Business Models of The Internet of Things - An Analysis of Pachube's Open Source Platform
Yesterday we analyzed some of the applications being built with Pachube, an open source platform enabling developers to connect sensor data to the Web. We at ReadWriteWeb think that Pachube is an excellent example of one of our Top 5 Trends of 2009: Internet of Things. So we're exploring Pachube in-depth in a 3-part series.
This is Part 3, where we'll look at Pachube's business model and delve into its platform. I spoke at length to Pachube founder Usman Haque to find out how Pachube intends to make money, how it will compete against big vendors such as IBM and Microsoft, and why it chose to be an open source platform.
Pachube's Business Model
When we first profiled Pachube back in May, Usman Haque had hinted at a "killer" business model that was being kept under wraps. As ReadWriteWeb is a naturally curious entity, we prodded Haque for more details. Unfortunately, he wasn't forthcoming on the killer business model - although he did tell us that Pachube's business model is "slowly adapting as we talk to big and small businesses."
Haque explained that Pachube's business model is predicated on the following theory: if you want a free service, then data
will be open; but if you want privacy, that's what you will pay for.
According to Haque, "privacy is the most valuable model." Paid Pachube users will also get increased bandwidth and other extras.
Haque explained that most M2M (machine to machine) systems are built from the ground up to be secure and closed. For Pachube they decided to build an open system, but put in walls and privacy for premium offerings.
How is Pachube Different from The Big Boys?
Pachube isn't the only organization creating a platform for sensor data. All of the big Internet companies have sensor data projects of one kind or another underway - IBM, Microsoft, Apple, Nokia to name some.
Haque explained that many of those large companies are helping to evolve a standard called IPSO, which aims to be a standard way for smart objects of the future to communicate. IPSO is promoting a new Internet Protocol for the networking of smart objects, to use instead of the standard Web protocol of HTTP. Correction: IPSO is promoting the Internet Protocol (IP) for smart objects.
Haque explained that Pachube is currently based on HTTP; and will continue to be for the near future. He thinks it will take 6-7 years for smart objects to standardize on IP. So, for example, an IP-based fridge will take a while to roll out.
Meanwhile the big companies that are members of IPSO (and even those outside that alliance) will determine what will be used in the future. Haque said that Pachube will easily be able to transfer, when the time comes. Their aim right now, however, is to "make something that you can build with straight away." According to Haque the big boys are looking at the long term, but they're not able to be agile and change quickly like Pachube.
Haque also explained that Pachube was built to capitalize on the growth of web 2.0 (social, collaboration, power of networks, etc) - and apply that to physical environments.
The full 3-Part series on Pachube:
- Pachube Adds Real-Time Notifications - More Power to The Internet of Things
- Applications From The Internet of Things - An Analysis of Pachube
- Business Models of The Internet of Things - An Analysis of Pachube's Open Source Platform
Image credit: centralasian
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There is a factual error with regards to the IP for Smart Objects (IPSO) Alliance. The purpose of the IPSO Alliance is to promote the Internet Protocol (IP) for smart objects, not to push any new protocol standard. Running IP in smart object networks has tremendous benefits in terms of interoperability with existing networks and applications. There are, however, challenges left in adapting low-power radio links to running IP, such as header compression (ietf 6lowpan) and routing (ietf roll). That's where the new standards are needed - to make IP run efficiently on smart object networks, not to replace IP.
Pachube is an example of the class of emerging applications that benefit from having IP connectivity with smart objects.
Adam, thanks for the correction. I have updated the post accordingly.