INSIGHT

Everything as a service

The IOT is distruptive. But not for the reasons you think

Pilgrim Beart is best known as the brains behind connected home platform Hive - his startup AlertMe, which originally developed the tech, was sold to British Gas for $100m last year. So, we thought, this global home grown innovator should know exactly how the Internet of Things will disrupt our world. And we weren’t wrong. Here, in the second instalment of a two-part miniseries on the arrival of the IoT, Pilgrim Beart reveals how it will impact our lives.

Continuity with today is a big part of every tomorrow. And the Internet of Things is no exception. The things we have in our homes and offices tomorrow will be fairly similar to those of today. And yes, more of them will be connected.

But that’s not the disruptive rub. The real impact is going to be the continuing trend of ‘Everything as a Service’. Manufacturers and brands that sell physical kit – any type of non-digital product I can touch and hold – will have to transform themselves. And those that survive will become super-high quality service companies.

Lawnmowers as a service

How so? Well, let’s think it through. And, because I like my garden, we’ll take the otherwise random example of lawnmowers.

For decades Flymo and its competitors have produced products that cut my grass efficiently. But right about now they must be wondering when they’re going to connect their latest model to the internet.

Perhaps they’ll give users an app telling them how their mower is functioning, how far it has travelled, the volume of grass it has cut.

Great for me cutting my lawn. But even better for the brand and its revenues. They’ll now have data on how I use my mower, for how long, for which months of the year, and most importantly, the common faults that inevitably develop over time. They can then analyse the global data set to anticipate problems, give me advice on care and how to avoid having lawnmower-related issues. And increase their share of wallet by tailoring services and accessories to me – and every buyer.

Woah! That's a big investment

Given these benefits, it’s reasonable to assume that the first to market will gain a significant competitive advantage. They’ll understand their customers better. And can do more to meet their needs, pushing out their competition whilst improving market share and margins. Others will inevitably rush to catch up.

There is also a profound impact on lawnmower retail, which very quickly becomes a new world of exciting, lucrative opportunities. And it’s all down to that internet connection, turning the way things were done on its head.

So why isn’t my lawnmower connected? Perhaps because it’s a very disruptive idea. Not the connecting something to the internet bit. But the consequences of doing so – there are fundamental implications for the lawnmower industry’s business model.

Once connected, it’s not only about product development, supply chain management, sales and marketing. Now every vendor also has to invest in managing, maintaining and evolving a set of digital services. And that involves big data, analytics, customer accounts and an entire ecosystem of software. Probably including some level of Artificial Intelligence. At a global scale, that’s quite an investment and undertaking. And they have no previous experience of it. Which makes it a classic Big Bet.

Human attention is a finite resource

Different industries will become services at different rates. But as large manufacturers successfully transform in some sectors, the speed and size of the snowball will gather pace.

There’s little doubt in my mind this change is going to happen. So, how will it change our daily lives?

You can be sure that once-popular visions of the future (flying cars and homes kitted out with touch screens, flashing lights and gizmos requiring constant interaction) is the opposite of what awaits. Human attention is a finite resource. So while the number of machines will grow exponentially, our attention and willingness to interact with them will remain the same.

Ten years ago most people only had one connected device – their PC. Nowadays with the rise in tablets, the Virgin Media V6 box, Nest, Hive and so on, the best equipped households might have ten.

 
 

The future is now

With between 25 and 35 per cent growth in connected products a year, in ten more years some homes could have as many as a hundred. Therefore, it’s extremely important that tech can work out what we want and need without claiming our attention. It needs to fit seamlessly into our lives.

It is very early days for IoT. I recently bought an Amazon Echo, a connected, voice-activated home assistant. In some ways it is very disappointing, given the number of things it doesn’t understand. The only things I really find it useful for are setting aide-memoire alarms and weather updates. Clearly Amazon know they have released a very immature product, but by pushing it to market they will be gleaning a torrent of usage data from customers, just as Google and Tesla have done. They can use that to hone and improve what Echo does, which will establish a firm foothold in a burgeoning market.

So right now there are lots of connected devices, but they aren’t necessarily speaking to each other. Things are happening in a very siloed fashion. Eventually we will see machines working well together in a way that hasn’t happened before in the history of mankind. What is most exciting is that thanks to IoT the future is happening now, and our lives are about to change in ways we have yet to imagine.

Pilgrim Beart’s latest project is DevicePilot, a service that manages connected devices at scale.

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