Mastering the Matrix of IoT

More and more, app-loving, device-juggling consumers expect to exchange massive volumes of data in real time. They life-cast on Periscope and stream music and HD movies on Spotify and Netflix, and they refuse to wait a single second for buffering. Someone's got to build the infrastructure to support this surge.

"More than ever, it's important to grow the platform for the Internet of Things, the infrastructure needed to support it," says Caroline Dowling, one of the architects of this platform. As president of Infrastructure for Flex, the Ireland native runs the contract design and manufacturing organization's largest business, which accounts for nearly 40% of its $26 billion in sales. She's among the handful of often unseen people in Silicon Valley who possess a unique perspective of what it takes to support the 4.9 billion connected devices in 2015 and the 25 billion projected by research firm Gartner to be in use by 2020.

The software-defined cloud is one of the most disruptive changes we've seen in 20 years.

"Think about smart homes, connected cars, smart meters, smart agriculture," Dowling says. "The need for more services and bandwidth is accelerating. There will be a 400% increase in traffic in the next five years. Video will grow by 700% in five years. To keep up, we need to increase broadband by five times in five years."

The unit Dowling leads at Flex helps design and manufacture computer and communications equipment for many of the world's top technology companies, including Alcatel-Lucent, Cisco Systems, Ericsson, Huawei, Palo Alto Networks, FireEye, and Hewlett-Packard. These tech companies are in the throes of the most disruptive period in decades, in which trillions of dollars are up for grabs.

"The next five years are really exciting for us and will set the new standards," Dowling says.

Much of the disarray has to do with the state of the cloud.

"Cloud and open-source computing will absolutely change the balance of power," Dowling says.

In the near term, the cloud threatens traditional original equipment manufacturers (OEMs) who might anticipate their hardware getting scrapped for services and storage that are more mobile-friendly and better aligned with new ways of working and consuming data at any time and from anywhere. In reality, the cloud is built on smart, connected hardware, and as a result, major players—among them, Cisco, Nokia, Ericsson, Huawei, and Ciena—have turned to Flex as a partner, she says.

In the mid-to-long term, "you end up with a hybrid model where customers run their own equipment and use the cloud," she adds. "That middle ground of public-private cloud is where there will be immediate growth."

Then, 5 to 10 years out, things get even more interesting. "The industry is going through a paradigm shift, the likes of which we have not seen since the acceleration of the PC back in the 1980s. The big trend we are seeing is a convergence of infrastructure: Servers, storage, and networking are coming together through software in one box," Dowling says. And it's essentially, a white, brandless box, not a proprietary piece of hardware. Customers of the cloud are looking to software to differentiate the experience rather than the hardware it flows through. "The software-defined cloud is one of the most disruptive changes we've seen in 20 years," she says.

The industry is going through a paradigm shift, the likes of which we have not seen since the acceleration of the PC back in the 1980s. The big trend is a convergence of infrastructure.

When high-end computing becomes less about intellectual property and more about commoditization, leaders in electronics manufacturing, design, and engineering will have to develop broad-ranging product portfolios. Product designers and modern innovators need to be able to choose from an array of technologies and mix and match to their liking, Dowling says.

"To that end at Flex, we have launched a fifth business unit, alongside our Communications, Networking, Server and Storage units. Called Ci3 (shorthand for the third platform of converged infrastructure), it provides design, manufacturing, system integration, and service for next-generation infrastructure. Ci3's sole purpose is to address this market shift with solutions from sketch to scale."

For a lot of the companies vying for shares of this connected future, security is the biggest X factor. The number of cyber attacks on U.S. companies has grown. Security defense is becoming more and more critical. In the past 35 years, the whole security of the supply chain become a differentiator. Modern facilities must have measures such as biometric security and retina and fingerprint scans to enter sites. Manufacturers need to track the components they make, as well as the end products, to make sure they travel safely, using tools like scanning and sensors and RFID technology. That is a huge value to companies.