Smart Machines

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Smart technology has evolved over the past decade thanks in large part to the proliferation of the Internet. The world has been altered as a result of ubiquitous computing, cloud technology, mobile computing, Wi-Fi, location-based services, analytics, and sensors. These developments facilitated an exploration within what machines may accomplish via these new technologies.

Smart machines are devices with the following characteristics:

  • Internet-connected
  • Capable of automated processes or behavior
  • Adaptive to surroundings for user-optimized processes

Machines exhibit smart behavior by drawing upon the vast information and network available within the Internet. This technology is promising because it attempts to reduce the need for human input by providing automated and optimized services for users. Machines that learn and adapt epitomize the possibilities available within smart technology.[1] Self-learning machines provide an appealing value proposition for consumers and businesses in the future.


The Internet of Things

Intel’s Efforts within IoT

Gartner predicts that the Internet of Things (IoT) is on the rise, as it is a technology with significant potential and worth noting in its 2012 Technology Hype Cycle.[1] As the Internet has reached ubiquity, the number of devices connected to the Internet has now exceeded the human population.[2] This offers new applications for users because machines now have the ability to communicate and interact with each other.

The Internet of Things refers to objects utilizing the Internet in its operation.[3] Connectivity brings a wealth of opportunities for users; the data that is transmitted from machine-to-user or machine-to-machine may be harnessed for valuable analytics. Numerous organizations are capitalizing on this technology at the consumer-level via new product offerings but companies are also using the IoT to create efficiencies.

Large technology companies such as Intel, Cisco, and IBM agree that the IoT represents a new opportunity; integrating smarter technologies into society will be a prominent discussion point for people seeking stronger conveniences and process improvements.

Smart Homes

Smart Homes refer to houses with connected devices; these objects are connected together to enable the monitoring as well as control of appliances and other home machines.

According to Juniper Research,[4] Smart Homes contain the following components:

  • Internet Broadband Connection
  • Residential Gateway
  • Connected Devices
  • Operations, Billing & Other Value-added Service Providers

Many Smart Home features derive from the high-speed Internet connection available within broadband. This connectability is further expanded via devices like residential gateways; these devices facilitate quick interaction by allowing all connected devices to communicate at a central location.

Connected devices are another important element of a Smart Home. Today, consumers possess numerous Internet-enabled devices as a result of smartphones and tablets; these serve as important controlling devices. However, the success of these applications is dependent on appliances and other home devices being connected together for the user to control. Smart Homes may also incorporate value-added service providers (such as hydro and electricity providers) via providing energy consumption data to users

Smart Homes possess the following features:[5]

  • Automation
  • Multi-Functionality
  • Adaptability
  • Interactivity
  • Efficiency

As with other smart machines, the goal is provide a more automated and optimized experience for people. Smart Homes entail removing some human input in order to generate use cases that adapt to the home’s environment; Smart Home devices are often connected with other machines and technologies in order to create efficiencies and cost-savings.[5]

Juniper Research provides the following list of several Smart Home use cases:[4]

  • Remotely control lighting and heating via mobile devices
  • Home monitoring via security cameras connected to computing devices
  • Monitoring health conditions (ie. heart rate and insulin levels) and sending automated alerts to family members and physicians.

Future Smart Home Applications

As smart technologies grow, new smart home applications are being created by various startups and technology leaders. The following are two examples.

SONTE Window Shades

Mashable reported that a California startup, SONTE, has designed a Wi-Fi-enabled set of window shades.[6] Users attach a window film on existing windows and use their smartphones to conveniently control the film’s transparency.

LED Bulbs

Another emerging application relates to Internet-connected LED Bulbs that communicate with other computing devices.[7] Users may control the brightness and even turn on or off the bulbs from the convenience of a smartphone.

By replacing all 60-watt incandescent bulbs in America with 10-watt LED bulbs, this “could save about $3.9 billion in the country’s annual electrical bill”.[7] As a result, smart LED technology has significant business implications because of its cost-saving abilities.


