Place 2014 Recap: Finding Technologies to Scale Indoor Location for the Future
By Dan Ryan
Last week in New York City, executives from across the burgeoning indoor location market met for Place 2014: The Business of Location. Opus Research, which organized the event, predicts the market for indoor location and place-based marketing will surpass $10 Billion by 2018 and will eventually be worth $25-50 Billion annually.
I participated in the event on the Indoor Technology All-Stars panel hosted by Google’s Don Dodge (a ByteLight investor) alongside Nathan Pettyjohn, CEO of aisle411; Chris Godall, CEO of of Trusted Positioning; and Steve Cheney, SVP of Business and Operations at Estimote.
Most of us agreed that indoor location will vastly disrupt and highly impact several areas including network and IT spending, mobile coupon distribution and broader in-store shopper engagement.
However, there was a lively debate over if the Bluetooth Low Energy (BLE) beacon market can scale to meet industry demands in the coming years. While BLE beacons certainly have the momentum behind them - given their connection to iBeacon (both literally and figuratively) - they haven’t been used in large scale deployments - yet. Questions loom on how venues will replace batteries, and who will deploy and maintain what would be an entirely new infrastructure.
Although forecasters are saying there will be 60 million BLE ‘beacons’ shipped by 2019 – that’s certainly not enough hardware if the indoor location market really wants wide adoption among large retail outlets.
Big-box retailers like Wal-Mart with large storefronts and thousands of stores would need a very large number of beacons to create an indoor location network that provides wall-to-wall coverage. For instance, with most BLE beacon makers suggesting a range of 32 feet and Wal-Mart stores being 102,000 square feet in size on average, they would need to deploy around 32 beacons per store. Wal-Mart, which has more than 4,800 stores in the U.S., would need more than 153,000 beacons. With a beacon cost estimated at around $10, they’d probably be looking at an initial investment of more than $1.5M in hardware costs in the U.S. alone.
Then comes the maintenance costs. While some BLE beacon providers are saying their batteries could last as long as two years, the reality is one year may be the max lifetime and some providers are selling beacons that only last three months. Imagine being a big-box store like Wal-Mart who needs to replace 153,000 beacon batteries annually or maybe even quarterly? You’re talking about new installation and maintenance teams, platform and network managers, etc.
This likely points to BLE beacons being replaced in full annually, rather than simply replacing the battery. That $1.5M initial deployment cost just became an annual overhead expense.
And remember, this is just to support proximity-based indoor location – e.g. a connected shopper has entered the shoe department. To support positioning-based indoor location – e.g. a connected shopper is standing in front of Nikes - the retailer would need to deploy at least 10x the number of beacons, or going back to our basic example 320 beacons per store. Reducing a beacon’s range from 32 feet down to 3 feet is required for this kind of brand-level engagement, but quickly puts beacon deployment off the charts - 1,530,000 beacons for a cost of more than $15.3M in hardware.
That’s a big price to pay for additional hardware. It’s no wonder retailers are concerned about the scalability of beacons, especially when compared to other data-emitting hardware platforms like Wi-Fi and LED lighting which are already in-store and therefore more cost-effectively able to support indoor location.
A retail executive at the conference from Toys“R”Us noted that it will be extremely difficult to go to his managers asking for an entirely new in-store network to join point of sale, Wi-Fi, lighting and other systems already on store floors. Today the store manager is responsible for managing heating, WiFi, the lights, the POS system, scanners and inventory management. Now you’re going to add a battery-powered network of potentially thousands of beacons to his desk? I just don’t see it happening.
These are some of the issues with scaling indoor location with technologies like standalone BLE beacons and reasons why I really believe LED lighting fixtures will become the platform of choice for indoor location. While BLE beacon shipments will be measured in millions through 2020, LED lighting fixture shipments will be measured in billions – around 1.28 billion annually by 2021 - according to Navigant Research.
Another topic addressed on the Place panel was how do we unlock the next generation of apps beyond proximity and what technical issues arrive when scaling indoor location technologies. Many agreed that this is really just the first inning of indoor location, where it’s all about iBeacon and somewhat standard geo-fencing. The next inning of indoor location (probably only 12-24 months away) will be about micro-targeting (brand-level engagements within three feet) and ultimately utilizing indoor location platforms as a gateway for the Internet of Things.
That is when it will become difficult to scale beacon technologies and ensure they can power more enhanced sensors and applications. Indoor location nodes will need to talk to each other and other connected things, and they’ll need contextual understanding and a network to pull it all together.
It’s this additional reason why I’m bullish on lighting as the wall-to-wall platform that can scale and power these indoor location networks of the future, and why there is a need to strongly consider scalability today when evaluating indoor location technology.
As retail stores and other buildings are retrofitted with LEDs, they're already taking vital steps to set up this new scalable indoor location platform and a true trojan horse for the Internet of Things.
According to Google Developer Advocate, Don Dodge, the Internet of Things (IoT) requires a ‘brand new network.’ He made some great points at the recent MIT Technology Review Digital Summit, but the linchpin of what he’s really talking about here is small cells.
Don Dodge discusses why design and user experience combined with being first to market are tremendously important for today's digital culture.
First Mover Advantage is real. The first product on the market has a big advantage...if the product actually works. People get used to the product, get to like the user experience, and develop a user community culture. Users invite their friends and the viral growth cycle starts. Once the user community starts to grow virally they are not likely to switch to another product...even if it is better. A competing product with a few new features, or something that is faster or cheaper, isn't likely to steal away many users.
Finish reading Don's analysis here. Then think hard about that idea you want to build, and how long it will take you to get it out... first.
Wer die letzten Tage nicht vom Internet getrennt gelebt habt, wird mitbekommen haben, dass der RSS Reader Bloglines zum 1. Oktober seine Pforten schließt. In der Folge gab es unzählige Berichte darüber, wie irrelevant RSS Reader im Vergleich zu Twitter, Facebook,... geworden sind. Häufig kamen die Berichte von Bloggern, die eigentlich davon leben, dass sie News weiter verarbeiten.
Ich habe mich schon die ganze Zeit gefragt, wie diese Leute auf Twitter ihre News Filter organisieren. Nun ja, im Endeffekt vertrauen sie wohl eher auf Techmeme, Hacker News und andere Aggregatoren. Der von mir absolut nicht geschätzte Don Dodge hat das mal für uns alle aufgeschrieben.
Dodge:
My reading habits have changed too. I don't use RSS readers much anymore. Techmeme, Digg,HackerNews, and Google News aggregate everything I have time to read. My friends on Twitter,Facebook, and Google Buzz deliver a constant flow of news, quotes, and wisdom in real time. If it didn't make it onto one of these channels it probably isn't important to me.
Er hat also RSS Readern abgeschworen?
Nun ja, ein paar Idioten soll es dann aber doch geben, die seinen Output auf eher traditionellem Wege konsumieren und in die Welt tragen sollen.
In der rechten Sidebar seines Blogs finden wir diese hübschen Buttons:
Und am Ende jedes seiner Postings erblicken wir diesen Hinweis:
Ja, ja, RSS Reader sind tot. Das glauben selbst die nicht, die es proklamieren.
