Russ: Hi, I’m Russ Capper and this is BusinessMakers USA, brought to you by Insperity, inspiring business performance. We’re in Indianapolis, Indiana today, and I’m very pleased to have as my guest, the Founder and CEO of ClearObject, John McDonald. John, welcome to the show.

John: Great to be here today, thanks.

Russ: You bet. Tell us about ClearObject.

John: We got started in 2010 in Cloud managed services, but the particular thing that we did at the time and still do is what’s commonly called embedded software, or software that’s part of the hardware itself. It can be updated or changed but you kind of get it with the box. Those companies are still with us, and over the years have evolved to wanting to get data from those same products, and do something with it, and understand what it is. Now, a huge amount of our business is helping those companies get at what kind of projects they want to do to wrap digital products around those physical products. They now call that the Internet of Things, but it wasn’t called that when we got started in 2010.

Russ: Nomenclature does change. In fact, your embedded software, that’s almost what we called firmware, too, right?

John: Yes, it is. It’s definitely called firmware, an older term. That’s stuff that you don’t buy it and install it on a PC, it sort of comes with it already. It’s now a huge differentiator between any one product and another. One of our customers is into car radios, that’s what they make. When you and I got our first cars, this was a silver box with two knobs on it. Now, this thing can have ten, fifteen, twenty thousand lines of software code in it and it’s the major differentiator between one company’s product and another is the software that’s inside it. It’s mightily important to not only that product in the marketplace but also in the data that’s coming from it and what happens to that data after you get it.

Russ: You’ve already alluded to this but I’m assuming your embedded software customers were perfect clients and prospects for Internet of Things.

John: They are in the conceptual level, but what’s interesting is a lot of the people that are dealing with the embedded software engineers, while at the same time, the people that are trying to envision new data driven services are really more product designers and product managers. Even inside those companies they can be different groups of people, and getting them to talk is troublesome for us sometimes to bring those elements together. When we do, we get great success.

Russ: In fact, I’ve kind of been paying attention to Internet of Things and sort of being a marketeer by profession from way back. I’m saying, how do you make a call to get somebody you know? How does that work?

John: There are these people inside of companies, we like to call them intrapreneurs; they’re change agents. They’re people that see what’s happening to the world around them and they compare it to what’s happening inside their own organization and they are not amused. In fact, some of them are panicked, they are desperate, in many ways. Sometimes they’ve tried and failed to get a digital product built around their physical product. As odd as it sounds, one of the more reliable ways we have found to find these people is to go to trade shows. Not IoT trade shows, their trade show in thir industry, and to speak about the Internet of Things. They don’t respond to normal marketing tactics, but they do go to trade shows, mostly to spy on their competitors to see if anybody else sees this. When we speak about IoT, oftentimes they will come up to the stage like a baptism at the end of the revival and say, ‘Here’s my business card. We need to talk.’ And that’s them. I’d love to find more efficient ways to do this, but it definitely works.

Russ: Share with us a couple of success stories.

John: I’ll give you a couple, and kind of ranging the gamut here. One of our customers is a company called Cummins Engine. They’re also here in Indiana, they make diesel engines. These engines are very finicky when it comes to..mostly emissions standards. They can become out of whack very easily.  When they do, they’ll start throwing off error messages, or they call them fault codes. The truck driver doesn’t really know what these mean and the fleet operator doesn’t either, but Cummins does. What they do is they collect these things live and send messages back to the fleet operator saying this is what’s going wrong with your truck and here is what you should do about it. They can even pre-roll parts to their internal Cummins care system, is what they call it, to intercept the truck and get it back on the road faster. What’s curious about that is they are winning business, as you would expect, on that capability alone. Just a few year ago the way they would win business is based on traditional measurements like torque, and reliability. Now the data is becoming the differentiator between their product and the other ones in the marketplace.

Russ: Ok, so I’ve got a question about that. As ClearObject, certainly they sort of said, here’s our problem. You created the software, but are you also in the business of sensing devices?

John: It’s always the case that four elements have to work together to succeed in an IoT project. The first one, which is often overlooked, is design. I would call it ideation. You have to start with what data, to whom, and for what purpose, right? Then, you use that as a guide to work on two domains. One of them is more hardware oriented, they call it edge, in our business, so that’s sensors and networks and security. The other one is just software, software that goes in the device or around the device. The fourth component is a Cloud infrastructure. When we started our careers, you know, you had to buy all the hardware and software and could spend millions of dollars and months implementing it. Now you can get it with a credit card in fifteen minutes. The data and the software always lands on a Cloud infrastructure like IBM, or Google, and the rest.