The future is very likely to entail complete Smart Homes whereby all devices are connected and communicating with each other; users would be able to benefit from the automation and optimization aspects of smart machines. That being said, some people may very well be hesitant to integrate that much of their homes with the Internet. People fear being monitored unsuspectedly, especially within a place as sacred as their homes. Adoption may be slow to begin with but, there is no doubt that one day, homes will be smarter than people once knew, as evidenced below.

Home & Business Applications

Energy Efficiency

Smart technology allows users to monitor their homes’ energy usages. This is created when systems are installed and connected to sensors. The gathered data is wirelessly communicated to the service provider and onto a cloud-based server in many instances. Users may then monitor their cost and consumption in real-time on the Internet. This promotes energy- and cost-saving possibilities in the long-run.[8]

Examples of current energy-efficient Smart Home technology:

BC Hydro Smart Meter

The Smart Meter is installed outside homes and usage information is transmitted to BC Hydro. Smart meters provide a two-way communication platform for BC Hydro to monitor household electricity usage. It is multifunctional, as it not only accumulates data but also allows users to track power outages in any area within BC.[9]

This technology has arisen because of the potential cost-savings available to service providers and consumers. This aligns with BC Hydro’s strategic direction because conserving energy, within BC, allows the company to fulfill BC’s energy demands (by lowering consumption needs); it also may make available additional electrical generation capacity for other monetization purposes.

Nest Thermostat

This thermostat learns from a house’s heating patterns and optimizes the heating settings according to the resident’s regular routine. Furthermore, users are able to control the thermostat while away from home because there is a smartphone application that accompanies the thermostat.[10]

This product has a huge advantage over other applications because it is currently being distributed within Apple retail stores and it is compatible with many pre-existing home heating systems.[10] The Nest Thermostat is one of the first Smart Home applications that have made it into many households because of its ease-of-use and cost-saving abilities.

Belkin Echo Water and Electricity

This is an application of sensors being installed at nearby pipes to collect data about utilities usage. Just from under a kitchen sink, it identifies wastage and leaks indoors and outdoors.[3] Once installed, Echo Water senses vibrations in the plumbing system every time water is used, accumulating data about how much water is used and for what duration. The sensors then send this information to a cloud-based server so that analytics may be performed.[11]

Belkin has effectively leveraged many emerging technologies in this application, creating a cost-saving opportunity for many residents and building owners.


The IoT has allowed security systems to operate on a much more convenient and ubiquitous basis. Security systems, connected to the Internet, enable users to watch live security footage with relative ease. For example, security cameras may be controlled directly from smartphone applications as well as automatically save videos or send email alerts when it detects movement via motion sensors. By leveraging the connected aspect created via the Internet, users are able to share content between smart devices for security purposes.

The following are two examples of smart security applications.


This product involves installing an iOS application onto at least two devices, whereby one device may be used as a surveillance camera. Images are fed live to the other device using the same application from anywhere in the world because it involves simply an Internet connection.[12]

Belkin NetCam

This product is a Wi-Fi camera that is equipped with infrared night vision.[13] It was designed to make home security easy and portable by connecting directly to Wi-Fi routers. It involves simply downloading a free mobile application. The NetCam is capable of sending email alerts and automatically taking still shots if it detects any movement.[13] This expands upon the features of legacy security systems due to the automated functionality.

Automotive Industry

Vehicular automation involves the use of artificial intelligence to operate a vehicle.[14] Automation technology has become much more sophisticated over the years because manufacturers have strived to increase efficiency and convenience for drivers. This has resulted in autonomous vehicles requiring little to no human input to perform tasks that formerly required human control.

Vehicles are becoming smarter devices as a result of this vision; drivers are now able to leverage the Internet for information and as a means to connect their cars to their digital networks. By incorporating various multi-media and remote-control functionalities to provide an automated and optimized experience, vehicles are the next ubiquitous frontier for smart machines.

Various aspects of a vehicle are controlled using smartphones. This promotes convenience, entertainment (ie. Bluetooth audio streaming), and safety (ie. night vision and emergency calling).

