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Good Marketing Generates Growth

This is part 2 of the SEBN (South East Business Networks) business breakfast held just before Christmas 2016. Here we have John Berenyi of Bergent Research sharing with us on how big a game changer good marketing can be. John is a registered psychologist with degrees in commerce and technology. He presented a series of ideas on good marketing and the profit improvements than can be achieved by using good marketing principles. This is an excerpt.

John Berenyi

John Berenyi

A bit of research shows this is a common presentation topic for John and one that has been requested Internationally so it is worth paying attention to what he says.

Game Changing Growth

Good Marketing delivers:

  • increased profits
  • reduced sales time
  • reduced costs

And how does this happen? By giving your buyers what they really want! Seems simple yet my experience is that this is not as simple as it sounds.

Because in our highly marketing driven environment there are fewer dollars left on the table, giving customers what they really want leads to them buying. And it also leads to a Value Monopoly.

Value Monopoly

Value Monopoly

Value Monopoly

Value Monopoly comes from:

  • Tight brand – build margin because you can sell at a premium Eg. Apple, Harvey Davidson, lego
  • Right communication – if you don’t do this you are wasting money
  • Emotional brand benefit
  • Rational brand benefit
  • Price kick
  • Real value

A good example is Harley-Davidson. They sell a Motor Bike. Or do they? Here is a quote from their head of marketing: “What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid of him.

So the comment about selling what people really want comes in here. They don’t want just a motor bike. They want a motor bike with attitude. They want benefits beyond, speed, fuel consumption and reliability. In this case, image.

And there is a formula for this.

Value Monopoly = (pQ x Eb) / (P + rT)

Value Monopoly in Detail

Value Monopoly in Detail

Where:

  • pQ = perceived quality
  • Eb = ego boost
  • P = price
  • rT = relative time to acquire

So price is important but it is a long way from being the whole game. However if you are more expensive and can’t justify it, then you have a big issue. From the above you can see that reducing price only helps if they can get it quickly or either the perceived quality or ego boost go up. When did reducing price ever increase the ego boost or perceived quality?

So this is an interesting formula. You can increase your value monopoly mostly by increasing the perceived quality, increasing the ego boost associated with the product (for the buyer type), making it quicker to get, or making the price lower. Amazon have gone with the quick to get and lower price strategy. Most of the products aren’t theirs so they are stuck with the ego boost of the market, and the same goes for the perceived quality. So they have primarily tackled the terms on the bottom line. An exception is a product like the Kindle where they also went for perceived quality. So 3 of the 4 terms.

Back to price. On price you have these 5 buyer types:

  • Budget buyer
  • Negotiator
  • Specials junkie
  • Bang for buck with every feature
  • Dream buyer (their dream, not yours)

We are all like this but which type of buyer we are depends on the product category. Studies show that budget buyers are only 10% of the market. This also applies to your customers. So again, just selling on price is a mistake unless it is that 10% you are specifically going after.

But how do you find out what type of buyer each prospect is?

Here is where the problem comes from when you try to find out what type of buyer you are dealing with:

  • They don’t know
  • They can’t tell you because they don’t have the language / concept
  • They won’t tell you because they are either embarrassed or have some other reason

Ultimately, if you understand what your customers really want and can communicate what you offer so they get it, then you will sell a lot more of the same product. But you will also need to look at understanding what they really want, and not just what they say they want.

Here is a list of recurring reasons for buying a house:

  • Make my sister really jealous
  • Prove to mum and dad that I’m responsible
  • Prove how successful we’ve become
  • Let me be popular for once
  • Make my family love me
  • Show my life’s work is worth something
  • I want to feel in control
  • Keep my marriage together
  • Prove emigration was good idea

As a real estate agent, it would be helpful understand the current buyer so you can offer them something they want. But they are unlikely to be open about it up front. And to everyone wants to be sold to the same way. We all have a disposition in how we are sold to. Not everyone wants their agent to be their best friend. Not everyone wants efficiency. Here is an example of some ways people think about the salesperson they want to deal with.

Buying Disposition

Buying Disposition

All of the above fits my concepts of good marketing. So lots of stuff to think about there. I hope you found this helpful as you are considering how best to navigate 2017.

My thanks go to John Berenyi for making his slide deck available from the morning. Most of the graphics came from that.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2017 Successful Endeavours Pty Ltd.

