The second fundamental change impacting third-wave product design is a new architecture. Given the ingredients of cloud technology, ubiquitous connectivity and sensing, a device-to-cloud architecture would seem right. Just capture the sensor data, upload to the cloud, and analyze. However, a device-to-cloud architecture (often called a cloud-oriented architecture) is the exception today, not the norm.

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Computers used to look like computers. Of course, we saw an evolution of form factors from large mainframes to portable mobile devices, but this was a measured evolution with user interface paradigms anchored around screens and manual input methods (e.g. keyboard, touch, voice). If we transported a DEC VT100 terminal user from 1978 to the present day, they might be surprised by the vivid color and graphics of a laptop or touch screen computer, but they would instantly understand how to interact with it.

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The Economist describes the current state of the Internet of Things (IoT) as a “quiet revolution” that is impacting both product and service firms across all sectors of the economy. Their 2013 survey found that 75% of companies were exploring uses and applications leveraging the IoT.

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With the most conservative revenue estimate of the connected car market at 75 – 80 billion dollars in 2020, automakers’ IT and engineering departments are feeling a huge strain today to build out necessary capabilities in an efficient and scalable manner.

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