Bsquare’s Ralph C. Derrickson & Matthew Inglis join Ryan Chacon on the IoT For All Podcast to discuss what’s driving change and evolution in the IoT industry. Ralph and Matthew begin by introducing themselves and their company before getting into specific use cases and solutions for their work. They then dig deeper into how IoT technology has evolved and the role of security in IoT solutions. At the end of the podcast, Ryan, Ralph, and Matthew talk look at IoT from the adopter side with a discussion on managing expectations and advice for companies starting their IoT journey.

Ralph joined Bsquare in March 2019 as president, CEO, and board member. Ralph is a highly accomplished business leader with a wide range of experience using technology to create innovative products, services, and business models. Before joining Bsquare, Ralph was president and CEO of Carena, a pioneer in developing virtual health care delivery until its acquisition by Avizia in 2017. Ralph served as SVP of Corporate Development until Avizia’s acquisition by American Well in July 2018. Before Carena, Ralph was managing director of venture investments at Vulcan Capital, where he was actively involved in the investment, growth, and operations of the firm’s technology portfolio companies. Ralph has served for 15 years on the board of Perficient (PRFT), an IT services firm with expertise in e-commerce digital transformation. Ralph has senior leadership experience at Metricom, Starwave Corporation (acquired by Walt Disney), and NeXT Computer (acquired by Apple Computer).

Matthew oversees engineering at Bsquare. Before joining Bsquare, Matthew was Engineering Manager at MPC Data Inc in Redmond, WA. He worked for many years at MPC Data Limited in the UK, most recently as a Principal Software Engineer. Now based in the UK again, he has extensive experience gained over more than 20 years of building software teams and creating embedded software and cloud systems. Matthew has developed systems across many industries and technologies, including manufacturing and industrial, cutting-edge consumer electronics, and automotive. Matthew has a BSc in Computing and Real-Time Computer Systems from the University of Gloucestershire.

Interested in connecting with Ralph and Matthew? Reach out on Linkedin!

About Bsquare

Bsquare’s Connected Device solutions allow the devices themselves to participate intelligently in their security, deployment, and management, enabling our customers to realize the full potential of a connected world. Bsquare has been helping customers with its system software since its founding in 1994. They are a licensed distributor of Microsoft embedded operating system software and have extensive experience building devices and systems using Windows, Linux, Android, and other embedded operating systems. They have built and now operate for our customers IoT networks ranging in size from 50,000 to more than 1 million devices. They serve a global customer base from principal locations in Seattle, WA, and Wiltshire in the United Kingdom.

Key Questions and Topics from this Episode:

(01:18) Introduction to Ralph and Matthew

(04:16) Use cases and solutions of Bsquare

(10:11) How has IoT technology evolved?

(16:13) Role of security in solutions

(19:58) Managing expectations with clients

(23:12) Advice for companies beginning their IoT journey

Transcript:

- [Voice Over] You are listening to the IoT For All Media Network.

- [Ryan] Hello everyone, and welcome to another episode of the IoT For All Podcast. I'm your host, Ryan Chacon. And on today's episode, we have two fantastic guests from Bsquare. The first is Ralph Derrickson, the President and CEO and Matthew Inglis, the Vice President of Engineering. For those of you may not be familiar with Bsquare, they are designing intelligent, secure software to help companies really realize the full potential of a connected world and kind of how that all plays into their business and the business of their customers. So this episode's really interesting. We talk a lot about devices and the part they play in the overall solution when it comes to IoT, the key principles we thinking about for devices, security, we talk about the challenges with devices when it comes to implementing them, picking the right one, you name it kind of thing, and then just other challenges across the industry that we think are important to kind of note. But overall, fantastic episode. Really think you'll get a lot of value out of it. But before we get into that, if any of you out there are looking to enter the fast growing and profitable IoT market, but don't know where to start, check out our sponsor, Leverege. Leverege's IoT solutions development platform, provides everything need to create turnkey IoT products that you can white label and resell under your own brand. To learn more, go to iotchangeseverything.com, that's iotchangeseverything.com. And without further ado, please enjoy this episode of the IoT For All Podcast. Welcome Ralph and Matthew to the IoT for all podcast. Thanks for being here this week.

- [Ralph] Thank you.

- [Matthew] Hey, thanks for having us.

- [Ryan] Yeah, it's great to have both of you. So what I wanted to do to start this off is have you both give a quick introduction about yourself. Talk a little bit about anything background experience that's relevant for our audience. And Matthew, let's kick it off with you.