Industry 4.0 and Bosch Australia

This is the first of a 2 part past covering the SEBN (South East Business Networks) business breakfast just before Christmas 2016. The first speaker was Gavin Smith of Bosch Australia. His talk was title “Life After Auto” and here is my summary.

Gavin Smith - Bosch Australia

Gavin Smith – Bosch Australia

In the 1960s you could make anything in Australia because the import tariffs were high and we were a long way away from the rest of the world. But by 2008 all that had changed. Although Robert Bosch is the largest tier 1 automotive supplier in the world, and the largest automotive company that doesn’t assemble vehicles, the original Bosch Australia factory is no longer there and a new one built and they are about to expand again.

So there is a lot of change. He also quoted Jack Welsh of GE fame: “If the rate of change on the outside exceeds the rate of change on the inside, the end is near”!

High volume no longer has to be a lot of the same thing. They are now doing high mix electronics manufacture and are about expand that as they have run out of capacity. This follows the Industry 4.0 model rather than traditional manufacturing.  The design team is also expanding s they are now do bespoke product design with the intention of making them locally.

Bosch are also keeping track of the following Megatrends:

  • Demography
  • Urbanisation
  • Energy and climate
  • Connectivity
Bosch - Megatrends

Bosch – Megatrends

And all of this relies heavily on IoT (Internet of Things) devices and Big Data. To be a global supply chain player or to have a modern product you will have to have connectivity and visibility of every part of your process and your supply chain as well. And for Industry 4.0 you will especially need it for inside the factory. This is already happening.

Robert Bosch are also looking at incubation for new ideas internally and also externally. This is a great idea and something we are also doing with both clients and prospects.

They are also looking to attract more women into STEM (Science, Technology, Engineering and Maths). Something I am also keen to see happen.

Industry 4.0 example

Gavin finished with a video that showed just how streamlined the Design to Manufacture path could become. Something essential to the realisation of a true Industry 4.0 mass customisation.

While it is worth remembering that some of the above is a view of how the Industry 4.0 future could be, rather than what today looks like, Europe have been pursuing this trend for 15 years. So we have quite a bit of conceptual catching up to do as well as implementation capability. And we need to start early which is why the Casey Tech School project and Schools of the Future are so important.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2017 Successful Endeavours Pty Ltd.

 

IoT Interoperability

There are several big issues with IoT. The primary 2 are Security and Interoperability. We have tackled IoT Security and so this post looks at how different devices and systems can work together. This is Interoperability.

The first thing to understand, is that middle ware providers like IBM do not want you to be able to exchange data independently of them. They want you captive to their ecosystem. They make money from you having to pay them for continued access to your own data. This inherently works against one aspect of interoperability.

IEEE has put together a useful introduction which you can access at Interoperability in the Internet of Things. This includes a useful audio explanation and detailed articles on each area plus sample projects.

IoT Interoperability

IoT InteroperabilityIoT

The IoT vision is for a highly connected and interoperable system but most systems do not interoperate well. And standards development is still ongoing which means there is no agreement in sight.

To explore further, there are some excellent resources at:

As usual, Europe seems to be doing more to foster unity and collaboration and has many excellent projects to help this. The Unify IoT project has published results which are freely available. They conclude that there are 300 IoT frameworks in use and 20 of them are quite popular. But no standards are expected anytime soon and the lack of standardisation is a big impediment to getting the full benefit from the technology.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2017 Successful Endeavours Pty Ltd.

Australian Manufacturing PMI

The Australian Manufacturing PMI is a measure of the manufacturing economy in Australia. A score above 50 means it is growing and a score below 50 means it is shrinking. I recently reported in the post about out new location that we had been in growth for the past 17 months but according to one data source we missed out for a couple of months during that time. For the history see:

So I thought I would double check the data. I went to the Trading Economies Australian Manufacturing PMI and looked at the trend since 2012. Here is what I saw.

Australia Manufacturing PMI 2016

Australia Manufacturing PMI 2016

So my understanding of this graph is that after the Global Financial Crisis we saw Australian Manufacturing decline but since 2012 the decline has slowed and this past year it has grown.

As a result, I continue to be encourage that Australian Manufacturing is Growing and we will continue to support that by developing modern electronics based products that are Made in Australia.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

Brain Scanning

The ability to scan details of the brain is a common theme of both science fiction and also modern medicine’s wish list. So just how likely is it that we will be able to do that anytime soon?

