From Postage Meters to the Internet of Things

On Monday, June 2nd, print and mail industry pioneer Pitney Bowes put their stamp of approval on the Industrial Internet Consortium, joining founding members AT&T, Cisco, GE, IBM and Intel in helping with the integration of the physical and digital business worlds. The two-month-old Consortium so far includes forty-five total members.

Long known for their nearly-ubiquitous postage meter, Pitney Bowes has diversified broadly in mail and print, and now has a number of Cloud solutions. Joining the IIC will provide the company with best practices, reference architectures, and standards requirements, as well as forums for the exchange of innovative solutions.

Three initial examples of Pitney Bowes’ Industrial Internet initiatives include:

  1. Leveraging data from their business equipment to help clients drive greater operational productivity and increase marketing precision
  2. Providing analytics and accounting to SMB postage meter clients
  3. Providing tracking and analytics in support of ecommerce and shipping customers.

Saugatuck has provided consulting services to Pitney Bowes in the past, and while many may see the hundred-and-twelve year old company as a dinosaur unable to move into the era of Digital Business, we know otherwise from first-hand experience. Consider that since August 2012, Pitney Bowes has been partnering with eBay to help with assessing costs, handling customs issues, providing insurance, and assuring delivery to eBay buyers and sellers. Moreover, since last year, Pitney Bowes has provided its location intelligence technology to Facebook and Twitter in support of location services in posts and tweets.

While it is all too easy to make fun of smart refrigerators or automobiles as rolling data centers, it is clear that the Internet of Things will bring together the physical and digital worlds for personal health, transportation and mobility, homes, commercial buildings and infrastructure, cities and industries worldwide. Between now and 2020, connected devices will grow from at least 2 billion to nearly 10 billion, excluding mobile phones. The business impact is, of course, impossible to estimate realistically, but it can be expected to grow from less than $200 billion today to well over $1 trillion.

Last year, the share of revenue from digital solutions at Pitney Bowes was approximately 20 percent, but over the next five years, Pitney Bowes CEO Marc Lautenbach thinks digital revenue can reach 30 to 35 percent. The world of sensors and big data delivered over high-speed networks may seem quite remote from the home-office postage meter. Yet in many ways Pitney Bowes is a model for the transformation of “Business As Usual” into Digital Business. Ongoing Saugatuck subscription research clients may want to take a look at a recently published Strategic Perspective (“What is a Digital Business Anyway?”, 1372STR) where we lay out four stages of Digital Business Transformation, or view this Lens 360 blog post that summarizes some of the key findings.

For any firm to take advantage of becoming a Digital Business – whether a large enterprise traditionally on the buy side of technology, a software ISV in transition, or a pure-play Cloud solution provider – this challenge is significant: how to implement a platform to support a Digital Business model and then keep pace with the ongoing pace of change.

We will soon publish a Saugatuck Strategic Research Report titled An Evolving Platform for Digital Business: Big Data, dPaaS and DevOps, which will pull together and present the insights, conclusions and best practices that we have uncovered through our research. And  the Saugatuck 2014 Cloud Business Summit will be held at The Yale Club of NYC on Wednesday, November 12, 2014, where we will explore in depth this transformational change.

2 thoughts on “From Postage Meters to the Internet of Things

  1. Great post Mike. Since the term was introduced, I’ve always felt that transformative opportunity of the Internet of Things was going to be more about how we come to use the objects that we just take for granted – the toothbrush, the home thermostat, the T-shirt, the postage meter – differently. And because of that I think the 2020 projections you cite here are low. Just sayin’…

    1. Mark, if there is anything I have learned by the still ongoing penetration and evolution of Cloud capabilities, its that these are long gradual sigmoid curves. There are startups with no installed base to worry about on the sell side, and incumbent vendors with long tails and significant legacy portfolios still generating revenues. On the buy side, the earliest adopters have already lapped some of the laggards and are implementing next generation Cloud capabilities that have leapfrogged their original investments. That is why I chose to show the year 2020 in three contexts: Hybrid, Holistic and Transformed.
      Please consider that where you work and your client base may not represent the median situation and, yes, there are many moving fast in some verticals, but in others, not so fast. Consider heavy industry and utility companies as examples of those either encumbered by regulation or less threatened competitively than companies in media, software and services, for example. In trying to outline the big picture, I wanted to emphasize that this is a long and profound set of evolutionary changes that will result, when all is said and done, in a very different world than we know today.

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