- [Matthew] Sure, my name's Matthew Inglis. And I lead engineering at Bsquare. I've spent my career helping customers who make and operate devices. There was a time when that was just low level software. That's changed in recent years to be connecting these devices together, right? So it's given me an opportunity to work across lots of different industries and lots of different use cases, which is really, really interesting. I still think my favorite part is where the hardware meets the software. That's really what my main interest is, still.

- [Ryan] Fantastic, and Ralph. If you would give an intro as well, but at the same time, maybe from there, dive in a little bit more about what Bsquare is, the role you all play IoT and stuff like that.

- [Ralph] Yeah, I'd be happy to do that. So, Ryan, thanks for having us on today. Yeah, my background is system software engineering and started my career, had the opportunity to work for some interesting companies, Digital Research, Sun Microsystems, NeXT Computer, and came to Seattle in the early 90s to work on what would be one of the early internet companies. We did something called ESPN Sports Zone and Disney acquired us. Yep, so that was work I did, and that landed me in venture. And so I went into the venture business and was working for Paul Allen. I ran his tech and bIoTech venture portfolio for a number of years before leaving to do another startup company in virtual medicine. So I started one of the first virtual healthcare companies and sold that a few years ago and was recruited to Bsquare where I'm president and CEO. What attracted me to Bsquare and what really sort of gets my juices flowing is, Bsquare's been a company that's built interesting products, devices, helped company build interesting products since it was founded back in the 90s. Started out, as Matthew talked about, really low level software, BSP and device level support. And over time, our role has more from not just putting the system software and operating system software in there, but helping people build and operate IoT systems. So the devices that we were making smart have become the IoT devices that make up many of the devices and systems that operate today. So today, we help companies design, manufacture, deploy and operate products. We provide operating systems software, device hardening services, and we have a set of services for managing and deploying those devices. And we operate some of the largest IoT networks out there for some of our big customers. So it's been an interesting progression and it's an interesting opportunity for us.

- [Ryan] Oh, that's such an interesting kind of story there. That's fascinating. Can you elaborate maybe on that last point about any particular use cases or applications of the devices you've built, and again, you don't have to give away any company names if you're not comfortable, but just the idea here to bring a little bit more full circle to talk about the types of devices that you've built, maybe the applications that are used in as it connects to IoT.

- [Ralph] Yeah, one of my favorite areas is obviously healthcare. I mean, I have a passion for healthcare and using technology to solve problems, create new business models is really what has been my passion area, and what we really do a lot of at Bsquare. The companies that we work with operate in a wide range of industries from healthcare, digital signage, energy management, really across the board. And where we get involved is there is a unique piece of hardware or a unique capability, and that capability is connected. So if you look at the device, let's set that aside 'cause I think what's probably more interesting for your audience and where our business is, is in the deployment and operation of those devices. And we talked about the internet of things. Bsquare was around before there was an Internet of Things. And these devices now, they need to operate and they need to talk to each other. And so, what was before a device is now part of a system. And so, these systems need to well together. The challenge is we live in a world where every new device seems to create more complexity and every new device creates a security risk. And yet, we're relying on these things. So we're in a funny situation where the devices, they're part of the problem, they're part of the solution. So our view is we can make them part of the solution by having the device participate intelligently in its deployment and operation. And so, we've developed a set of principles for our software and our solutions that say that anything you're building needs to operate at the speed of the device. We're trying to catch up to a hack, never gonna happen. So it's gotta operate at the device speeds. It's gotta be on all the time, 'cause security and operations aren't an eight-hour-a-day thing. It's a 24/7-hour-a-day thing. They need to be able to scale both in size and the number of nodes and the amount of connectivity they need to bring from each other systemically, and they need to share that information, so that collective is always working better together. So our view is it's a connected world, all this stuff is connected, and if you're gonna play in that connected world, you better be able to be a good actor in that world. And that's the way we think of it. And a couple of the big use cases, we can talk about a couple of our customers. One that comes to mind is an intelligent retailing example, where we've got a customer who is doing all of the point of sale vending with a device, and that device is intelligent, it interacts with the consumer at the point that they're purchasing something, it needs to know about where it's being operated, it needs to know the event, perhaps, that is happening around it. And so, the marketing information, how it interacts, what products are available, what services are all sure determined at the point that that transaction takes place. There's an example. This company, we operate about 50,000 devices for them where these things are going on. And that's a pretty typical application. We have some in the energy and building management that I'll let Matthew talk about.