Check out this image captured by a project focused on capturing the Wiring Diagram of the Brain.

MRI Brain Activity Scan

MRI Brain Activity Scan

Well in June 2016 researchers showed that they could uniquely identify a person with 99% confidence based purely on their brain scan. This uses newly developed magnetic resonance imaging equipment that has come out of the Human Connectome Project and can also show the following:

  • how you will perform on an IQ test
  • how you will perform on a memory task
  • how you will perform on a reading task

That seems pretty specific.

What we have learnt is that while we are all unique, there are some common elements we can use to define capabilities. We are still a long way from Gattaca and I am OK with that.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

Outdoor Positioning Systems

We have all become very used to the idea that a phone or car can know where it is using GPS or one of the equivalent satellite based positioning systems. And it gets better all the time. Modern chips can get you down to centimeters under ideal conditions.

But have also all had the experience when we go indoors and the position information disappears.

So is there a solution for that?

Indoor Positioning Systems

It turns out there is. Or at least, there a quite a few. They all have their drawbacks and most require you to add technology to the indoor area to get it working. Lets do a quick survey to see what Indoor Positioning Systems are out there.

GPS Repeaters

GPS Repeater

GPS Repeater

The first one is using GPS indoors. If you have a high enough roof you can put a GPS repeater on it and project the satellite reception into the building and suddenly GPS works inside the building. We use exactly this technique when needing to test a GPS device inside our building. See GPS Repeaters for one example product.

Radio Beacons

This covers a very wide range of technologies, of which Bluetooth Beacons are the current industry trend. And they can work either way. You can wear the beacon and the receiver track you and use your RSSI to calculate your position, or you have the receiver and monitor the beacons to achieve the same result.

Bluetooth Smart Beacon

Bluetooth Beacon

Increasingly these systems are being used for applications like tracking patients in hospitals and residents in retirement villages.

WPS WiFi Positioning System

You have a WiFi network, so you can use the network as a WiFi Positioning System or WPS. This is similar to the Radio Beacon system and uses the RSSI from your device to the WiFi Access Points.

Dead Reckoning

This uses Inertial Navigation components to keep track of your distance and direction from a known point. It is usually used in conjunction with another system such as GPS outdoors and Dead Reckoning in tunnels to keep an accurate estimate of a vehicles position on a map. And low cost MEMs based devices are now available to provide Inertial Navigation readings.

MEMS Accelerometer

MEMS Accelerometer

The weakness is the double integration of the signals leads to noise accumulation and the accuracy of the position estimate decreases over time.

IR Techniques

These vary a lot. From a sea of emitters overhead to give a location grid to emitters firing down row and aisles in warehouses and even corner emitters firing angle encoded signals picked up and decoded using sine rule mathematics.

IR Angle Emitter

IR Angle Emitter

The image above is a system we design in 2006 to do angle based IR location detection in GPS blind spots for container handling equipment. This was capable of locating equipment to within 0.5m.

Time of Flight

This allows you to more accurately work out the distance from the emitter to the receiver but requires very precise timing in both.

Magnet Field Monitoring

This is an obvious one, but most modern smart phones have a compass in them. The usually aren’t a very good compassand that can make this option not viable. However if you do have a good enough compass, you can use local disortions on the magnetic field due to steel structures in a building to estimate your location.

Indoor Position Conclusion

And of course, you can use a combination of the above to meet the specific requirement you have. As usual, the classic trade offs apply. These are:

  • accuracy
  • cost
  • size
  • battery life

For some addition insights check out 10 things you need to know about Indoor Positioning.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

Design Led Innovation

Traditional Product Development comes up with the product idea, does the development, gets it into production and then tries to find customers to sell it to.

Design Led Innovation tries to turn that process around so the actual needs of the customer or user become part of both the product definition and the business model development. If you haven’t already heard of it, check out the Business Model Canvas.

I get the opportunity to present on topics like Innovation to Business Groups and even MBA programs and one of the interesting statistics I use is that the number one area for Innovation in the world today is the Business Model.

How Does Design Led Innovation Work?

So how does this all work?

Design Led Innovation

Design Led Innovation Process

In Design Led Innovation, the expected outcome is that when you engage with your customer, and begin to understand their needs, then you can start to offer them something that has much higher value for them and allows you to get a better price for offering that much higher value. The outcome is the classic win:win that great business is meant to deliver. And it is a key factor in not getting caught in the classic commodity service price war with the client’s purchasing officer driving the process.

