Scott Amyx is the founder and CEO of IoT consultancy Amyx+. He (@amyxiot) is an expert in developing platforms that help IoT innovators make use of the glut of data at their fingertips. The views expressed are the author’s own, and do not necessarily represent the views of Qualcomm.
The pay-for-what-you-use concept is not a foreign one. Take your electric bill. Sure, you might groan when your monthly total spikes in the summertime, but it’s not because you disagree with the idea of charging for the actual wattage used. Energy use, after all, is not an all-you-can-eat buffet.
Now, imagine if this pay-per-use model expanded beyond basic utilities to your connected appliances — even the smart refrigerators, washers, and dryers we have today. You wouldn’t own them, but rather pay as you use them. You’ve heard of software as a service; this is device as a service. A massively connected Internet of Things (IoT) could make such a model a reality. And, in doing so, spell the end of product ownership as we know it.
The groundwork is already being laid. IoT sensors are being used in countless practical applications such as street lighting, driverless cars, medical devices, and home security. These sensors and devices generate a wealth of data, and companies (should we, as users, allow them) can use this information to learn how their products are being used on a day-to-day basis. All of this data will flow over the forthcoming 5G network, which will not only be fast and efficient, but able to manage hundreds of thousands of simultaneous connections.
Data will drive a change in how we’re billed, moving from a traditional purchase model to a modern, data-driven one that gathers and uses customer information to charge for use, wear, and tear. There will be no upfront costs; we won’t own appliances or products.
This device-as-a-service approach could not only take into account how often an appliance is used, but incorporate other factors as well, such as the size of a load of laundry, to determine the amount you’ll pay. Visualize, for instance, a washing machine that bills a surcharge for tossing in only one or two shirts at a time, or a refrigerator that gets more expensive the longer you stand with the door open.
In a way, several companies are testing the waters for a usage-based model. Amazon, for instance, heavily subsidizes the cost of its Kindle devices, knowing that the e-reader or tablet will continue to bring in money as users buy books, music, movies, and games through the device. And makers of smart washing machines, such as Marathon and Whirlpool, are already keeping track of user settings, energy usage, and detergent levels. To go a step further, Whirlpool's machine is part of the Amazon Dash Replenishment Service; when it senses detergent levels are low, it will reorder it. Similar products exist, including Brita pitchers (for filters) and CleverPet food bowls (for kibble), among about a dozen other devices.
As manufacturers gain greater access to usage data, they’ll also be able to better monitor wear and tear on appliances before breaks or failures occur. Those insights, coupled with machine learning, would allow them to better optimize performance. By self-monitoring and analyzing usage patterns (wow, this family washes a lot of heavy loads!), devices could adjust routine maintenance accordingly.
With the number of IoT-connected devices expected to reach 20.8 billion by 2020, questions naturally arise about how to support such a vast network of sensors. Today’s 4G networks can handle the current load, but they won’t be able to accommodate the massive influx of connections from every Tom, Dick, and Harry’s fridge, washing machine, and more.
This is where 5G comes in. Currently, there are many communication systems in place (RFID, Bluetooth, and Wi-Fi to name a few), resulting in a patchwork of disconnected technologies. A standardized 5G will bring uniform coverage for the IoT. Gigabit-class speeds will accommodate city-wide networks of sensors and devices, and 5G’s ultra-low latency will ensure that packets and data are not dropped in the trip to and from the cloud.
As companies begin to better manage IoT data, we’ll get closer to a device-as-a-service model, and a natural shift away from traditional product ownership will occur. Once set up, this approach could reach beyond simple usage monitoring to encourage better consumer behavior overall. Ultimately, no matter how the data is applied, an appliance would be in tune with its specific user’s needs — be that more detergent, a service call, or a not-so-subtle nudge to be a little more eco-conscious.