- [Matthew] Thank you, Ralph. As Ralph said, we work in the energy and building management industries too. Some of the work we do for a company called Itron is particularly interesting 'cause they make smart meters. Ralph was talking about 50,000 or so. This is millions of devices. So literally millions. So there's a huge scale. And there we help them keep all of those smart meters up to date. So keeping the software updated is really important, an important part of security, but also help them manage the flexibility. So their customers and end users need different things from their smart meters. So if some of them are more interested in responding to the changing network. Others are very interested in using things at the right time to take advantage of energy tariffs and things like that. So we see a lot of innovation coming in and when electricity is used to help relieve the load on grid and things like that. There's a lot of really interesting innovation there. And a UK example of a customer that we work with called Arcus. They look after facilities for people. So, there's a huge supermarket chain, for example. And they look after all of the facilities for this customer. So whenever a tap stops working or an HVAC unit breaks down or whatever, Arcus will come fix it. So one of the things we've been working with them on is kind of gaining remote awareness of what is happening at one of these stores. Previously, when you had a problem reported, you would have to send someone out to diagnose the problem, figure out what the problem was. And then probably send someone else who had the correct parts, maybe a different set of skills to fix it. That kind of remote awareness. And often a diagnosis, you know what is wrong. So you can send the right person out with the right parts and fix it in one go. That concept of preventing truck rolls, it's often referred to as truck rolls, is a key one for us. That's a really good way of improving the efficiency of a service and using less energy.

- [Ryan] Right, that makes a lot of sense and kind of tying onto to what you both were getting at, and Ralph, you kind of introduced these principles that you mentioned. I'm curious how technology, when it relates to IoT and devices in general, how it's evolved over the last number of years to allow those principles that you've come up with to be something that's so important and plausible, something that can actually be done, being always on the security aspects and so forth that you mentioned. How have you kind of seen technology just evolve when it relates to IoT hardware to allow those principles to be the things that really matter the most?

- [Ralph] Yeah, that's a great question. I'll start with that, Ryan, and I'll hand it off to Matthew to get into. Process or speed, capability, energy management, duration of the device, the connectivity of the devices. When we started out, people were building a unique piece of hardware and it wasn't necessarily being connected. Now when people buy a piece of hardware, they expect the software to be kept up to date, new rules, engines, new updates, new capabilities. So, the requirements for connectivity, the requirements for keeping things current are just, we do it with our individual iPhones. We've got Industrial IoT devices that don't have anywhere near the capability of keeping themselves up to date so that, originally, deployed a long time ago and now it needs to operate completely different is a big issue and a big challenge. So that's been a big change. And then the other thing that is driving change is that what do we expect the device to be able to report on itself? It's one thing for it to be up and running, but it has to know that it's up and running. It has to know that it's talking. So its own awareness in the ecosystem in which it's playing create some new demands and for us, for a device to operate in this connected world, as we think of it, that device needs to be secure itself. So as a unit, it needs to be secure. It needs to be able to recover. If the machine fails, it needs to restart or it's breached, it needs to restart in a secure and safe way. And you gotta be able to update it. There's gonna be new information. And the OS needs to be updated. And so, the world that we we're building devices early IoT, now meeting those requirements is creating huge issues and opportunities and challenges. Those are the big areas that we're seeing the changes. And the capability now is not only are they connected, they're mobile. So, it's moving and it's highly connected. So Matthew, you wanna add on that?