It is also a continuous process. One description is that it is like “rebuilding the plane while it is in flight”.

Sounds scary, but the results seem to show it is well worth doing.

Design Led Innovation session at SEBN

At a recent SEBN breakfast session we heard from Tricomposite about their  experience of using Design Led Innovation to revolutionise their business and not only service their existing customers better, but offer them products they didn’t even know they wanted and create a much better value offering for them than they had ever considered before. And this has opened up potential market offerings to other customers who they would never have considered they could work with.

Here are the themes they explored in finding this offering:

  • focus on designers, not buyers
  • test is time pressure leads to design mistakes
  • test is rapid full-sized final material prototypes were valuable
  • test if there was room for service level agreements
  • test if there was room for collaborative design

And the answer to 4 of these was a resounding yes. Only the service level agreement test failed. Basically, customers expect service as a given. But the rest has opened up a complete rethink of their business. In fact, they shared that it was their existing perspective on their business that proved to be their biggest limiting factor.

Business Model Canvas

Rethinking the Business Model is a key component of Design Led Innovation. But not as an end in itself. Only after understanding your customer’s real needs can you determine how to make it easier to do business with them.

I recommend getting the Business Model Canvas book and taking advantage of the free downloads at Strategyzer. Here is a example of one of their tools.

Business Model Canvas Example

Business Model Canvas Example

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

We Moved

That’s right. After 7 great years of growth and making a difference to the local manufacturing economy, we ran out of room. So it’s good bye to lovely Berwick Village and hello to Narre Warren.

Our new address is:

Suite 4, Level 1, 58 Victor Crescent, Narre Warren VIC 3805.

And we have a new phone number: 03 9796 0365

Successful Endeavours - 58 Victor Crescent

Successful Endeavours – 58 Victor Crescent

Above is a shot of the front of the building. Parking is in the rear and below you can see the 7 spots available for staff and visitors. Signage will happen in the next week or so.

Successful Endeavours - Parking

Successful Endeavours – Parking

Once you get inside the building (doors at front and rear) you take the lift to the first floor and then head along the corridor to your right and round the bend to the left. There will be signage on the front glass doors.

And here are some inside shots.

Just before the fit out was complete.

Successful Endeavours - Inside - Fit Out Nearly Complete

Successful Endeavours – Inside – Fit Out Nearly Complete

First load of furniture arrives on Saturday.

Successful Endeavours - Inside - First Furniture Delivery

Successful Endeavours – Inside – First Furniture Delivery

After the final load of furniture arrives and is assembled.

Successful Endeavours - Inside - Furniture Delivered

Successful Endeavours – Inside – Furniture Delivered

Monday morning we move the furniture into place and start setting up.

successful Endeavours - Inside - Up And Running

successful Endeavours – Inside – Up And Running

And by Monday lunch time and we are operational again.

Australian Manufacturing Continues To Grow

I’m really looking forward to being able to build the team and do more product development for manufacturers in Australia. Australian manufacturing has grown every month for the past 17 months so this isn’t just us, there are lots of other businesses growing; something I am particularly pleased to be able to report. It continues the trend I wrote about in July 2016 in Australian Manufacturing is Growing.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

Digital Tomorrow is Today

The most recent Casey Cardinia Business Group breakfast heard from Chris Riddell, futurist. This is a summary of what he said.

Chris Riddell - Futurist

Chris Riddell – Futurist

The future is already here. The digital revolution has happened. So what about tomorrow?

This is the question Chris posed to the room at the start of his presentation.

Chris asserts that the technological revolution has already happened. Now it is Velocity that counts. So what does Velocity mean?
In Software Development, Velocity refers to the rate with which you are completing a project. If Velocity is too low, you will not finish on time. Ideally Velocity is above the original planned value and you will deliver ahead of schedule. At the very least, this allows you time to test comprehensively. Projects running late often compromise on test in order to save time. This tactic usually adds time in the long run.

His first example was OTTO. This is a start-up of ex Google employees who are developing self-driving track technology that can be retrofitted to existing trucks. So you don’t need to design a new vehicle, you can add their system to your existing fleet. They have early adopted product in the market (delivering beer via self-driving trucks) and hope to be fully market ready in 9 months. And uber bought OTTO. This rapid time to market is an example of the increasing Velocity available today.

