1. The Network Effect:
Open Source and the Internet of
Things
Michael Koster
Scott McNeil
Open Source Internet of Things

2. What is the Network Effect?
• As the number of participants in a network
increase, so do the number of connections
• Each participant adds potential value
• Each connection adds potential value
• The total value potential of the network thus
grows as an exponential function of the number
of participants; Participants x Connections
• This is the Network Effect

3. M2M Creates Value
• Machine to Machine communication (M2M)
creates value by connecting physical resources
to software
• Improved Manageability, Utilization,
Predictive Maintenance
• Conversion of Capital Assets to Managed
Resources

4. Value Yet to be Created
• M2M can be used to create the Network
Effect with connected resources
• As more physical resources are connected to
software, they can potentially be managed as
a single system
• Thus realizing the Network Effect as the
number of potential software management
connections to each resource increases

5. We’re not going in the right direction
• To date, M2M architectures have focused on
Vertical Integration of the sensors,
communication, and software
• Resulting in highly efficient Silos, with
dedicated services, proprietary gateways, and
fragmented interfaces
• Making it difficult, if not impossible, to realize
the Network Effect

6. Today => Vertically Integrated Silos

7. Network Effect: IoT builds on M2M
• Emerging M2M standards will make M2M more
accessible and ubiquitous
• But won’t fully enable the Network Effect
• Broad Interoperability is needed to achieve the
next level
• Creation of exponential value with the Internet of
Things by managing diverse resources together as
single systems

8. Common Data Models and API

9. Open Horizontal Platform
• Focus on Web Scale Interoperability
• Common data models, event model, and REST API,
supporting event-driven modular software running
anywhere in the network
• Enables the Network Effect; diverse resources managed
as larger system
• Disparate domains of manufacturing, automation,
healthcare, transportation, global weather, home
security, all brought together to create huge value
networks

10. Open Source, Open Standards
• Software Integrates vertical market segments
and knowledge domains together
• The Open Horizontal Platform will be used by
everyone
• The platform is no longer a differentiator
• Permissive Open Source creates De Facto
standards that are by nature free of royalty
and license restrictions, usable by everyone

11. Like the Internet and the Web
• The Internet and the WWW infrastructure is composed of
open standards and open source reference
implementations
• Like the Internet, we want to insure fair and open access to
the IoT by everyone
• Like the Internet, we need to build the IoT together as a
community
• Asking for participation from Industry, Research, Standards
bodies, Developers, and Entrepreneurs in a Community
Consortium to build the Open Horizontal Platform for
everyone
• OSIOT.org – The Open Source Internet of Things

12. The Open Horizontal Ecosystem