- [Matthew] Yeah, no, they're great points. I think the connected and mobile nature is a good one. We're seeing more battery-powered devices as well. Whereas previously, that was tricky. And now we're seeing lower power batteries. And we're seeing lower power devices rather, and more capable batteries. We can make that much more appropriate. And I guess just the security point, I think, is a good one 'cause you have a really quite constrained devices sometimes as well. So you don't have a lot of process of power. You don't have a lot of disc space. And these things have to be up and running for years at a time, really. Often, they have to be running critical service. They have to keep running, right? I think the security of it, really, interesting part as well. And you were saying, Ralph, about the individual level and the system level, we kind of have to think of it at both levels, really. And in security, in particular, it's an interesting time at the moment because there's lots of activity in the sort of regulatory and standards side of things. And that sounds quite dull and quite dry, but it's actually driving quite a lot of change, I think, since we're seeing a general movement of good practice standards to become law, right? These things are gradually becoming legal requirements. So there's a European standard, Etsy standard, that's adopted throughout a lot of Europe and wider. That's currently making its way through the UK hazard of parliament and it's just becoming UK law. So three has 13 provisions, cybersecurity provisions. And these are fairly basic things like don't have default passwords is one of them. Three of those 13 are becoming law in the UK right now. If that goes through, which it looks set to, then they have three things. Default password is one of them. Just look at my notes. The other one is... the other two are implement a means to manage vulnerability. So that kind of coordinated vulnerability disclosure. That's a big part of handling these inevitable security problems in a coordinated way. So a kind of businesslike way rather than a security researcher finding one and then just releasing it as a zero day thing without any ability to come up with it. If a company has a public vulnerability disclosure procedure, there's a way for them to officially do that and they can coordinate on how that works. But most commercial IoT companies don't have that yet. So the vast majority don't have that. And the last one, which is an area that we get into quite often is to keep software updated as well. Again, it's simple stuff, right, but it's no longer appropriate even if it ever was to release a device and not update it. You can't just lock it down and hopeful for the best. It's gotta be updated. So those kind of three simple things are coming to law in this large fines for companies that don't do that.

- [Ryan] So let me ask on the topic of security and just general challenges I think companies face when they're dealing with and implementing the devices from an IoT solution, obviously on the security front, oftentimes security is sadly an afterthought, which brings in lots of problems, especially when they start to scale. But aside from just that piece, what other challenges have you all seen on the device side of the equation for IoT that have been some of the biggest challenges, probably recently, and maybe that we still face now, and how do we kind of overcome that?

- [Ralph] Matthew, you wanna start and then I'll--

- [Matthew] Sure, yeah. I'll go for it. I think we'll both chip in. There's probably several points that we could both add to this. I think connectivity is often still a problem. Some of these things are designed in environments where the connectivity all the time. And when they're used in rural areas, there is intermittent connectivity. Then that can be a big problem, especially if the device is not designed to cope with that. It can actually, I don't wanna keep dragging security into it, but that can actually be a security issue as well if a device doesn't cope with that connectivity, then it can be a problem. If you imagine you've got an electronic door lock, an IoT lock, if it doesn't cope without having connectivity, that's a terrible design, right? It can be safety implications of that. And so, some devices can actually not handle the intimate connectivity very well. And that's something needs to be kind of built in right from the start too. How about Ralph, do you wanna have a go?

- [Matthew] Yeah, the other thing, Ryan, that we see is heterogeneity. A lot of the systems now, one device might be running Windows, IoT, the next one might be running Linux, the next one might be running Android and they're all working to together and connected. So the heterogeneity of the environment is a much bigger challenge than it ever was before. So that really hurts us. The device maker. So we really think of our customer as the device maker, the person who's building the device. They design it, they manufacture it, they deploy and operate it. Now, when we say they manufacture it, there's a lot of companies out there that actually build the device to a spec. So we're thinking of the person whose brand is at risk, and their brand is now at risk for a hack. If somebody breaks in through the HVAC system, into the system to get credit card information, that reputation damage falls back to a device maker who never really thought of that. So your question is really, your question is really right on point. Security was an afterthought. Oh, just as long as it doesn't do anything, where now it's the primary brand risk if you're the entry point for this. And so, helping the manufacturers and the device-makers understand that. And the other thing is it challenges the way they think of the product that they sold. And some of our customers are getting very sophisticated about this. They're thinking look, I'm no longer selling a product. I'm delivering a capability, and that capability is consumed every day because in order to do that right, I have on ongoing costs with data and connectivity that need to be part of that. So you're really seeing people struggling from, hey, I gotta have security. I gotta have all of this connectivity and updateability, but my business model was I got paid once for this gizmo. And now I gotta provide all this other thing. So it is both challenging technically and it is challenging from a business model.

- [Ryan] Do you all run into when you're talking with customers about building something with them, they come to you potentially with a problem and looking for you to help solve, do you ever run into any kind of friction when it comes to what they're asking for and they think is capable, what'd you all really know is capable to be able to be built in the expectations? And how do you go about kind of managing those expectations in those conversations?

