Grid of connecting nodes on a screen. Image source:
Business 2.0, Sustainability

A (financially) sustainable internet of things (pt. 1)

I read with interest a recent post by, well… (ahem)… The Internet of Shit (herein IoS) that calls out the internet of things’ dirty little secret.

The article starts by making some (valid) points about the plethora of devices that are starting to emerge that are connected to the internet for no real purpose or value. Sure, they might be cute or novel (and sometimes that can help us rethink things or look at the everyday from a different perspective). But in a time of relative affluence, and declining wellbeing and environmental health, it begs real questions about value and the need for more crap.

But the crux of IoS’s argument runs a little deeper, looking more specifically at how internet of things (IoT) products are often only financially sustainable by “monetize the monotonous that was never even interesting to any at-scale business”.

Smart devices are sold as a way to improve your life — and in many ways, they do to an extent — but it also means those gadgets are incredible troves of data that could eventually turn into Software-as-a-Service money makers, just like Nespresso did to coffee.

As the author points out:

The problem with the Internet of Things is that the hardware is only one aspect. The makers need to keep servers running to support them, keep APIs up to date, keep security up to date and, well, pay employees. …

That, eventually, costs more than it does to actually sell you the device. …

Many of the newest IoT devices are the types of household appliances you won’t replace for a decade. We’re talking about a thermostat, fridge, washing machine, kettle, TV or light — long term, there’s just no other way to be sustainable for the creators of these devices.

This is something I’ve been thinking a lot about, as I’ve been doing some early experiments in using IoT devices for tracking energy usage. Thinking about the financial model for such a business, one quickly realises that the only way to make it viable is to generate financial revenue through means other than device sales.

They then go on to warn about the dangers of this practice:

The future of your most intimate data being sold to the highest bidder isn’t dystopian. It’s happening now.

But what are we giving away? Where is our data going? Who really owns our devices in this bold new future?

And particularly how this can happen without even realising it:

I own a ton of these devices already: a Tado thermostat, Sonos speakers and Hue lightbulbs. It just kind of happened before I realized it.

Me too…

At the IDEA Summit a few years back, I raised the issue of health data that might be collected within communities, and concerns about ownership and access to this data. Movies like Gattaca eloquently outline some of the potential social effects of access to data (in the movie’s case, genomic information) and it’s potential impact on employment, health, and social strata. But this same principle is of concern in other spheres. While it may seem harmless at the outset, we have seen time and time again how seemingly innocuous data can lead to significant privacy and social implications (exhibit A—this is something that Mikaela Jade highlighted at the Broadband for the Bush conference last year).

But I digress (sorta)…

These concerns about the data being collected and the propensity for IoT companies to monetise it in some ways reflects a key point in Bruce Sterling’s work The Epic Struggle of the Internet of Things. He points to 5 major companies (Amazon, Apple, Facebook, Google, and Microsoft) who have largely engaged in the same strategies, which include various approaches to monetise the data they collect. (Ironically, perhaps, I read that book in iBooks, Apple’s closed content system.)

When I was doing some early experiments in energy monitoring, it was apparent to me just how closed the commercially available systems were in relation to the data they collect. As far as I can tell (and I admit I have not carried out my inquiry with deep rigour) none of the services that I have reviewed (like the Wemo, Wattwatchers etc.) allow for access to your own data via an API or similar. Sure, you can download some form of this data (e.g. as a CSV), but a lot of the value in the specific use cases I’m exploring are looking at real time access. While I haven’t looked at the Terms & Conditions explicitly, I’d be surprised if there are strong customer-facing safeguards around opting in to your data being used or options for how you agree for that data to be used.

As the IoS points out “Before you buy into ‘smart’ devices, consider this: nobody really knows the answer because they don’t want to tell you. It’s better if you don’t know.”

I’m not quite so pessimistic. But I do think that collectively—both as service providers and as customers—we need to proceed with caution…

Feature image by Jason Samfield.

One thought on “A (financially) sustainable internet of things (pt. 1)

  1. Pingback: A (financially) sustainable internet of things (pt. 2) | Zumio

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