In the age of the Internet of Things, all products are software products

Esko Kilpi, the principal of Esko Kilpi Ltd, a leading research and consultancy firm focusing on the art of interaction, science of social complexity and the design of digital work, writes about how the value of a product is changing in the age of the Internet of Things:

“In the age of the Internet of Things, all products are software products. The value of the code, computing power and connectivity, may determine the value potential of a product more than the physical product itself. The effectiveness of an offering is related to how well it packages the learning from past activities, other use cases and from other similar products and how it increases the users options for value creation through network connections in the present. The offering actuates data via algorithmic smartness and through live presence (in the Internet). Connectivity also enables some functions of the product to exist outside the physical product in the product system, the cloud.”