Internet of Philosophy: Consumer

Over the past two weeks I've been throwing words at the internet about how I think certain IoT systems should be implemented.  Specifically, Municipal (Government) and Enterprise (Business).  But really, all of that blah-blah-blah is just an introduction to this post: the Consumer (Home) side of it all.  After all, I'm not a government official nor am I employed in any way by a business.  However, I do own a home and I do consume.

The not-so-old adage that 'If you're not paying, you're the product' is what got me thinking about all of this in the first place.  Whether that saying is a complaint, a compliment or just a bunch of extruded male bovine waste is up for some debate.  However, is a decade that has seen the rise of Software-as-a-Service and attempts to add subscription models to everything (thanks Obama Amazon), it is worth taking a some time to analyze how it might apply to the SmartHome space.

The Basics

Home automation has been around for decades (made longer if you use a looser definition).  However, in the last five years, it has seen a strong uptick in adoption due to the ubiquity of home internet, WiFi, smartphones, and a reduction in the cost of basic sensor and control modules.

The poster child for this rise is the Nest Learning Thermostat.  A lot has been said about the product itself, its rise, its fall and what it means to the Smarthome market.  Regardless of all of those things, this network attached appliance led to connected switches, locks, blinds, appliances and other things.  And all at prices that were (and remain) in the reach of the loosely defined American Middle Class.

There are lots of good reasons to do it and a few things to be aware of, all of which has been worked over in this space and others in the past.

Pros:

• Individualized control over the systems in your home that matter to you.
• Save energy on HVAC and lighting
• Personalized security systems without the need for professionally installed wires.
• Control convenience from anywhere in the home and often anywhere in the world.
• Automate home functions based on time, weather, presence and other factors.
  

Cons:

• While initial cost is low, total cost can creep over time as more things are added.
• Different functions usually require different systems: a different app for lighting than for HVAC than for security.
• Security concerns around the Smarthome devices abound.  They can be hacked, and, if they are, what does that tell others about you and your home vulnerabilities?

Future Guidance

That's what the market is now.  A market that has stabilized, seen some of the fluff fall out and a slow move from earlier adopter into mass market.  A market that is past its first high margin flush and is now settling into profit through unit velocity.  Which means that some of the companies are looking for other ways to monetize their user base.  Which means that they are going to be selling access to you to advertisers.

Companies like Nest (owned by Alphabet/Google), Belkin, Philips, Samsung, Sony, LG and others are all looking at ways to use the data that they are collecting from the people who have bought their product.  They all want to enter into co-marketing agreements that allow others, usually CPG companies like Proctor and Gamble, Kraft Foods, Nestle and that bunch, to mine that connected device user data.  They are looking for was to more intelligently target their advertising to just the people most likely to buy their products.

For instance, if Nestle knows that your coffee maker kicks on at 6 AM, then that's when they want to send a message to your smart fridge about any deals that they have on coffee at your local grocer.  Your door locks are triggered at 7 PM every evening?  Then, the American Beef Council wants you thinking that "Beef. It's what's for dinner."

Courtesy LA Times Article about a man sued

for slogan confusion.

At its surface, this seems intrusive.  And it is.  These companies would tell you that, "Hey, you're going to buy coffee anyway, right?  We're just trying to help you get good deals."  They have a point, though weak as what they are really trying to do is make money off of what they know about you. 

They say, "Hey, because we're doing this, the products that we sell you are cheaper."  This is the US broadcast TV model (you don't pay for the content, but have to suffer ads), a model that is losing viewers to subscription services like Netflix.

The Point

Really, as a consumer, there is only so much that you can do about this stuff, the biggest being to 'Vote with your Wallet.'  Research what a company can do with the data that they have on you.  Yeah, I know that means actually reading the Terms and Conditions.  But then you know what they might do with the data that they collect on you and decide for yourself if that's a good thing.

This is schmoid, clicking 'agree' and moving on.