set fairly treat this money saving advice with skepticism. This has a knock-on
effect on the perceived UX of the energy saving service. Issues of trust need to
be tackled upfront in the design, perhaps through presenting pricing in more
transparent ways.
Device and service models
In the traditional product business model, the provider charges once, upfront,
for hardware. This is how we are used to buying, for example, cars, or
household appliances. For a long time, this was also how we bought software.
In service models (of which many digital models are examples), the provider
charges for ongoing service provision. Music subscription services such as
Spotify or storage like Dropbox are examples of service business models. A
non-connected product can be supplied as a service; for example, renting a car
through a traditional rental company is a service. The customer pays for use of
a car, not for ownership of a particular car. Adding connectivity to objects
increases the potential for service models.
The choice of business model is a balancing act between where the customer
perceives the value to be and what they expect to pay for, and what it costs
you to provide. IoT is new, which means that what the customer expects to pay
for is not always a reflection of the costs you may incur!
For example, your connected heating controller requires an internet service to
provide you with remote control via your smartphone app. That costs money
to maintain, especially when you consider that the lifespan of a heating
controller might be 10 years or more. The provider might factor that cost into
the price they charge you for the product upfront, but that might make it more
expensive compared to competitor products. Or they might choose to charge
you a regular fee for ongoing service provision. But they might find that
customers aren’t used to paying an ongoing fee to keep their heating working!
In that case, the company might try to add value to this service, by turning it
into a platform that also supports other devices (like connected lighting or
energy monitoring), or adding extra service components, like a maintenance
contract.