Audi Pilot Parking Vehicle

With the touch of a button on a smartphone application, drivers may now instruct their vehicles to park itself and pick-up the driver. Audi’s Pilot Parking Vehicle was showcased at CES earlier in 2013. Audi says that this hardware is currently available for use in their vehicles, although the software is still in its early development stages. This technology is expected to be available by 2018.[15]

Audi is also exploring wireless parking payments which would “allow for two-way communication between car[s] and parking facility[ies]”.[16]

BMW ConnectedDrive

BMW has made strong efforts to increase its cars’ connectivity as a result of the emergence of various smart consumer devices. In years past, users had to connect their phones via Bluetooth to create connectivity with cars. However, in July 2013, BMW introduced built-in SIM cards as a standard feature.[17] BMW also introduced various features in 2013 related to social media access (Facebook and Twitter), calendar synchronization, and access to large libraries of entertainment media.[17] The Internet is being embedded into vehicles and this is a prime example of how automakers are transforming cars into smart machines. Cars are now capable of more automation in an effort to provide drivers with enriched driving experiences.

BMW ConnectedDrive’s most attractive feature is its Intelligent Emergency Call system. When airbags are activated, the Intelligent Emergency Call system’s accident-proof telephone automatically informs BMW’s emergency services.[18] The car’s system detects the vehicle’s precise location, number of passengers, and other relevant data. This technology has the potential to reduce roadside fatalities and injuries by providing appropriate medical assistance in an automatic and timely manner.

Retail Industry

Communication between machines enables innovative advances in technology. The retail industry has evolved dramatically because more and more people are connected to the Internet. With the popularity and ease of online shopping, retailers will need to update their physical stores to match this technological advancement.[19] This is often referred to as “Smart Stores”, where services are delivered with the use of the Internet and smartphone applications in physical retail locations.[20]


Currently, retailers have already begun using tablets and digital signage to enhance customer experiences in-store. Some retailers have further explored the self-checkout system, decreasing the wait time in checkout lines by allowing customers to use their phones to scan items before proceeding to pay at self-serve kiosks.[21] A few retailers have also begun using a tracking technology that plays a video on a product when a customer reaches for it.


Cisco envisions the Internet of Everything occurring, whereby machines communicate with each other, sensor networks, and the data that it creates.[22] By bringing data together from various sources and using sensors to identify customer needs, retailers will be able to target the customers based on history, location, and activity.[23]

Cisco’s Imagination of an IoT Retailer

The retail industry is poised to incorporate new technologies within its brick and mortar stores in an attempt to provide more enjoyable and long-lasting shopping experiences. This is in large part a response to consumers seeking e-commerce options as opposed to entering physical stores. Although e-commerce may be captivating for large organizations with numerous product offerings, retailers that sell certain experiential goods may like to avoid smart technologies. It may be a risky endeavor because consumers may substitute human interaction (ie. sales staff) in favor of perhaps a screen that displays a product’s merits with some personalized data.

The following video demonstrates how some retailers may one day integrate smart machines into their stores.

The video demonstrates the following smart features:

  • Identifying a customer’s visit via their car entering the parking lot
  • Maneuvering shopping carts efficiently across aisles by mounting a connected device onto the cart (ie. providing product location information by aisles)
  • Creating automated purchase check-outs by having doors communicate with smartphones

That being said, the challenge for retailers is to effectively balance the process efficiencies and variable cost-savings with the customer service elements and initial investment costs associated with smart machines.

Manufacturing Industry

The Internet offers a new ability for machines to interact and supply data during key business decisions. Within a manufacturing environment, smart technology enables companies to expediently manage the assembly process so as to minimize idle periods. For example, sensor-equipped machines enable managers to quickly interact with their technology, ranging from location-based tracking to even alerting employees of troublesome areas.[1]


Cisco believes that the manufacturing process may be dramatically improved via integrating networks and utilizing connected machines in this manner.[2] At its basic nature, many businesses have used this philosophy to connect their systems to their suppliers’ technologies in order to facilitate a more expedient supply chain; this has achieved lower downtime and greater efficiency. However, a further innovation that Cisco has been supplying is the ability for machines to become self-aware. An application of this is when machines adjust their operations and alert people of maintenance needs before problems occur.[1] This is facilitated via sensors and data analytics transmitted over the Internet.

