Earlier this month we reported on the sale of Pachube, a pioneer in the evolving Internet of Things [IoT] landscape. ThingWorx is a similar company, in that it provides a platform for connecting real world objects to the Internet. Where ThingWorx differs is that it has a solutions and services model primarily targeted to the manufacturing sector, whereas Pachube created a community platform. I spoke to Rick Bullotta, Co-Founder and CTO of ThingWorx, to find out the origins and assess the chances of this next generation Web company.

As Bullotta put it, they "built a successful business applying Web 1.0 technologies to the industrial sector." Now he, Fadel and third co-founder John Richardson (another manufacturing software expert) are "busy building a quite groundbreaking platform to hopefully unleash the true potential of the IoT."

What ThingWorx Does

ThingWorx started out in 2009 with a strictly commercial model that focused on what Bullotta described as "mundane industrial business."

The founders of ThingWorx thought that manufacturing companies building apps in the emerging Internet of Things space were constantly re-inventing the wheel - with features like visualization, search and collaboration. So the idea with ThingWorx was to create a platform with all of those pieces and more, enabling manufacturing companies to build on top of it.

The company is also currently involved in projects related to remote healthcare, building automation, energy optimization, smart grid infrastructure and M2M applications.

Although ThingWorx is tapping into the buzziness of the Internet of Things trend, Bullotta says that the term may not align well with their company. He prefers the term "Intranets of Things" - meaning internal networks of people and applications inside companies. According to Bullotta, ThingWorx is ultimately about "connected applications" in an industrial setting. Whereas Pachube, he noted as a comparison, is "coming at it from a data perspective."

ThingWorx takes a holistic view of manufacturing systems, aiming to connect people, systems, and the physical world. "When I look at a thing," Bullotta told me, "it's much more than data - there are services, people, properties [of things]."

ThingWorx got a second round of funding earlier this year and Bullotta says they have gotten "good traction" among OEM companies [Original Equipment Manufacturer]. These companies, he said, are good at making widgets "but they all tend to suck at software."

Although he didn't name customers, one is using ThingWorx to build a "smart grid for infrastructure monitoring." Another, a beverage company, is using it to develop a sustainability solution.

Playing With The Big Boys

I asked Bullotta what makes ThingWorx different from large technology companies like IBM, HP, Cisco and Verizon Wireless - all of whom offer IoT solutions and services.

"They're doing all our marketing for free," offered Bullotta, somewhat tongue-in-cheek. In other words, the likes of IBM's Smarter Planet campaign is promoting the need for Internet of Things solutions. The Cisco infographic about Internet of Things, which was a very popular post on ReadWriteWeb, is another example.

Looking past marketing, Bullotta said that "a lot of what they [the big tech companies] are doing is very service intensive, custom intensive." They sell the software they have and services on top - there is no "pattern of repeatability," according to Bullotta.

The business model for ThingWorx is pretty simple: subscription based license fees per server / user. They're not interested in the consumer market, they let their OEM partners take care of that. So, ThingWorx is kind of like a niche IBM, in terms of how it makes money.

Successful Formula?

ThingWorx may not have the sexy open data IoT model that Pachube had, but industrial software pays the bills - and historically makes an attractive acquisition target for large IT companies.

One senses that Bullotta and company are using almost exactly the same formula with ThingWorx that Bullotta and Fadel used with Lighthammer Software: build forward-thinking manufacturing software and get acquired by an SAP a few years down the track.

Sounds very smart to me.

I'm rather surprised that Pachube sold itself so early. Since its founding in 2008, Pachube has aimed to be the leading open development platform for the Internet of Things - and it appeared to be building that out quite nicely. So why didn't it continue to ramp up independently, potentially becoming a much more valuable platform in a few years?

$1 million per quarter in operating costs is a lot of money and it's likely that Pachube was struggling to match it on revenue. According to the press release today, Pachube users send more than seven million datapoints to the service each day. This data comes from sensors, devices and environments. So infrastructure and bandwidth costs would have been not insignificant.

What Was Pachube's Business Model?

Did Pachube have a sufficient business model? It's something we've constantly asked the company about and monitored over time.

We first covered Pachube in May 2009, at which point its business model was still in development. Pro accounts, tools and applications for medium-scale manufacturers and developers, involvement in large-scale urban infrastructure projects and a secret "killer" business model in development were the four things listed at the time.

In October of 2009, I explored Pachube's business model further in an interview with company founder Usman Haque. He explained that Pachube's business model at that point was 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.

"Privacy is the most valuable model," said Usman Haque in October 2009. The company hoped that Pachube users would be willing to pay for privacy features, along with increased bandwidth and other extras.