- [Ralph] Yeah, well, it varies with the organization and it varies with roles within the organization. Like me, CEOs, executives, we tend to have irrational exuberance or think something is possible that may not be possible. So, but setting that aside for a second, but from the technology. The building blocks of technology are amazing. You can get a motherboard, you can get all kinds of video capabilities, your ability to assemble things today and to get things up and running through some kind of proof of concept is really pretty incredible. What we run into challenges is where people's like, yeah, you could do all of this. Okay, how do you make money doing that? And how does that advantage you? 'Cause you can have every horn, bell and whistle, but if there's no way to monetize that, so really helping them understand what is the business model for this, the revenue model and the cost structure, and making sure that those align, both align at the moment you manufacture it. Bill of material, but then the ongoing operating cost of it. And so, helping people understand the ownership costs and ongoing costs, that's where we run into friction. Matthew, you wanna add to that? I mean, you're usually on that leading edge more than I am.

- [Matthew] Yeah, no, that's a great point. I think the business, the ROI, the return of investment is a really good point actually. And we try and sort of lead with that because it's easy to fall in the trap of, and particularly in the early days of IoT, this happened quite a bit of you could do something, it would be really cool. And it works and you do that thing, but it doesn't save you any money or make anyone's life any better or you connect some things together 'cause you can, and that's great, but it doesn't deliver much value. So that's definitely a thing. I guess the other area that we, sort of more technical area that we run into fairly often is there's a desire. And a lot of our customers, the end point they wanna get to is sort of predictive maintenance and things like that, so you are on site and you fixed something before someone even knows it was a problem 'cause you've predicted that was gonna happen. And you can totally get there, but you often need a ton of data to get to that point, right? You need a really large amount of data of things working just fine and things slowly going wrong. And because things don't go wrong very often, it takes a while to gather all that data. So there's often a big kind of data gathering exercise to be able to get to that predictive point. So you might kind of bridge that gap by having some heuristics or some kind of rules that would that would kick in. And have a rules-based system before you get to the machine learning model.

- [Ryan] Makes sense, absolutely. So one thing I wanted to ask before we wrap up here is when people are listening to this and kind of digesting all this knowledge and understanding of the space and the challenges and things like that, what advice do you have for them as they're getting started down their learning how potentially IoT is going to be able to be implemented into their business or the business or their customers. Before they even reach out, what should they be thinking about and how do you think they should be approaching that to avoid common pitfalls and any challenges that we kind of discussed here? Anything kind of just high level you would recommend to the audience to really be thinking about?

- [Matthew] Yeah, I'll start with a couple things. I'm gonna ask Matthew to add. First and foremost, what is the critical capability that they're trying to provide because too often people get distracted by things they could do, but let's start with the most essential what is necessary. So start from that, most necessary and then work forward. And don't think just about the cost of manufacturing the device, think about the cost of operating that device and think about your customer's experience. So our device-maker customer needs to be thinking about their customers' post acquisition experience because that's where they need to be thinking. So you need to shift that thinking. And then the other thing is be prepared for these things to be deployed for a very long period of time. One of the biggest things that we found is that people say, well, we deploy these we didn't expect they be operating 15, 20 years later, and they still are. And so the lifetime duration of those things has created some really interesting business opportunities, but also challenges for the customer. So those are a couple things that really are, you need to think about. Matthew, you wanna add to that?

- [Matthew] Yeah, that's a really good point, actually. And I guess sort of slightly to add to that. A bit is think about the life cycle of the devices as well, really, 'cause you'd think about the normal use of them and think this is just great. I can imagine this thing being used. But then like how is it gonna get deployed? And how is it gonna get out there? And what if it goes wrong? Or like what if it gets stolen or what if you wanna return it and make it do something else and how is all that stuff gonna work as well. It's good to think of all of that side of it as well. It's obviously pretty involved.

- [Ryan] Definitely, yeah. It's always interesting when I talk to people that are new to IoT and how they're approaching it. And a lot of times, they're not as prepared as they probably should be going into a conversation with a potential company, but I think they kinda lean a lot on the individual company to kind of help guide them. But at the same time, I think there's enough information or resources out there to help set them up for success earlier on in the stages of development. So all these points are very well taken. Last thing I wanted ask you all. As our audience is listening, I'm sure they're coming up with questions. They wanna learn more. Kind of dive more into to what's going on over at Bsquare. What's the best way to do that? What's the best way to stay in the loop of things happening, follow up and so forth?

- [Ralph] Well, we try and keep the website, obviously, up to date. Bsquare.com is a great place to land. There's a resource link there where we're trying to post things that are