Predictive Maintenance Explanation

Predictive Maintenance

The IoT envisions machines communicating with each other to complete business processes. For example, Bosch offers solutions in this space via predictive maintenance.

Predictive Maintenance refers to machines becoming self-aware, alerting users when they require repair.[1] Sensors and analytics are combined to take advantage of connecting machinery to other computing devices.

At its core, this refers to placing computer chips into machinery and linking them to sensor technology. The Internet enables this data to be transmitted from the machine to an ERP system so as to trigger parts maintenance or replacement. This is how Rolls-Royce ensures that its engines are serviced optimally and only when necessary.[2] Ultimately, this decreases downtime and ensures that maintenance is provided on a cost-effective and optimized manner.

Health Care Industry

People aged 60+ is the fastest growing segment in the U.S., and is predicted to represent 20% of the total population by 2025.[3] This entails significant housing costs in the form of nursing and retirement housing for the elderly. However, Smart Home technology in accompaniment with Home Intelligence (HI) is considered a viable alternative to these other homes.

Home Intelligence

HI is an important part of a Smart Home because it provides the basis for homes to learn from changing conditions. The learning is done by the Artificial Intelligence (AI) at the core of this technology. The AI mechanism infers and consequently reacts to changing conditions and events within a home’s environment. By identifying abnormal events, the home either prompts a message to the home’s occupants or takes an automatic reaction if desired. This system is complex; as a result, integration between the information technologies, developers, suppliers, and users is important.[4]

Monitoring Elderly Individuals

The HI module is pre-programmed to be always listening; thus, it is always collecting and analyzing data from the various sensors. The system has the responsibility to classify an observation as “normal” or “abnormal.” Every action goes through an algorithm that is programmed into the system. Different user profiles may be created to monitor the different individuals in the house.[3] User’s current health conditions may be recorded in the database for better optimization and response procedures.

Sample Scenario

James is 69 years old, and due to his age, he has developed dementia. This is a disease common for the elderly and it results in decreased mental abilities and increased forgetfulness.

  1. The doctor prescribes him blood pressure medicine that he needs to take every morning. The HI system is programmed with this information. There are infrared motion sensors attached to his medicine cabinet that collects the data whenever he takes the medicine. One day he forgets to take the medicine at 9AM. The HI system will prompt him with a reminder message on his cell phone at 9:15AM to take his medicine.
  2. James decides to cook lunch but forgets to turn off the stove afterwards. The heating and fire sensors collect this data and sends a message to James’ cell phone about turning off the stove.
  3. In the evening, James experiences a seizure as a result of his high blood pressure and falls onto the floor. The motion sensors detect this event and an emergency call is made. His son is also sent a text message about this incident.


Although this technology is convenient, there are still some considerable concerns associated with embedding this technology into the home. Substituting a Smart Home for a nursing home may provide the users with added independence but, human interaction and supervision are often necessary for their health needs. Also, confining them to a home with gadgets constantly monitoring their actions may cause psychological resistance.

All technologies are at risk of failing at one point or another and this is applicable for Smart Home technologies as well. As this application will be responsible for managing the health of elderly people, technical failure cannot occur for the technology to be viable. That being said, this is an emerging technology capable of accommodating the significant number of baby boomers entering retirement age in the near future.

Analysis of Viability

Smart technologies have been suggested as viable solutions for the home and business environment because of its various benefits; however, there are also risks and disadvantages that must be considered.

Advantages at Home

Convenience is one of the biggest reasons that people would use smart machines and devices. In the case of Smart Homes, these applications allow users to benefit from remote control and monitoring as well as more optimized energy and appliance usage. For elderly or disabled residents who want to grow old in their own houses, Smart Homes empower them to maintain independence for more extended periods. Energy efficiency is also improved when people seek smart devices to control their home thermostats and lighting. These automated processes in conjunction with energy-efficient appliances, facilitate efficient utilities usage.

The cost-saving implications are significant because of the recent sustainability trend that has emerged in North America; smart technology is on the forefront of these growing eco-friendly initiatives and many companies are flocking to create these new devices for the home.