Update: Usman Haque told ReadWriteWeb after this post was published that the "open data ecosystem" is currently Pachube's main business model focus. I've requested further details.

However, revenue figures were conspicuously absent from the announcement today. It's likely that Pachube never found a great business model that would allow it to continue scaling. Hence, why it sold now, relatively early in its life cycle.

Having said that, I'm happy that the Pachube dream is still alive and will probably flourish inside a bigger company like LogMeIn. At this year's CTIA E-Tech awards, LogMeIn was the winner in the Productivity, Utility and Public Safety section. So it's obviously no technology slouch and will offer a good home for Pachube.

Pachube was one of ReadWriteWeb's top Internet of Things companies of 2009 and 2010, so we want to see it continue to grow and scale. Let us know your thoughts on the acquisition in the comments.

I took a look at a number of the projects that were worked on. In this post I'll highlight three, two from the U.K. and one from NYC. What all 3 projects show is that development around the Internet of Things is still very experimental. Perhaps too experimental. While there was lots of creativity on display, in all honesty I was hoping to see more projects that showed commercial potential. So I have to ask, as an open question at the end of this post: is there enough commercial activity currently happening in IoT?

Remote Controlling a Microscope

The following was an interesting project from the New York City hackathon, showing how a cellphone can be made into a remote control for a real world object connected to the Internet. This was developed using sensors and Arduino ("a tool for making computers that can sense and control more of the physical world than your desktop computer").

The speaker in the video explained that one use case might be enabling people to operate a microscope in a museum, using the phone as remote control - so they can't touch the actual microscope. It allows people to "interact with the real world, in a way that's a little bit shielded off." The first one and half minutes of the video has a good explanation of this.

Apple Hacking (Actual Apples, Not Steve Jobs' Company)

The hackathon in Lancaster, England, ran their event outside - in an orchard at Lancaster University. Participants used tree sensors to detect things like tree growth patterns and orchard weather. The goal going in to the event was to plant 4 apple trees and sensors, then "get applehacking through the night."

The results (made available as a PDF poster) included an "Apple of the month" system. It deployed tree sensors to calculate tree growth patterns, from which "apple recommendations" can be made. The organizers explained that this "recommendation system helps students rediscover local orchards as sustainable source of healthy and enjoyable food."

The results unfortunately didn't delve more into how these systems were made or what they actually do, but from what I can gather it was a fun day of experimenting with apple tree sensors. It's unclear what these sensor systems would be used for, other than educating students. But I can imagine this kind of sensor system being useful for apple harvesting and giving consumers information about the apples they purchase.

Photo: Hvpritchard; see more photos from the Lancaster event on Flickr.

Marvin the Paranoid Laptop

Finally, at the main London event, Pachube founder Usman Haque named Marvin the Paranoid Laptop, by Sarah Mount, as his favorite project. Haque explained that the project "involved using Pachube to monitor a range of internal variables from a laptop (temperature, load, capacity, threads, etc)" and then using that data to interact with the laptop. Haque found this to be an inspiring project because "it wasn't about the data, it wasn't about the hardware, it was about the human interaction."

As with the previous two projects, Marvin is very experimental and pretty geeky. However, like the NYC remote control project above, it enables people to interact directly with Internet-connected devices. In the case of Marvin, the device is just a common computer. Imagine though that it's a car, or a garden shed, or a washing machine. Being able to interact with and communicate with devices like that is where the real power of the Internet of Things will show through.

Too Many Experiments, Not Enough Commercial Activity?

Given what I saw of the projects from Pachube's hackathon, many of the developers are still playing with sensors and data feeds and hooking those up to either computers or electronics devices using Arduino. The apple tree experiment was probably the closest I saw to something that could be developed commercially - and even that was very experimental.

Granted, this was a developer-focused hackathon and this is cutting edge technology. Much of the commercial potential in it is yet to be discovered. So I'm being provocative asking this question. Still, I am itching to see more development done with real world objects. Something that we can all look at and think, wow so that's the Internet of Things. I didn't see that from the hackathon and I really wanted to.

The main hackathon event is in Pachube's home city of London, but there are also events in New York City, Tokyo, Zurich, Eindhoven (Netherlands) and Lancaster (U.K.). Pachube is encouraging "developers, designers, makers, mixers, mashers, tinkerers, philosopher-mechanics and sales engineers" worldwide to meet up and tinker with IoT technologies.

I spoke to Pachube founder Usman Haque and asked him what he wants to achieve with the hackathon.

