Apple, Google and the State of the Enterprise Beacon Market

In the first year after its release there was a narrative around Apple iBeacon that public deployments weren’t progressing at lightning speed like some people were expecting when the framework launched. After all, Apple is famous for beautiful devices with perfect rounded corners that immediately bring magic to our lives, right?

During that first year it became apparent that iBeacon was a framework – not a shiny device – and that a lot of work was left to the developer. Announced “deployments” fell victim to PR-inflated yet still unfulfilled hype. This same hype trough happens with every new platform. Bitcoin finds itself in a similar phase today. It didn’t help that marketers ran case studies extoling the virtues of coupons for free sausage when you were in the grocery aisle. I’d argue no one wants a coupon for sausage pushed to their phone – particularly when it’s in only one store on one aisle for one month, with no real consumer value and no at-scale app penetration.

During that trough of disillusionment, it was easy to lose track of what it meant to develop modern contextual experiences in mobile. In the picture above, we’ve depicted the developer journey for creating e-commerce enabled contextual mobile apps. This developer journey is the same for big companies and small alike. Since iBeacon is a developer framework, Estimote embraced the initial go-to-market for small developers who would take risks—cute colorful beacons helped embody our brand, but the real goal was building a community of developers to help us iterate on new tools and software and optimize for all phases of go-to-market and deployment.

As we watched the beacon market mature, we stayed grounded in the user experience always asking: what is the consumer value? Meanwhile, the dominant mobile platforms began to reveal new front end experiences, giving us advanced ways of interacting with our physical environment, such as Apple Proactive Assistant and Google Now.

There are reasons that the user experience in mobile is evolving faster than in past platforms. We are amidst a developer renaissance that did not occur in PCs which has created a sort of revolution – indeed the smartphone is the new sun – accelerating innovation at break neck pace, as abundant supply chains create new device categories and new developer frameworks from Apple and Google proliferate magnitudes faster than in platforms past.

It’s now mid-2015 , almost 2 years since iBeacon was launched and the world’s four biggest mobile companies (and four biggest platforms!) – Apple, Google, Facebook and Tencent (WeChat) – have now publicly embraced and built experiences around Bluetooth beacons. Rarely does a new technology get adopted uniformly like this by large incumbents without cross collaboration.

Moreover, the entire beacon stack is now enterprise ready. The world’s most sophisticated companies, like Target, are now launching incredible consumer experiences and massive rollouts.

As the industry really catches fire, we wanted to share what Estimote has learned from working with the most innovative enterprises in relation to helping developers navigate the journey depicted above:

1.2.3.4.5.

  **Beacons Need to be Software Defined**: Software-defined networking (SDN) is an approach to computer networking that allows network administrators to manage network services through abstraction of lower-level functionality. Beacons, at their core, should be software defined and agnostic to the services and lower level protocols they run. What this means in practice is that beacons need to be defined via software, at a point later in time than deployment. This seems blindingly obvious but technically is extremely difficult to implement and usually a deferred concern until right before the decision to go to scale – no enterprise should install beacons unless they can be recalibrated in seconds inside a live store and are field updatable.
`</pre><pre>`  **Resilient and Serviceable Infra Isn’t Commodity**: Enterprises need infrastructure that is resilient and lasts forever in a bunch of different dimensions. Power is the base dimension. But are we confident that something won’t be obsolete 12 months or 24 months from now in a different dimension? No. If new protocols or patches need to be pushed to the network, the network should absorb them. This is software defined networking, and it’s why commodity is the wrong term for beacons. Commodity does not imply assembled from commodity components, it implies interchangeable and indistinguishable. When you’re shipping 100,000 beacons to an enterprise customer who spends thousands of man-hours installing them, beacons are anything but interchangeable.
`</pre><pre>`  **A Customer-Centric Approach Leads to an Agile Platform**: Replicating bugs and fixing issues is dependent on having customers. This may seem like a rhetorical statement. But keep in mind beacons are a new platform and a lot was missing in iBeacon which is necessary to deploy at scale. How do you get bug reports if you don’t have any deployments or customers? Throughout the 2 year period since iBeacon was launched, Estimote has been focused on going up-channel though the developer market to enterprise. This has given us over 50,000 paying customers around the world and has enabled us to do agile development at the platform level, effectively empowering our customers to help us spec new services… services that are necessary for enterprise deployments and are missing in iBeacon. These include indoor location as-a-service, secure infrastructure, infrastructure sharing, and elegant management of tens or hundreds of thousands of beacons from a remote location.
`</pre><pre>`  **Enterprises Platforms Need to Support Apple and Google**: When we talk about iBeacon leading up to its two year anniversary, as advanced enterprise deployments emerge, Android deployments are still largely absent in conversations today. That’s because during the 2 years that PMs and developers have been planning, piloting and building iBeacon deployments, Google had a non-existent voice. Of course that all changed recently. But the launch of Eddystone, and its tighter integration with Android, will take time to catch up – Android simply lags vs iOS in modern app development. But the real question is when it’s ready, will your deployed beacons work with Eddystone, or more importantly whatever new framework might be coming next? The answer is no unless the firmware is updateable over the air in the background, without truck rolls or auxiliary hardware. Every beacon we’ve ever shipped can be updated via our SDK to support the latest firmware—including things coming that have not been announced. You simply can’t throw up a bunch of dumb hardware on the wall and get the same result that enterprises like Target want to achieve.
`</pre><pre>`  **A Modular Approach to Beacons and Omnichannel is key**: We've been talking for a while about how we prefer a modular approach to beacons. Our engineers have focused on creating a web services model centered around easily consumable toolkits of developer facing SDKs and APIs. We believe it should be really easy to layer a content management solution (CMS) from a preferred vendor and then tie it back to end-customer data through a native CRM. The old way of melding e-commerce, server and POS store data was brittle. We love working with companies who power new experiences for enterprise customers—our array of solution partners increasingly prefer Estimote precisely because we've exposed web services via elegant APIs and we iterate and ship quickly as the space evolves. In this way we're a little like Stripe, who is trusted and loved as an e-commerce platform because they greatly simplify the steps it takes to accept payments. We sometimes think of Estimote as the ‘Stripe for iBeacon'.

As we reflect on the stack we’re building, we’re blown away that in less than 2 years since iBeacon was launched, the world’s most admired brands are announcing massive deployments. It is truly a phenomenal testament to how permissionless innovation in mobile has compressed innovation cycles—we’re now seeing both the developer community and large enterprises adopt completely new mobile technologies faster than any time in history. This trend is buoyed by new fundamentals in the mobile value chain as well as system wide network effects. We are amidst the biggest secular bull phase for contextual and payment technologies we’ve ever seen.

At Estimote, we love embracing hard technical challenges and aspire for the world to be a brighter, smarter more connected place. And since application layer context is broadly speaking a new physical layer, we’re expecting developers to build amazing new contextualized experiences that completely change how we go about our lives. And if we can be part of the conversation as this next exciting phase unfolds, please don’t hesitate to reach out.

Steve Cheney, Co-Founder, Estimote

  1. coxy00045 reblogged this from estimote
  2. estimote posted this