The Internet of Things has a dirty little secret
A year ago when the Internet of Shit account was spawned, it started as a personal joke: I was hearing a lot about internet-connected smart devices, but they all sounded like terrible ideas.
In recent times, however, we’ve seen a new slew of devices pouring onto the market with no real specific purpose, as far as anyone can tell. At first I was just making jokes about these things, but the situation is worse than I initially thought.
I’m talking about devices like this bullshit $700 WiFi connected juicer, a smart egg-minder, a cat-tracking water fountain or this bizarre Bluetooth umbrella.
Many IoT devices will claim to improve your life, but really, there’s only one aim: monetize the monotonous that was never even interesting to any at-scale business.
Ten years ago, if you had told people they could make millions off a specific coffee machine that would only take one type of pods, made by the creator of the machine, they might have laughed at you — but then Nespresso came along and ate the world of drink-at-home coffee.
Now the same is happening with your every day gadgets, but in a slightly more sinister, under the surface way. Companies want to internet-connect your entire house in order to collect more data on you.
The opportunities are delicious for bloated internet companies: now a software company could know how warm your home is, what times of day are noisy, whether you have a pet, when you turn on your lights or if you listen to music while having sex.
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.
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.
We’ll get more and more services revenue because the hardware sits on the wall for a decade.
— Tony Fadell
That, eventually, costs more than it does to actually sell you the device. Probably in less than the first twelve months of you using it. That’s not sustainable, and no Internet of Things company has found a better way yet.
If Nest wanted to increase profits it could sell your home’s environment data to advertisers. Too cold? Amazon ads for blankets. Too hot? A banner ad for an air conditioner. Too humid? Dehumidifiers up in your Facebook.
To be clear, that hasn’t happened yet but Nest already shares “anonymous” data with “partners” and Google just happens to be in the business of showing you ads for things. It’s something that will eventuate.
Long term this will absolutely happen with the sheer majority Internet of Things devices — after the shakeout when everyone realizes it’s fucking impossible to make money from online coffee cups.
As the market eventually saturates and sales of internet-widgets top off, you can bet that everyone from the smallest to largest vendor will look to what’s next: the treasure trove that is everything it knows about you.
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.
There is an alternative path that some could take: maybe Nest needs to increase its revenue, so it decides to charge a monthly subscription model for its thermostat. Now you need to pay $5 per month or it’ll lock you out.
The question then, is if you’d pay for it? Will you pay for a subscription for everything in your home?
Maybe: if the device comes for free, with that subscription, and guarantees your data will be kept private… but I suspect that many people prefer to own outright and simply won’t care about the privacy compromise.
The future of your most intimate data being sold to the highest bidder isn’t dystopian. It’s happening now.
Take this article on AdAge as an example, that quotes the maker of an internet-connected fridge as saying:
“We are trying to understand how to impact consumers’ lives in meaningful ways,” Ms. Andrews said. “It was interesting to see what people were doing with our products — like what time they are buying things and when — it is a wealth of knowledge.”
“I think you will see a move of brands starting to look at this space as a new revenue stream,” she added. “We didn’t make a fridge initially to make a ton of money, but in a year or two, it can make revenue, absolutely.”
Even Nest already came to this realization. Its founder, Tony Fadell, told Forbes in 2014 that “We’ll get more and more services revenue because the hardware sits on the wall for a decade.”
No shit, because your data is valuable perpetually since that thing sits on your wall quietly observing without you knowing.
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.
Like you, I was sucked in by many of their marketing charms, like Nest, which promises it “never stops learning” to make your heating better.
When faced with this or a boring-old version, almost all of us think along the lines of “You mean I don’t have to fiddle with buttons? Sign me the fuck up!”
But what are we giving away? Where is our data going? Who really owns our devices in this bold new future?
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.