OTTO self-driving truck

OTTO self-driving truck

A local example we are working with is Maintabase. This is a Melbourne based start-up that came to us 2 months ago with some “off the shelf” hardware to try and configure it as a demonstration of their asset management concept where you can monitor machine cycle and operating time automatically and identify when maintenance points will be reached. Like OTTO, this can be retrofitted to any existing machine. They were trying to use “off the shelf hardware” for good reason; low development cost. However the hardware was difficult to configure and use, not very flexible, and ultimately not what they wanted in a final product. It was never going to do what they needed and was only ever an interim measure. So we created the product they need and they are launching it at Future Assembly in the IoT Category. See Future Assembly – IoT – Maintabase for more details. So idea to launch in 8 weeks!

Maintabase

Maintabase

And then there is Tesla who have reinvented the modern passenger automobile and already offer autonomous cars.

Tesla

Tesla

And now a medical example. 23 and Me will send you a DNA kit. You provide a saliva sample in the test tube they provide. They then send you a detailed report describing your genetic ancestry, what health issues you will expect have in the future and even what kind of children you will have with your partner (you need 2 samples for that). This was banned in the USA due to concerns about how to regulate it so they moved to Europe and launched there. Now they are also able to operate in the USA. 5 years ago a service like this would have been prohibitively expensive. Now it is a very affordable tool to allow you to manage your life better.

23 and Me - Welcome to You

23 and Me – Welcome to You

We also see the huge burst of activity in Wearables that allow you to quantify things like quality of sleep, activity level and a whole range of health and other indicators. The Quantified Self requires measurement and these devices do a good deal of that already.

Lean Digital Start-Up

Computing technology is also changing so rapidly that you can do a hugely scalable start-up in a shed. This is technology going full circle. HP started in a shed. So did Google and Apple. The shed may become the new business launch model.

This allows a new class of business opportunities lumped under the banner of the Lean Start-Up. I’ve added “Digital” to the mix because there is a lot of emphasis now on being able to scale quickly. So we have the Lean Digital Start-Up. So low investment, low risk, potentially huge upside, potentially scalable. The failure rate of Lean Digital Start-Ups is unfortunately also huge. About 25 times the failure rate of conventional businesses. The risk due to failure is much lower and they can pivot rapidly. This is Agile applied to the Business Model.

Old world businesses are like huge plantations and have a specific focus and everything is about optimising that focal point. By comparison, the new business paradigm is like hacking your way through a rain forest looking for a breakthrough plant or animal that holds the cure to something incurable. The latter is a much more chaotic process and results are unpredictable.
Access to technology means that even mobile phone calls and SMS are old hat and is all about video, high speed data sharing and experience.

The Future – What Next?

BMW have just celebrated 100 years in business. That is a great achievement. If you go back 50 years, it was all about the product, the technology, the reliability. Today it is all about the experience. And they are talking about selling transportation services rather than vehicles in 10 years time.

Super Fluidity is now the norm. You can transfer data almost instantly to anywhere in the world. Today you can design a product , send the file somewhere else on the planet and have it 3D printed . You can now 3D print food. Oreos can be custom designed by you and then made for you and shipped to your address.

Why is Google self driving cars happening? Google do search and other data stuff. The answer from Google is that a driver-less car is a mechanical problem that needs an information solution. And Google are an information solution company.

Why is Lego still in business? It is a plastic block. Easy to copy and many have done it. Yet today they are the most influential toy company in the world. Everything is about the user. You can design your own kit, select the blocks, buy it and have it delivered to your door. You can build it on screen, have it 3D rendered and sent to your device to show or share with your friends.

Apple have enough cash on their books to pay out Greece’s national debt 3 times over and still run their business for a year even with no sales. And they did it by making their product easy to use and putting a full ecosystem together to support the user.

Air bnb, uber, Spotify and many other companies are leveraging great user experiences and offering great value.

We are headed into an era of no screens, augmented reality and where the world is your screen and data is your overlay.

Pretty exciting times lay ahead as we catch up with the capability the Digital Revolution already lays before us.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

IoT Security

The Internet of Things, or IoT, is a pivotal component of the future and is driving initiatives from Smart Cities through Ubiquitous Computing and Augmented Reality. Of course the next step up from Smart Cities is a Smarter Planet. But we aren’t at Smart Cities yet.

