Companies in recent weeks have been surveying the economic devastation and uncertainty caused by COVID-19 and pulling their projects. On Thursday, Alphabet’s Sidewalk Labs was the latest to throw in the towel, announcing it was pulling out of the Toronto smart city project after three years and the installation of a 30-person office. Sidewalk CEO Dan Doctorow in a blog post blamed the decision on the “unprecedented economic uncertainty” around the world and in the Toronto real estate market in particular.
A few weeks ago, I wrote about Japan’s NTT DoCoMo halting the deployment of its NB-IoT network because of the pandemic. Meanwhile, companies are pulling back on products. Examples include SiriusXM shutting down its smart connected car device, Automatic, and the abrupt about-face from smart hub maker Wink, which is now charging a subscription fee (see story below).
So why am I so happy with how COVID-19 is affecting the IoT?
When times get tough, it becomes easy to see which ideas make economic sense and which don’t. It also becomes clear which products provide users value and which don’t. I know I’ve already gone through every one of my business and personal subscriptions to figure out where I can cut costs. Company managers are doing the same thing, while at the same time having to justify their investments in technology and future product lines.
And Sidewalk Labs — with its heady optimism about the role technology and connectivity could play in delivering a city of the future — ultimately couldn’t deliver on its value with the Toronto project. Even after digging through the hundreds of pages of reports it was still unclear why Alphabet was getting involved and what it wanted to gain from being in Toronto. To be sure, privacy activists and those worried about exactly what Alphabet wanted kicked up a huge fuss, and that didn’t help. But it’s clear that even as activists questioned the value of the project, the novel coronavirus has forced Alphabet to question it as well.
It’s no secret that IoT has been one of the most hyped buzzwords of the last five years. Vendors used to tell me that companies would call them up and literally ask for “some IoT.” But IoT isn’t pixie dust; it’s simply a way to deploy more sensors, collect information from them using ubiquitous wireless coverage, and then analyze that information using relatively cheap computing. It is, in other words, simply a way to service new insights.
Much in the way that people mistook broadband as some kind of magic wand that would bring their products back to life during the dot-com boom, people think of IoT not as a way to get insights, but as a means to change the core product. But broadband didn’t change the core product; it changed the way it was delivered. Broadband disrupted the distribution of goods and services, which had a huge impact on industries including newspapers, music, and eventually, physical stores.
Once the dust from that shift in distribution had settled, it was clear it had changed the economics of most industries. It had enabled new competitors and even the disaggregation of certain legacy features, such as the classified section of newspapers or the need to buy an entire album or cable package. It’s taken two decades, but businesses are finally adapting to the shift broadband has wrought.
In the meantime, the dot-com bust both flushed out weaker players that didn’t understand the shift while also laying the groundwork for infrastructure upon which the future of business was being built. Bankruptcies in the world of fiber and data center operators cleared away debt and let companies like Akamai emerge ready to deliver the costly fiber cables, servers, and data centers that would underlie the new economy.
When it comes to IoT, companies should take a lesson from the broadband era.
Once they recognize that IoT is really a way to deliver new insights, successful companies will figure out how to apply them to their products. Then it’s up to them to continue to innovate around those insights. The insights aren’t actually all that valuable in and of themselves, but taking some form of action or using those insights to help people achieve their goals will deliver a product that is worth paying for.
Take Fitbit, for example. The company makes a fitness tracker, which when it launched in 2011 was a poster child for how IoT devices can use sensors in new places and wireless connectivity to transfer data to computers. For the first time ever, people could track their steps and gain insights around how many they took on any given day. Later, new sensors that measured heart rate or algorithms that helped track sleep broadened the platform.
But almost a decade in, the product is losing its luster because those insights are now a dime a dozen. I just purchased a $25 fitness band from Wyze that offers similar functionality. To keep my business, Fitbit’s insights need to help me take action. Instead, its premium subscription offers me silly insights such as, “You tend to take more steps on the weekend compared to weekdays. Try to make weekdays more like the weekend to get healthy.” Really?
I’d much rather have a fitness tracker that takes the data it gathers and uses it tell me that I need to sleep more, or that if I want to lose the next 5 pounds I need to up my walking by X percent. In the industrial world, companies offering data about machine health don’t just offer real-time tracking of vibration; they tell operators what that data means. And as operators get used to that data, smart companies are pulling in data from other machines to offer insights about the production line those machines sit in or even the entire factory.
So what all does this have to do with Sidewalk Labs shutting down the Toronto Quayside project due to COVID-19? Sidewalk Labs may have realized it wanted to sell cities on its insights, but to do so, it had to get the sensors out in the market, collect the data, analyze that data, and then figure out how to package the insights in a way someone would pay for. That is difficult for a traditional B2B or B2C company to do, but doing it for a public entity that’s answerable to roughly 3 million citizens is almost impossible unless it is a very narrowly tailored product.
Soon after it launched, Sidewalk Labs faced questions around what data it wanted to collect and who might own it. And it failed to offer any specific information to the residents of Toronto, even though the residents of any smart city are its ultimate consumers. Telling people traffic will be better is nice, but without proof and a narrowly defined use case, it’s hard to get politicians and the people who vote for them to embrace expensive technology. Sidewalk failed to convince Torontonians that it should be allowed to collect the data it wanted, much less that it would offer insights around that data that were of any value. And that, as much as the activists arguing against it, killed the Toronto plan.
Similar challenges will play out in the smart home and in the enterprise as users rationalize their spending and try to figure out which connected products offer real value and which ones simply coated their product or service in some IoT dust without understanding its true value.
As this occurs, more companies will drop the marketing around IoT, smart homes, and smart cities and simply try to explain exactly how their insights can change someone’s experience for the better. A recession (or what might turn into a depression) is no time for unfulfilled promises. It’s time for real value.
---
Autor(en)/Author(s): Stacey Higginbotham
Quelle/Source: Stacey on IoT, 11.05.2020
Bitte besuchen Sie/Please visit:
