Thought Leaders in Cloud Computing: Joel Young, Senior VP of Research & Development/Chief Technical Officer of Digi (Part 4)

Sramana Mitra: Putting a wireless chip or a sensor into a device is a commodity business, but it is more of a disintegrated solution with which you differentiate your offer.  Is that correct?

Joel Young: That is correct.  What we always did was looking for ways to create additional value.  When we first had to go wireless, we added wireless.  When people understood wireless, we moved on to the broader cellular.  When people figured out how to do cellular, we added management capabilities.  As we moved up and added value we continued to broaden ourselves.  Now we make hardware – we make a lot of widgets and radios – but our value is to put together the full solution.  It never gets to the discussion about buying a radio from our competitor for five dollars less.  It is a losing battle when you end up in that kind of business.

SM: How much of the cloud connected devices business do you do?

JY: We don’t publicly report that.

SM: Can you give me a range?

JY: We are a $200 million a year company.  About half of our business is related to components and parts that offer the kind of solutions that I have been describing.  That is the best I can give you.

SM: I just wanted to get a sense of the scale this is happening on.  The cases you are providing me with are very interesting, and they give us a perspective into the segment of the population of the businesses that we don’t see very often.  Is there any other area that you would like to cover?

JY: I actually have a question for you.  I know you cover cloud computing overall.  Are you saying the whole notion of the internet of things is coming up in your world or is it mostly still focused on enterprise cloud solutions?

SM: The Internet of things has not come up as much, but it is not just about enterprises.  We see a lot of small businesses [and] SMI related solutions.  I think that industry is being completely revolutionized by the entry of cloud computing.  It has made technology affordable for them.  The internet of things is a very interesting nuance.   Since you are tracking the internet of things, can you talk about the broad trends in that industry?

JY: We are still in the early phases of extensions, particularly in the commercial part.  If you think about the world of seven billion people, you think about how many things are out there.  Today we estimate that only six billion things are connected.  So, six billion things are connected in a world of seven billion people – it is smaller.  But we subscribe to the Ericsson philosophy that has been out there for some years.  It says that by 2020 there will be around 50 billion things connected.  That is a lot.  Over half of that will probably be consumer related.  Today, if you look at the Internet of things, most of the things are consumer related because consumers tend to drive the adoption of new technologies a lot faster.  Ironically, a lot of the money being made on a per unit basis happens in the commercial space.

This segment is part 4 in the series : Thought Leaders in Cloud Computing: Joel Young, Senior VP of Research & Development/Chief Technical Officer of Digi
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