BACK IN 2013, fashionable people started wearing glasses with a small but inevitably conspicuous built-in heads-up display and camera. These fashionistas were unusually distracted even for a distracted age — losing the threads of conversation, staring off into space, tilting their heads in odd ways, muttering strange commands (“Take a picture,” “record a video”) and every now and again reciting impressive, if irrelevant, lists of facts magicked up from the pages of Wikipedia. The glasses were called “Google Glass,” the unfortunate creatures who wore them “Glass Explorers.” The “Glass Explorers” were soon dubbed “Glassholes,” the fad faded and the glasses are no longer available.
Is the Internet of Things (IoT) a more prolonged Google Glass experiment — a cumbersome way of addressing a non-problem? Over the past 20 years companies have poured billions of dollars into the IoT. Consultancies gush in glossy reports about a wonderful future in which dumb objects are infused with intelligence — umbrella handles that glow when it is about to rain, pillboxes that yelp when you forget take your meds, intelligent ovens that produce a perfect roast, tennis rackets that feed data to your smartphone which then tells you how to improve your serve.
The hype continues. A new report from the management consultancy McKinsey and Co. estimates that “the total value potential for the IoT ecosystem could reach $12.6 trillion by 2030.” Fusion Strategy, a new book by Vijay Govindarajan of the Tuck School of Business at Dartmouth University and Venkat Venkatraman of the Questrom School of Business at Boston University predicts that the fusion of “big iron and big data, steel and silicon,” will produce nothing less than a fourth industrial revolution. But if the hype continues, so do the disappointments.
Manufacturer surveys suggest that fewer than half of internet-capable devices are connected to the internet. Companies such as LG Electronics, Inc. and Whirlpool Corp. have responded to these dismal figures by sinking yet more money into the IoT. But many customers remain indifferent. “Why Has the Internet of Things Failed” is the blunt title of a recent article by the tech blogger Pete Warden.
The simple answer to Warden’s question is that, for all too many consumers, the lemon juice is not worth the squeeze. The shiny yellow lemons turn out to be rancid. And the squeezing turns out to be difficult and time-consuming.
The consumer benefit of attaching your household devices to the internet is often small. How do you benefit by connecting your dishwasher to the internet? You might be able to start it remotely (after you’ve used your thumb to activate your phone, found the app, clicked on the app, and debated all the other things you could or should be doing on your phone). But you still must be there to load it. What is the benefit of being able to control the temperature of your fridge remotely? Fridge-freaks might revel in this power, but most of us just set the fridge to the right temperature and forget about it. The same question goes for notifications that the washing machine has finished doing the washing, or that the kettle has boiled or that the oven has heated up.
You may not have ever considered “the Role of IoT in Reusable Cups.” Rest assured that the ever-inventive IoT industry has. “IoT-enabled return stations allow users to conveniently return their used cups” while providing cleaning staff with up-to-date information on how many cups are accumulating. “IoT devices can track the location and status of reusable cups, providing valuable data on usage patterns and helping optimize the distribution and collection process.” And IoT-enabled cleaning machines can make sure the cups “are sanitized according to industry standards.” Wouldn’t it be simpler and cheaper just to install a sink and get everyone to wash their own cups?
If the benefits are often small, or indeed nonexistent, the set-up tax is high. You must download a different app for every manufacturer. You must make sure the device is connected to the internet (washers and driers are often kept in out-of-the-way places where the internet signal is poor). Setting up an iPhone or an iPad can be taxing enough even though the benefits are obvious, and the devices come equipped with keypads. But keying complicated instructions into an oven is a chore of a different magnitude.
The problems do not stop when you are connected. People tend to hang onto their white goods for years. The IoT obliges them to reprogram these devices whenever they change their service providers or their smart phones or even their passwords. One of the most vaunted benefits of the IoT is that it allows companies to upgrade products remotely. But what if the upgrading goes wrong? Users of Sonos, Inc.’s audio devices who downloaded the company’s latest app discovered that it sent their speakers bonkers — playing music at ear-splitting volumes or emitting high-pitched sounds in the middle of the night. The more interconnected appliances become, the higher the chance that they will all fail together.
The case for the IoT is a bit stronger in the world of expensive machines than in the world of ovens and washing machines. Elon Musk revolutionized the automobile industry by reimagining the motor car as a connected computer on wheels. Deere & Co. is trying to revolutionize the farm machinery industry by being equally bold about tractors. The company claims that it collects between 10 million and 15 million pieces of information per second from some 500,000 connected machines on more than 325 million acres of land around the world in order to enable precision farming — for example spraying individual weeds with weedkiller rather than blanket spraying a field. Giant infrastructure companies such as Schlumberger and Halliburton Co. use sensors to keep watch on, say, oil rigs for signs of rusting and wear and tear. Rolls-Royce Holdings Plc uses them to monitor how its jet engines are performing in the air, and whether they are wasting fuel.
In all these cases the cost-benefit analysis of linking machines to the internet is different than in the consumer sector: The lemon is worth the squeeze. But this does not prevent bitter fights between companies and their customers over both the division of spoils and the balance of power. Apple is famous for forcing its customers to go to its own shops for repairs when they break their phones rather than opting for cheaper third-party repair shops. It has even gone as far as to use software updates to disable touch screens installed by third parties. John Deere has provoked an angry revolt from farmers over its attempt to do the same thing with its tractors, even arguing that its products are so computerized and interconnected that the farmers no longer own the tractors but merely lease them.
The final worry about the IoT is that it turns everything around you into a spy. People are belatedly fretting about giving so much information about themselves to their computers and phones. Do those of us finally beginning to worry about baring our lives to our iPhones want to add our washing machines or ovens or cars to the list of listening devices? And could we trust the makers of washing machines or ovens to guard our information with the same expertise that they trust Google or Apple? The more information we put onto the IoT, the more danger there is for it to leak out or find its way into the wrong hands.
Companies have begun to complain about consumers’ resistance to technology when it comes to the IoT. But before investing yet more billions in creating an internet of things, companies should ask themselves whether this “technology resistance” is just backwardness, or is driven by a shrewd calculation of the balance between the use of the product (often minimal) and the threat to privacy. It is sometimes best to trust your customers rather than to persist in the pursuit of business hype. People may be happy to see this or that device attached to the internet if they can see obvious benefits. But an all-encompassing internet of things stretching from your toaster to your car to your reusable cup at work will remain a pipe dream.
BLOOMBERG OPINION