"People have said that the 'Internet of Things' is still a way off," Haque replied, "but enthusiasm about the hackathon shows me that there are already plenty of developers throughout the world making things, building innovative services, applications, mobile apps, sensor devices, interactive experiences... and more things I can't even imagine. That tells me the Internet of Things is already HERE!"

Pachube currently has tens of thousands of real-time data streams, from over 10,000 environments. So hackathon participants can use any of those, or something completely separate. A recent example of real world usage of Pachube feeds was monitoring of radiation data from Japan, after the devastating earthquake.

I'm excited to see what is developed over the 24 hour period by participants of the hackathon. The Internet of Things is a trend that ReadWriteWeb has been actively tracking for the last couple of years. Indeed, Pachube was one of the first IoT companies we profiled and we named it among our Top 10 Internet of Things Products in both 2009 and 2010.

Find out more details about the IoT hackathon on Pachube's website or register for the London event.

It's still very early in this era and the platforms we'll profile here are at this point more about experimentation than commercialization.

HP is building a platform called CeNSE, which stands for "Central Nervous System for the Earth." The goal is to create a worldwide network of sensors, which will create a feedback loop for objects and people. These sensors will measure data such as:

• Vibration
• Tilt
• Rotation
• Navigation
• Sound
• Air flow
• Light
• Temperature
• Biological
• Chemical
• Humidity
• Pressure
• Location

Earlier this year I visited HP Labs and spoke to several of their leading scientists. Parthasarathy Ranganathan, a Distinguished Technologist at HP Labs, told me in May that there will soon be millions of sensors working in real-time, with data sampled every second. He said there'll be lots of different applications for this data; including retail, defense, traffic, seismic, oil, wildlife, weather and climate modeling.

Hewlett Packard is at heart a computer hardware and IT services company. It's building this platform because it sees that the coming data explosion will lead to huge demand for more powerful computers and better processing of all that data. Or, in the words of CeNSE lead Peter Hartwell, "one trillion nanoscale sensors and actuators will need the equivalent of 1000 internets: the next huge demand for computing!" HP also says that producing sensors is "very similar" to producing ink cartridges, which it has a lot of experience in.

IBM

IBM's Smarter Planet campaign is about connecting objects to the Internet and applying intelligence and services on top of that. Like HP, IBM uses the central nervous system analogy. "The planet has grown a central nervous system," it states on the Smarter Planet overview page.

In January of this year, IBM CEO Sam Palmisano gave a speech in London which shed light on Big Blue's sensor platform. He said that IBM had developed 1,200 "smarter solutions" up till that time.

Due to its scale, IBM has the ability to provide sensor systems to support city infrastructures. Palmisano talked about "four cities where IBM has helped deploy congestion management solutions, traffic volume during peak periods has been reduced by up to 18 percent, CO2 emissions from motor vehicles were reduced by up to 14 percent, and public transit use increased by up to 7 percent." He listed other examples from healthcare, banking, power metering and retailing. IBM is also busy working with manufacturers and goods suppliers, such Danish transportation company Container Centralen.

A great introduction to the Internet of Things is this video, which IBM released in March:

Pachube

Of the three platforms for sensor data profiled here, Pachube (pronounced "PATCH-bay") is the most open - no doubt because it is a tiny speck of a company compared to HP and IBM. So Pachube is hoping its open platform will entice external parties to build on it, whereas HP and IBM can rely more on partnerships.

We first reviewed Pachube in May 2009. It lets you tag and share real time sensor data from objects, devices, buildings and environments both physical and virtual. Pachube founder Usman Haque is one of the leading thinkers in the Internet of Things movement. His goal is for Pachube to become a platform that is responsive to and influences your environment - for example your home.

A glimpse of what products may look like built on an Internet of Things platform is the partnership Pachube announced in June this year. It's with Current Cost, a producer of real-time energy monitors. Current Cost is using Pachube's Internet of Things platform for the Bridge, an ethernet device that connects Current Cost electricity monitors to the Internet. Pachube is being used for data management on the Bridge, enabling the device to deliver tracking, notifications, comparison tools and more.

Who is Building the Best Central Nervous System?

HP, IBM and Pachube are all platform companies to watch when it comes to Internet of Things. In upcoming posts, we will look at some products being developed on these platforms.

Let us know in the comments what you think about the three platforms profiled here. Do you think any one of these Internet of Things platforms is poised to be a big winner, or is there another one that we didn't mention which you think has potential?

Pachube founder and CEO Usman Haque called this "a major step in making the 'internet of things for consumers' a reality."

The Move From Experimental to Commercial

One of the most exciting things about covering the Internet of Things, is watching the slow but gradual move from experimental apps to commercial ones. I watched - and blogged - this same evolution in the years before Web 2.0 existed (2002-2004) and it's happening again in 2010 with the Internet of Things. Startups like Pachube are literally inventing the business models as they go.

