Everyone is waiting for the Internet of Things. The funny thing is, it is already here. Contrary to expectation, though, it isn’t just a bunch of devices that have a chip and an internet connection.
Uber and SolarCity are interesting examples. Both rely on making their assets smart and connected. In Uber’s case, that is a smartphone in the hands of a driver for hire. For SolarCity, the company’s original business model was selling electricity directly to homeowners rather than solar panels, which requires knowing how much electricity a home’s solar panels are producing.
Connectivity, the defining feature of the Internet of Things, turns out to be relatively easy to include in devices, say the engineers who work on it. “The bar is pretty low to put a chip in something and make it connected,” says Icontrol’s Ms. McLaren.
Understanding that most people want to solve problems without worrying about the underlying technology was crucial, she says. “Early on, we found that if you called what we do ‘home automation,’ people liked it but they would not spend money on it,” Ms. McLaren says. “But if you called it ‘peace of mind’ and anchored it on home security, then people knew they need to have that and would spend $35 to $45 a month on it.”
When internet-connected devices are considered a service, consumers don’t have to worry about integrating gadgets. Focusing on services also helps vendors clarify their offerings.
Artificial intelligence can help predict when devices need to be fixed or upgraded. Since vendors generate revenue from subscriptions, they are motivated to make those repairs and upgrades.
Some techies call this “hardware as a service,” a play on “software as a service.” It works similarly. In the case of Brita, the service is filtered water. For alarm maker ADT, it is security; for ride-sharing companies, it is transportation.
Many of the systems already used for tracking health, homes and pets could help a growing population of elderly lead more independent lives.
Shifting from describing objects as smart and connected to realising that they are elements of a service offering allows us to make a prediction: The next breakout Internet-of-Things company will be another services business.