An enabling technology like IoT can also have roadblocks to adoption. The principal ones being addressed now are:

  • power consumption
  • cost of goods
  • size
  • security

The biggest issue right now is IoT Security. Recent DDoS (Distributed Denial of Service) attacks have used IoT Devices as the attack launchers. They are being selected because many have weaker security than fully fledged computing devices.

DDoS or Distributed Denial of Service

DDoS or Distributed Denial of Service

In a recent article on IEEE Spectrum on the Path to IoT Security it is argued that IoT Manufacturers must take responsibility and not leave it up to end users. There is also a role of industry standards however no clear set of standards have yet been agreed. So although 2016 is the Year of IoT, with this being the single biggest category of product shipped, it is still very early days where things like IoT Security and IoT Interoperability are concerned.

IoT Security versus Software Security

This is not a new dilemma. Software Security is always important and it becomes increasingly important as Internet Communicating IoT Devices become more widespread. One apparent assumption underlying all this is that an IoT Device must be a fully IP Stack capable platform. That is not necessarily the case. In the video I shared about our Water Metering Remote Telemetry project one thing I didn’t mention is that the data stream is all driven from the IoT Device. There is nothing to log into. You can’t patch it with a Windows, Linux or other OS patch to override its function. It is not capable of being used in a DDoS attack because you can’t get to anything in it that can do that. So it is inherently secure against that form of risk.

Internet of Things Cconnectivity

Internet of Things Connectivity

However there are other risks. Nick Hunn has an insightful piece on Wireless Security for IoT where he argues that we are declaring security is present while having no evidence of proving it. That article is a little dated but the basic tenets still seem to apply. Just because a manufacturer or industry alliance states they have addressed security, it doesn’t make it automatically true.

So IoT Security is Software Security with the added component of protecting the physical hardware.

IoT Security in the Future

We still don’t have standards, so for now, individual device manufacturers and alliance members will need to ensure they have adequate security out of the box. The level of security required is determined by the importance of the data, either its security against unauthorised access, or its integrity against falsification. And at the asset level, its proof against either being disabled or used as an attack vector.

As an example, I am personally not so concerned if a hacker can find out how much electricity use my smart meter is reporting. Unless they get time of day usage and can correlate with other data sources to work out in advance when we aren’t home so they can rob us. My energy provider probably cares more about this data for all its customers coming into a competitors hands. Or maybe not. But I do care that I don’t get an outrageous bill because they were able to send fake data for my account to a server.

And energy grid managers care about usage data and Smart Meter appliance management being used to crash an entire electricity grid!

In the case of the Water Metering Remote Telemetry project I care that it remains online and working because otherwise someone will have to travel a long way to fix it. We have a facility in Gilgandra that is 892Km away as the crow flies. It will take a full day to get there and then another to back again. So I want it to be proof against some hacker disabling its communication ability. Since it has a physical antenna, I do care about that being hard to break. So some of these devices are put above normal reach and everything is inside a secure plastic case including the antenna. And our customer wants to know the reported water usage is correct. This means no missing data, and no incorrect data. They use the data to bill their customers.

One simple way to mess up data is a Replay Attack. If you can intercept and copy a data transmission, then you can play back that transmission any time you want to. You don’t even have to understand the content, the encryption, anything. Simply capture a HTTP POST or GET and replay it. Why does this matter? Because if the data transmitted is the volume of water used since the last report, then every time you play it back, you add to someone’s water bill. Or you distort the level of water the system believes is in a tank or reservoir. You can protect against these attacks in a number of ways but you have to consider the need to protect against them first of all.

There is a large volume of material on this topic. Here are some additional articles you might find useful for broadening your perspective on this topic:

I’m sure you won’t find it hard to search out a lot more articles. Just consider this. Once it has an Internet connection, any device can access anywhere in the world. And most firewalls protect against incoming attacks. A corrupted device on the inside can get out any time it wants to.

Internet of Things Global Reach

Internet of Things Global Reach

And if you want a really interesting view of what this could be like 10 years from now, I recommend reading Rainbow’s End by Vernor Vinge. Enjoy. And this isn’t my first reference to this book because I think it is fairly prescient in its exploration of a most probable future.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2016 Successful Endeavours Pty Ltd.

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