John: So, these four elements: ideation, edge, development, and cloud are always the case. When companies fail, they try to weave these things together themselves. They try to do it internally with resources that are not really designed to work with each other, frequently overlooking design, which is the most important part of it. So, what we discovered in working with them, fairly early on, is that they were struggling with these things. What we did was build a team that basically did that. We consult with them and weave those things together like an IoT systems integrator, but with the point of running it. Our business is really a Software as a Service company and the software as a service is their software as a service.

Russ: So, you’re touching on all four of those categories and managing it.

John: Right.

Russ: You said you had two good examples. What was the other one?

John: Another one is very much in line with this. There’s a company here in Indiana called Sutton-Garten, and they are a gas distributor, think industrial gases like for welding or CO2 for a restaurant. This is a fairly traditional industry. They’re servicing their customers by loading up trucks with cans of gas and running a route based on hunches as to who might need that today. They work to develop, essentially, a meter that goes on the bottom of the gas can that kind of weighs it so they know how much is left. That connects to the Wi-Fi network inside of the business. Now, what they did was hired us to build a way to collect all that data and display it for them on a map, so they can literally see, like a gas gauge, their entire route. Now we’re working on some cognitive ideas with them to be able to plan route planning, so they can reduce the amount of fuel that they’re spending to be able to restore all the cans of fuel that they’re servicing. You can see very easily how if they got very good at this they would be able to win business from other neighboring territories and other customers, or other companies, because they were able to deliver the gas more efficiently, at less cost, and also on time just by adding data on the can.

Russ: Your examples, and probably the other examples I can imagine based on your description, fall in this category that I would call industrial IoT, is that right?

John: Yes, that’s correct. Industrial IoT applications are primarily in the areas of manufacturing, transportation logistics, and agriculture. Or, as we like to say, making things, moving things, and growing things. That is most of our businesses in those spaces. They are much further ahead than consumer IoT applications, and one of the main reasons for that is we haven’t figured out a good way to give you control over your own data stream in your life, and franchise you and the value that’s created from it. We sort of steal the data from you. The firs thing you do when you find an app that’s tracking your location is you go shut that off or you delete the app, right? Because, you’re not being empowered to control that data stream and we’re not giving you a check for the value that it’s created. In the industrial setting you don’t have those problems. We own all the data, let’s go. So, it moves it a lot faster forward because you don’t have to deal with those problems.

Russ: IoT in Indianapolis. You give us several great examples. Is it sort of really a happening space here?

John: If you think about the comment earlier about making things, moving things, and growing things, where are those companies at? They’re here in Indiana. Our entire economy is based on this. We’re the number one state in all of America for the percentage of our GDP that comes from manufacturing as well as the number of our people that are employed in manufacturing. As a result, agriculture and transportation does things similarly. This is true also of the Midwest. And so, there’s more reasons why the Midwest should be the leader in IoT than reasons why it shouldn’t. The only interesting difference with that statement is that you don’t traditionally think of this as a technology hotbed, but it is. Particularly, as you see that this data coming from the devices that consumers are using is sort of the new form of marketing, if you look at what’s hot on the technology scene in Indianapolis, it’s IoT and marketing technology. That’s not an accident, right? That’s a result of those skills being here, traditionally, and in some cases for hundreds of years.

Russ: Do you look at the company in the future? Where would you like to be five years from now?

John: I think that we are at the very beginning of a wave that is really transforming the baseline of how our economy works. It has been based on farming, manufacturing, transportation. Now it’s being increasingly based on data. Although the Internet of Things, people have a different set of opinions in relation to those words, some people that scares and in other people that empowers. The truth is, it’s really a fundamental shift in our economy towards data. I think we don’t have to be the biggest there, we just have to be there, right? And I think we’re there. I think we’re at the beginning of something really, really awesome.

Russ: Well, John I really appreciate it. You’re a great explainer of IoT.

John: Thanks, that’s very nice of you to say. I really appreciate this today.

Russ: You bet. And that wraps up my discussion with John McDonald, founder and CEO of ClearObject. And this is BusinessMakers USA.