As we've noted in previous posts, up until now Pachube has been mostly used for experimental applications. However, Current Cost may be its first important commercial case study. The Current Cost Bridge enables users to analyze their energy use via a website dashboard, on iPhones and other smart phones, and via Google's energy service, Google PowerMeter.

Pachube is being used for data management on the Bridge, enabling the device to deliver tracking, notifications, comparison tools and more. The Bridge also has "enterprise level features" such as privacy groups, statistics API, user management and a device provisioning server.

Pachube's New Revenue Models

Pachube now has what it terms a "corporate" service - essentially a third-party service for companies that want to connect devices to the Internet. For example Pachube provides bulk accounts to "web-enable thousands or millions of devices," such as electricity meters. Other services include delivering out-of-the-box tools for consumer-facing companies, building communities around products, and developing branded Web portals for manufacturers.

In addition, Pachube has added premium accounts to its consumer service offering. These include value-added features such as privacy options, statistics and aggregation, greater bandwidth, history and search.

It's great to see Pachube develop its business and we'll continue to track its efforts!

Some of us on the team are proud Android users but most of us are still using iPhones. I just discovered how incredibly effective the Genius recommendations on the phone can be, so I've been going nuts downloading new apps. Here are the ones our staff is most excited about this month.

Here are the ten apps we discovered this month and are most excited about.

• Siri - A semantic smart virtual personal assistant, chosen by Frederic Lardinois. "Siri is one of the most ambitious mobile services we have seen in the last few years. Imagine if you could just talk to you phone and tell it to call you a taxi, reserve a table at your favorite restaurant or tell you what the weather in New York City will be like tomorrow," we wrote in our review.
• OboPay - A mobile payment app, chosen by Dana Oshiro. Lots of big companies are putting millions of dollars behind this startup that they believe could be the future of money transfers on the go.
• Google Voice Mobile Web App - An HTML5 mobile web app for Google Voice, chosen by Richard MacManus. When this app launched at the end of January, we ran a poll asking readers if it was good enough to use as a phone. 65% said it was. A month later, Richard still feels that way.
• iFitness - A mobile fitness app, picked by Richard, who wrote 2 weeks ago: "Described as 'a personal trainer for your iPhone,' the app lists over 260 exercises. It has text and photographic instructions for all of those exercises, with video for 100 of them... iFitness features exercise logging and graphing. In addition it has 12 routines for various goals; including weight loss, strength, golf program, and more. The app also allows you to create your own custom workout."
• Data Logger from Pachube - An "Internet of Things" feed tracker, chosen by Richard. Pachube is an open source platform enabling developers to connect sensor data to the Web. We covered it in depth this Fall.
• iWriteWords - A much celebrated app to help kids learn to write, chosen by RWW's Production Editor Abraham Hyatt.
• Gowalla - A design-centric location based social network, chosen by me, Marshall Kirkpatrick. I wrote about Gowalla in depth yesterday. I love it, I just with there were more people in Portland that were using it.
• Etsy Adict - An awesome 3rd party iPhone app for browsing Etsy listings. I love this app! I regularly spend hours strolling through listings for ceramic and fiber arts items. If you're not familiar with the wildly popular site Etsy, check out this coverage of the company. The app is built on top of a Mashery-powered API and (disclosure) Mashery is a sponsor of ReadWriteWeb.
• SitbyUs - A mobile web app I reviewed last week and am really excited to use. It's a seat-level check-in system for SXSW. It will tell you in which rooms and what sections your Twitter friends are sitting, so you can find them after a panel, etc.
• Guardian iPhone App - This daily news app is the best I've ever seen. It's fantastic. It's like $5 but it's worth it, if only to see how they made it. But it's lots of fun to use too. If you like this kind of thing, see also the CFR (Council on Foreign Relations) app.

Those are our favorite new iPhone apps, what are yours? Stay tuned for next month's selections.

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.

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:

1. Pachube Adds Real-Time Notifications - More Power to The Internet of Things
2. Applications From The Internet of Things - An Analysis of Pachube
3. Business Models of The Internet of Things - An Analysis of Pachube's Open Source Platform

Image credit: centralasian

This is Part 2, where we'll look at what applications we can expect to see in the coming years from Pachube. I spoke at length to Pachube founder Usman Haque to find out what developers - and Haque's company itself - will build on the platform.

For end users, Pachube enables automation of your environment. For example controlling the lighting in your house, via sensors and the Internet. With its new notifications feature, called "triggers," Pachube can cause a specific action in external applications or devices. Such as turning on your living room lights when a sensor (say on your garage door) activates.

