In a smart-system world, data’s ‘the new currency’

We give them human names—Watson, Siri—that suggest how much “like us” they are. Today’s smart systems can intuitively handle tasks that until now have been impossible to automate in real-time. And by mining the resultant sea of real-time data coming in from billions of streams worldwide, analytics science is creating services that have even more value than the smart systems themselves.

IBM’s Watson supercomputer captured the public’s attention earlier this year when it beat human champions at Jeopardy. Siri, the intelligent agent on the Apple iPhone-4s, answers users’ ad hoc questions about almost anything in natural, conversational English, putting a scary-smart system in the pocket of anyone who can afford the phone.

While those systems get the glory, there’s a seething mass of smart systems already at work in virtually every electronics sector: automotive, industrial, communications, computing, transportation, energy, medical and personal health maintenance. In fact, according to the U.S. President’s Council of Advisors on Science and Technology, such “cyber-physical systems” will eventually constitute 50 percent of all electronics worldwide, making them a U.S. strategic asset.

In response, the National Institute of Standards and Technology recently announced a standardization effort to define interfaces for interoperability, as well as metrics and methods for measuring and comparing performance among smart systems. Such efforts set the stage for U.S. entrepreneurs to build successful smart systems from homegrown designs, but to realize those designs with electronics that are  manufactured at low cost overseas (see sidebar, final page).

The stakes are huge. Market watcher International Data Corp. (Framingham, Mass.) recently reported that nearly 2 billion smart systems per year are already being sold, making for a $1 trillion market that IDC predicts will grow to 4 billion units and $2 trillion by 2015.

The most valuable services performed by smart systems, according to IDC, result from the application of analytics to real-time data streams.

“Data is the new currency,” said Mario Morales, vice president of semiconductor research at IDC. “And the companies that understand this are the ones already developing the analytics and infrastructure to extract that value—companies like IBM, HP, Intel, Microsoft, TI, Freescale and Oracle.

“Over the last three years, we have seen a transformation not merely in computing, but also in networking, and even in the way users are interacting with smart devices. Enterprises have yet to figure out exactly how to monetize all this data, but there is a tremendous amount of opportunity there, which is prompting visionaries to make huge investments in the analytics software and services that will couple to their intelligent hardware.”

IDC has been covering embedded computers for over a decade but only recently started delineating “intelligent systems” as the successor to the embedded space. And IDC is not the only market forecaster claiming that smart systems are the future. Applied Business Intelligence Inc. (New York), for one, recently started a “smart cities and grids” research service.