Advantages for Businesses

Smart technologies generate benefits for businesses in the form of facilitating stronger data analytics and cost-saving opportunities as well as improving organizational processes.

Data Collection

As smart machines involve integrating more and more computer chips within devices, data is also now more readily collected and available than ever before. By connecting chips and the Internet to so many machines and processes, this data may now be used to generate holistic views of consumers and business processes; with the aid of Big Data and business intelligence, smart technology will lay the foundation for stronger analytics and strategic decisions. At the consumer-level, Belkin has already endeavored to produce a home application that utilizes analytics in the cloud to improve utilities consumption;[5] imagining this at an organizational-level is not difficult.

Cost-Savings and Process Efficiencies

Smart technology’s purpose is to aid users via automation and optimization. In a business context, this may materialize as streamlined processes via reducing labor costs (ie. automated machines needing less human input); this may also occur via utilizing analytics to better identify inefficiencies.[6] In the manufacturing industry, predictive maintenance is an example of reducing machine servicing costs.[1] In the retail industry, connected devices also provide a basis to increase efficiency within say for example, the checkout process;[7] more enhanced customer experiences may also be delivered via the connected nature of smart machines.


Smart technology also possesses several risks and challenges. Concerns are often associated with: investment cost, psychological acceptance, and privacy.

Investment Cost

Smart technologies may create conveniences and variable cost-efficiencies but, the initial investment is often quite significant. For individual consumers to replace all current appliances within a home so that it becomes “smart”, would create a significant cost barrier for adoption. This disadvantage also applies to businesses because capital infrastructure would need to be replaced or modified to incorporate smart technologies. The accompanying devices (such as wireless cameras, light sensors, and automated systems) as well as the installation and maintenance costs must be considered.[8]

Psychological Acceptance

As with other new technologies, people need to first learn how to use the technology before it may be integrated into daily processes. For example, owning a Smart Home entails learning how to control the accompanying smart devices; for the elderly, this may prove challenging because of declining cognitive abilities. Unlike traditional homes, Smart Home technology endeavors to minimize human input. This automated living experience may cause some resistance because of the significant dependence on machines to control their day-to-day activities. These psychological barriers may prevent companies from achieving large scale commercial success in the immediate future.


Smart machines also raise a major concern about privacy because of the significant amount of data being collected. As such, if this data is obtained by unauthorized entities, the result may be unsuspected monitorization. This is not so much of a concern for devices like the Belkin Echo or Nest Thermostat because this data is less personal; however, hacking into smart security cameras is a tangible privacy threat for homeowners. Furthermore, businesses may not want their connected devices to be accessible by hackers or even competitors. For example, retailers may not want their customers’ information to leak as a result of large scale smart device integration within its stores.

The Future

Today’s smart machines are only at the beginning of what they may become in the next decade.[6] Although consumer devices such as the Nest Thermostat and Belkin Echo have demonstrated applicability in the home, more value is predicted to be created over the coming years. As society makes the Internet more readily and reliably available, smart technology may only grow.

Cisco predicts that the IoT represents $14.4 trillion USD from 2013-2022.[6] This value is said to be realized via improving business processes and offering new innovations. The following table is an excerpt from Bradley et al.’s prediction; the amount is divided into the five categories below (2013).

Category Total Value (trillion USD) 2013-2022
Asset Utilization (reduced costs) 2.5
Employee Productivity (greater efficiency) 2.5
Supply Chain and Logistics (eliminating waste) 2.7
Customer Experience (obtaining more customers) 3.7
Innovation (new revenue streams) 3.0
Total 14.4

In order to realize this value, organizations need to overcome the initial investment hurdle; existing capital assets may need to be replaced for Internet-connected machines. This is a challenge for many businesses because of the fixed nature associated with these long-living assets. However, increased productivity is tangible value that may be obtained via smart technology.

The IoT allows information to flow amongst machines so that users may concentrate on the human aspects of information systems. Smart machines are poised to create value, be it through logistics, labor, or customer services.[6] That being said, the first step will be difficult because the appropriate synthesis of analytics, the Internet, Big Data, and location-awareness will be met with legacy technologies in resistance.

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