Pachube can be difficult to understand at first glance. At heart it is about connecting environments. However it's more than just connecting sensors to the Internet. Pachube wants its users to interact with sensor data and use it to actively engage with their environment.

Experimental Applications

A lot of current Pachube projects are using Arduino, an open-source electronics prototyping platform that we briefly profiled in February. In July we wrote about an example of Pachube and Arduino being used in concert, Web-connected light sensors.

Here's a newer augmented reality demo, showing live Pachube data displayed in real-time 'on top' of Arduino sensor boxes.

We'll explore some more commercial and consumer applications below - most of them in development or on the agenda for the future. Usman Haque admits that currently Pachube is still at an early, experimental stage. Its website is very much focused on developers and prototypers right now.

So what does Pachube offer developers? Usman Haque told us that Pachube's goal "has always been to do the simplest thing we possibly can, so people can get going [connecting their environments]." In a practical sense, Haque explained to us that Pachube is almost like offsite storage for low power processes.

Pachube also wants to reach out to existing popular Web platforms. For example it plans to submit to Apple's iPhone/iPod Touch App Store a "generalized data logger." This will enable developers to tap into sensor data gathered by the device, using Pachube as the backend to hold and manage the data.

Haque added that Pachube's new notification system will make it possible to build more applications; up till now Pachube has been used mostly by developers as a repository (a place to upload data to).

What Commercial Applications Can We Expect in Future?

Although Pachube is currently targeting developers, it has an eye on enabling and creating commercial applications for sensor data.

A big driver currently is energy monitoring. Haque told us that this will be an area with the most innovation in the near future. For example, he said that people could have graphs tracking their long term energy use and comparing it to other people. He noted that this is an "obvious one to build, but nobody has built it yet." You can see from the Pachube website tag cloud below that energy data is a significant part of Pachube already:

Pachube's sister company, Haque Design + Research, will also build use cases for Pachube. They've been doing this already, for example using some Siemens building management products to demonstrate the power of Pachube.

Haque told ReadWriteWeb that Pachube will also be used for large-scale urban infrastructure projects. He referred to this as "massively networked cities," where there is a lot of data collection and sensor stream management. He declined to name specific examples, but said that Pachube is currently "focused quite heavily on East Asia."

Haque noted that Pachube is especially concerned with how to make sure sensor data is accessible to consumers. He said that "people aren't passive consumers of the data, but actively engaged in producing it." The idea being that people will take an active role in understanding their cities. This is an ongoing theory that Usman Haque extols in the talks and interviews he does for Pachube.

Conclusion: Early Days, But Commercial and Consumer Apps Are Coming

Overall, Pachube is "still quite experimental" according to founder Usman Haque. However he said that it will be increasingly used for things like climate data, home automation systems, and more. The company will try to drive usage from both cities, commercial entities (like Siemens) and consumer applications.

In Part 3 of this series tomorrow, we look at Pachube's business model, how it competes with large companies like IBM, and why it's an open platform.

The full 3-Part series on Pachube:

1. Pachube Adds Real-Time Notifications - More Power to The Internet of Things
2. Applications From The Internet of Things - An Analysis of Pachube
3. Business Models of The Internet of Things - An Analysis of Pachube's Open Source Platform

It's fun to look at what is being developed now, because it gives us a glimpse of the Internet of Things of the future. For example a site called The Daily Duino recently experimented with a project involving two light sensors.

Morgellon explained why he did this:

"The idea is to compare inside light levels to outside light levels and adjust for energy consumption. If the light level outside is equal or greater than inside, then perhaps I should open the blinds to let in more light... or maybe even go outside... *gasp*

The two light sensors are connected to an Arduino running the Standard Firmata. The Arduino is connected to a PC running a Processing sketch that sends the sensor data to Pachube."

This is the kind of project that Pachube encourages, as it wants users to interact with sensor data and use it to actively engage with their environment. Morgellon's example is simple, but it illustrates the point: that web-connected sensors help him optimize his living environment. Here he is explaining the set-up, including showing his interactions with Pachube on an Android phone:

Pachube + Arduino from Morgellon on Vimeo.

Below are a couple of graphs generated from the sensor data on Pachube. The higher the number, the less light is present. The aim, according to Morgollon, is that "the Inside Light Sensor will stay a nice high number as I sleep [...] while the Outside Light Sensor should lower over the course of the day."

As the Internet of Things evolves, experiments like this show its potential. Maybe having your household lighting system hooked up to the Web for optimization and interaction is not too far away.