve. Can it be solved with an introduction of some technology? We validate a use case.
Speaker 4:We do this all the time and we don't try to boil the ocean, right? We're starting out with a very particular use case that needs to be solved. And the suppliers that we use have starter kits where for a very nominal investment in the infrastructure that's needed, a couple of gateways, some asset tags, you can get actionable data within a matter of a couple of hours to prove out that use case. Start collecting data, understand what the data were those data points you were looking to collect and what kind of action can you take on it before you invest in a long term rollout that will take these rollouts don't happen overnight when they're across, you know, an industrial organization, but the benefits are incredible.
Speaker 1:So good to know you can I like these these starter kits also probably helps to have a a Michael Rafferty by your side? You know? Trusted trust your partner who's traveled that path before and can can guide you on on the way.
Speaker 4:I have I have great walking shoes. I've walked along a lot
Speaker 2:of
Speaker 4:manufacturing warehouse floors. I'm happy to help.
Speaker 1:This is You must have a hard hat.
Speaker 4:Oh, I have hard hat. I have goggles.
Speaker 2:OSHA. He's gone to his OSHA class today.
Speaker 1:He's OSHA.
Speaker 4:Reflective vest. I mean, listen. It looks Woah.
Speaker 1:Top line. If we know that, we would have asked you to wear it for today's episode for the the video component. But that when we record. Now while while Michael's sartorial choices will not be featured, we do encourage our listeners head to upstack.com/24 trends, that's two four trends, to read the full trends report and learn a bit more about IoT and the other trends that we've highlighted in the report. Michael, thank you for joining us today on the Upstack podcast.
Speaker 1:We appreciate it.
Speaker 4:Gentlemen, two legends. I appreciate your time. Thank you so much.
Speaker 2:Thank
Speaker 1:you. Next time. This is the Upstack podcast. Thanks, everybody. Thank you for listening to the Upstack podcast.
Speaker 1:Don't forget to like or subscribe to the show wherever you get your podcasts. We'll see you next time.
