IoB Insiders Tom Rebbeck, an analyst with Analysys Mason, tests current consumer Internet of Things (IoT) technologies against the theory of ‘jobs to be done’, to highlight the gaps in how we currently use connected devices versus where real needs lie.
In early 2016, I decided to buy and use more IoT devices. The first device I got was a smart watch. It was an amazingly powerful device but, for all of its features (heart rate monitor, activity tracker, smartphone notifications and so on), it was still a lousy watch. The screen was hard to read and the battery life short. I used it for a month before putting it in a drawer. I’ve not touched it since.
Undeterred, on the day of its UK release, I bought an Amazon Echo. Again, it is an impressive bit of technology, but I returned it to Amazon after a week. Bought as a replacement for my kitchen radio, a regular radio for the same price, £150 ($188), offers much better sound quality. I found that the other things that the Echo can do, like giving a weather forecast, worked better from my smartphone.
The problem is not the technology but what we do with it
The problem with these devices doesn’t lie in the technology, standards, or price. They failed to do what I needed; the watch wasn’t a good watch and the Echo wasn’t a good speaker.
Harvard economist Theodore Levitt said “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” Or, to put it another way, people don’t care how something is achieved, they are far more interested in the outcome. This idea has evolved into the ‘jobs to be done’ theory, popularized by Anthony Ulwick and Clayton Christensen. In both my examples, neither the watch nor the Echo fulfilled its primary job.
The problem with much of the IoT right now, particularly in the consumer space, is that we aren’t clear about outcomes. We have all of this technology, but we don’t know how to best apply it.
The elements are in place
The pieces are in place for IoT. Processors are cheap and small, battery performance is improving, standards for local area connectivity are available (think Bluetooth, ZigBee and so on), and LPWA networks are being built (Sigfox, LoRa, NB-IoT to name a few). It is hard to point to any regulation blocking IoT. For most use cases, IoT has the spectrum it needs. Security standards are well understood, if not always widely adopted.
All of these things could be better – battery life could be longer and processors cheaper, for example – but that is not what is holding IoT back. Conditions don’t need to be perfect for a technology to take off. The first iPhone only had 2G connectivity. Text messaging, when first launched, was incredibly fiddly, but was still a success; it fulfilled a job to be done.
It’s not clear how the technology or the smartness of a device addresses, or identifies, the job to be done. The technology or smartness is likely to add cost, in return for benefits that are not easily understood.
Some areas are benefiting from IoT
Connected street lights may not be the most exciting example, but increasingly councils are moving to lights that can be controlled remotely – for instance, dimmed between midnight and 5am, or turned up if there has been an accident. Without much publicity, this technology has been widely adopted – up to one million street lights are already connected in the UK alone.
And local councils are making huge savings from these systems. One council saw its energy bill for street lights go from £6 million ($7.5 million) a year to £3 million ($3.5 million) – a remarkable achievement and one that used relatively simple technology. This saving represents a very clear financial incentive to adopt IoT that often does not exist with consumer examples.
Another example is large machinery. Based on IoT sensor data, Caterpillar Marine advised its clients to clean a ship’s hull more frequently, every six months rather than every two years. The resulting increase in efficiency saved up to $400,000 per ship each year.
In both the street light and shipping examples, the job to be done is unchanged, but IoT improved efficiency.
Spend on IoT is gradually increasing
We can see some evidence of this gradual growth of IoT in Intel’s financial results. Last year, the microprocessor giant generated $2.6 billion from IoT. This is relatively small in terms of total Intel revenues, less than 5 percent, but is consistently growing – 15 percent last year and at an average rate of 13 percent over the past four years.
This isn’t a radical transformation, and perhaps we have been oversold the idea that IoT will transform industries. What seems to be occurring is the gradual adoption of IoT to improve efficiency – IoT is mostly not doing new types of job, but doing existing jobs better.
The key challenge of IoT, especially consumer IoT, may not be technology, network, regulation or price. The challenge is understanding the outcomes we want to achieve and how IoT can either do existing jobs better or do new jobs.
Tom Rebbeck is the lead of Analysys Mason’s Digital Economy research practice
