Inevitability of IoT creates new challenges for manufacturers

The big message coming out of CES 2017 is that the Internet of Things (IoT) is coming into your life whether you like it or not. Appliance manufacturers are following television manufacturers and making “smart” a standard feature, not an upsell. Home Automation and IoT aficionado Stacy Higginbotham reported that she saw everything connected at CES but was surprised that “connected grooming products appears to be a theme.” The real theme here is that manufacturers are adding IoT because it solves their problems. Data from product use helps them understand how well their products work for users and how they fail. This data helps them design better product for their customers and gives them a new offering for new customers — marketing teams interested in the behavior and preferences of the product customers. Manufacturers have seen the value data creates for themselves and so consumers are getting IoT in products “for free.”

But from the consumer’s perspective what are the implications of these new features? Not surprisingly there’s both pros and cons.

Pros

1. Consumers are getting the technology infrastructure they need to choose from the many new applications at a marginal cost — IoT mass customization if you will. Smartphones were a good example of this and now both homes and cars are following suit — becoming default platforms for new application value propositions that allow users to customize technology to their lifestyle.
2. Consumers are becoming an integral part of the design cycle of products because product designers can see both use and curation activity as design inputs for new features and products. IoT technology is closing the loop on getting exactly the features users want.
3. Consumers can both benefit from and participate in broad conservation efforts, e.g. energy and water, through the automation and optimization that connected products bring. We become responsible participants through the simple use of our new technology products.

Cons

1. Privacy and security are put into the hands of the manufacturers of these new products. Bob Price of Business Insider says: “As chips are quietly added to your possessions, more and more of your private life (even your intimate life!) will be quantified and scrutinized by marketers and algorithms. You’ll be inviting them right into your home to scrutinize every aspect of how you live so as to better sell you products.” As manufacturers make connected products more convenient and easier to use, they are also becoming more sophisticated in their data gather capability. Consumers will struggle to even be a part of a “trust” decision regarding their data.
2. When consumers don’t buy a product for its connected features, they won’t properly use those features, particularly if they add friction. The recent DYN Distributed Denial Of Service (DDOS) attack was a perfect example of this because consumer motivations for the products did not include the effort to change passwords and default access conditions leaving their devices open for online exploitation. Even when consumers do buy a connected feature, they often do not have the knowledge, skill or interest to make the good decisions necessary to drive free market selection of the best products. Early Wi-Fi connected baby cameras showed how manufacturers have to take a more holistic role in the proper use of their products. Poorly designed connected products can have unintended consequences for users and manufacturers.
3. New connected products can make life more complicated. Interoperability is a well-known need but is still a long way off in most markets so every connected product consumers bring home adds friction to their life. This friction can manifest itself in everything from misuse of the product to bad data for the manufacturer’s intended applications.

The question for business leaders, of course, is how to leverage the pros and mitigate the cons. Looking at the cons, the answer is quite simple: manufacturers must align their IoT motivations with end-user needs. If manufacturers want the advantages of IoT-generated data, they need to be accountable to their customers — for the entire product life cycle. They must consider user privacy and user effects on information security. Not only must they understand the requirements for connectivity and data gathering, they must understand user motivations for connectivity and make sure that motivations are aligned with their own. This is the new challenge for product managers and developers alike. 

When user needs are not considered, IoT connectivity can expose manufacturers to unintended consequences. Consider the DYN DDOS attack again. Consumers have been adopting various Internet connected products for networking, security and entertainment without much thought or care to the way these devices used the Internet. Millions of online cameras, for example, have been deployed without worrying about how those cameras communicated other than the imagery customers wanted to see. As a result, millions of users unknowingly welcomed a security Trojan Horse into their homes and connected them to the Internet with the unintended consequences of October 21, 2016.

The DYN DDOS attack has been thoroughly analyzed from a technical point of view and these analyses inform engineers and security teams how to build and operate better products. But the root cause of the DYN attack is the risk of the unstoppable wave of IoT functionality: a lack of accountability to all users of a connected product. 

CES 2017 has shown us all that we are getting IoT-enabled products whether we want them or not. But the DYN event and other connected home products have demonstrated that without a broad view of value propositions and buyer motivations serious unintended consequences can result. Manufacturers anxious to gather and analyze data from the use of their products must consider how that connectivity might be used and abused by all parties throughout the life of their products.

Those who rush headlong into the promise of IoT connectivity and big data, without proper context and design considerations, might find themselves the subject of headlines and “how-not-to-design-IoT products” analyses.