06/07/2013 04:38 pm ET Updated Aug 07, 2013

The Internet of Things in Motion: Interview with Ayla Network's CEO David Friedman

The word "thing" has its roots from the Viking days of yore. In Iceland, the Althing was founded in 930 AD at Thingvellir--the "assembly fields"--the world's oldest parliament. Thingvellir sits at the seismic fault where the Atlantic and European plates are separating in continental drift, making Iceland grow incrementally each year by a few centimeters.

For the new era of mobile devices and sensors--the Internet of Things--things are multiplying faster than Iceland's landmass grows. This year tablet sales will exceed laptop sales for the first time. Add to that dynamic the hyper competitive landscape of smartphones--Apple, Android, Nokia, Blackberry--and the BYOD phenomena gives businesses new challenges for data aggregation and interoperability issues, not to mention IT security. Take it a step further with the blending of social media and enterprise solutions and the data-sensors and device fragmentation mushrooms.

What are web portals, social media sites, enterprises, and end users to do?

The New Fabric of the Cloud
Find a seamless way to be connected without the hassle of having to manage or switch out of multi-software programs to communicate and collaborate.

Is there such a fabric in the cloud?

Ayla Networks believes so. It rolled out its cloud platform with its first major, paying customer in China. The customer is one of China's largest web-mobile portals in SINA.

In the June 5 press release, "SINA Collaborates With Ayla Networks, Brings New Generation of Connected Devices to Chinese Consumers," Ayla announced their unique partnership and opportunity. From the release:

"With more than 500 million registered users worldwide, SINA is the most recognized Internet brand name among Chinese communities globally. SINA's digital media network also includes (web portal) (social networking) and (mobile)."

Ayla Networks and the Internet of Things
Ayla Networks provides a cloud fabric that seamlessly bridges the connectivity of devices and sensors with data intelligence to empower consumers to "spot trends" and for supply chain vendors to see the analytics on such things, as energy consumption.

Ayla has three offerings: Ayla-enabled Connectivity Modules, that ties home appliances to communicate through the Internet, mobile phones, and tablets. Ayla Cloud Services, which manages the devices and connects to third party cloud services, such as weather feeds to the users. Ayla Application Library, which centralizes the "APIs for creating apps to control Ayla-enabled products with a smartphone or tablet in a secure manner."

Combined, Ayla's cloud fabric is an end-to-end platform to connect the numerous and disparate devices.

With engineers that worked on Amazon's Kindle and at Cisco, Ayla's founding team wanted to take the Kindle concept a step further with a new business model to charge one time the original equipment manufacturers (OEM), do it in a user-friendly way with a Software-as-a-Service (SaaS) component, and hyper-connect the devices and appliances with the consumers.

"The Internet of Things (IoT) is not a slow moving locomotive. It's growing and moving much faster. Add Wi-Fi, home building controls, home health care related data feeds, and cloud-embedded wireless, now users will care about their living ecosystem of data and devices being connected," Ayla Networks CEO David Friedman explained in a phone interview.

"IoT will drive down costs to build and use devices. Wi-Fi and cloud connectivity allows device developers to leverage the UI available in smartphones and tablets, and leverages existing networks to enable easy command and control, which drives costs down for controlling LED lights, indoor air quality, motion sensors, while adding new ones. It's the connectivity that people want in terms of flexibility," he said.

Green buildings, however, do add layers of complexity. That can include a hybrid clean energy solution, "grey" pipes to capture and recycle rainwater, and triple-pane windows or green roofs that reduce storm-water runoff, improve carbon sequestrations, while lower the impact of the sun's heat effects on a building, and thus a city.

Interview with Ayla CEO David Friedman
"We originally started out thinking along the lines of micro-controlling the Internet of Things. We needed a platform of constraint. Could we leverage cloud computing, while provide a solution of 'do what you want,' maintain security in the platform, and yet offer a level of flexibility," David Friedman recounted.

"Our plan was to secure great value for the OEMs. We talked to them to see what customers are using, what they are doing. We saw the need for better applications that tied products to consumers better. The feedback on consumer data was a way to make marketing 5 percent more efficient," he said.

"What about the home?" I asked.

"For the home we saw a large market opportunity and a desire for OEMS and end-users to connect multiple devices to a single app, and the need to be able to provide a very efficient, cost effective service to make this happen. Ayla needed to enable simple programmability via smartphones and tablets. We recognized that OEMs might also be able to reduce the size and cost of their devices if they leverage mobile devices as the user interface (UI). We also realized that it would be valuable for OEMs to understand how their devices were being used in the field to be able to more rapidly innovate.

Finally, we understood the critical need to protect user privacy and focus on anonymization of that data. The markets are very big," he explained.

On the consumer end, Ayla achieves low SaaS costs by leveraging Wi-Fi and IP and by controlling the communication link between devices and the cloud. Further cost reductions will come from the data analytics that are fed back to the OEMs.

"Leveraging Wi-Fi has worked for us. If you recall, Wi-Fi modules sold for $25 each back in 2000. Today, that price has dropped to $3. Because of that price reduction there has been a huge installed base, from where people live, work, and socialize," he said. "As technology costs are driven down and marketing is moving on cloud analytics, combined the costs will be lower."

"What does the SINA partnership mean for Ayla?" I asked.

"In speaking to the Sina last year, we discussed the social networking of things. It was just the start. That business model is advertising. Because of the cool experiments with that project we were able to refine our cloud platform."

In endeavoring to eliminate the 'Tower of Babel' interoperability issues in a Windows and Linux dominated world, with mobile devices changing the face of technology, David Friedman and his cofounders saw the need and opportunity to solve the connectivity issues of things. From that insight, Ayla Networks was formed.

From the press release:

"Sina Weibo provides a rich platform of applications through which hundreds of millions of consumers regularly interact, and we are excited about the opportunity to expand this relationship to the Internet of Things," said Gaofei Wang, senior vice-president of SINA and general manager of "We chose Ayla as our partner because their platform offers the flexibility, security, and time to market we were seeking for this first product introduction, and we look forward to working with Ayla on developing new products that will change the way people interact with each other and the world around them."

If Ayla's platform catches on here, it will do more than "change the way people interact with each other," it will connect directly and indirectly the manufacturers with the consumers in new and unique ways. And that could help lower peoples' costs and carbon footprints.