Can Internet Become A Product Instead Of A Service?

Chapter 4. Product/Service Definition and Strategy

Past CLAIRE ROWLAND

Nosotros all aspire to create the killer product or service that people want to buy and honey using. The key to this is ensuring that the product solves an bodily problem that people have, in a way that appeals to them. At a pinch, it might provide them with something new and wonderful that they never knew they needed. Information technology sounds simple and obvious, but it tin can exist remarkably difficult to get this right. Right now, the IoT market is skewed toward innovators and early adopters. At that place's huge potential to create groovy new products for consumers, but they may take to contend with new types of complexity.

This chapter introduces:

• Productization as part of IoT design (see "Making Good Products")

• Moving from innovation to mass-marketplace products (run into "From Innovation to Mass Market")

• How products differ from tools (run into "Tools Versus Products")

• What makes a skilful product (see "What Makes a Good Product?")

• Building service offerings around products (run across "The Product is Pleasing to Apply")

• Business models in IoT (see "Business Models")

This chapter addresses the following issues:

• Why a articulate value suggestion is a prerequisite to neat UX design (see "Why is This in a UX Volume?")

• The different types of market for consumer IoT products (run across "Value Propositions for IoT")

• Why consumers want products, not tools (encounter "Tools Versus Products")

• Why it's important to design the service offer around a production (see "Edifice a Service Offering")

• How business organization models can shape UX (see "What is a Business concern Model?")

• How digital business models may start to appear in real-world products (encounter "Bringing Digital Business Models to Physical Products")

Making Skillful Products

In this section, nosotros'll look at why creating a compelling product proposition is the necessary foundation for a skillful UX, and why it's a particular challenge in IoT right at present. Nosotros'll also consider how an IoT product need not be a physical device: it can also exist partly (or completely) a service.

What is Productization?

Productization is the extent to which the supplier makes the user value of the product explicit and like shooting fish in a barrel to sympathise. Compelling products don't just look good or otherwise fuel some underlying need for status (although those things are oft important). They brand information technology immediately apparent to their intended audience that they do a thing of existent value for them: preferably something new that serves a previously unmet need.

Nest is probably the almost famous IoT productization success story. Consumers were resigned to thermostats and smoke alarms being ugly, annoying boxes with usability flaws. Information technology hadn't occurred to almost people that they could exist better. Nest products promise to practice the chore better than about of the competition, in the grade of bonny and desirable hardware that users are happy to have on testify at abode (see Figure four-1). Of course, they are premium products with a premium cost tag. The point here is not that all products should be expensive, but that a good product should fulfill a clear demand for the target audition, with a usable and appealing blueprint. This is the product'south value proposition: the user'south understanding of what the product does for them and why they might want information technology.

Equally Denise Wilton, designer (and erstwhile artistic director of design agency BERG), puts information technology:

Never underestimate the power of a unproblematic explanation, or a product that looks overnice. If people can understand information technology, they can desire 1 for themselves. They're not scared of it. Information technology stops being a weird affair that geeks do.^one

Figure 4-1. Nest thermostat shown in home (image: Nest)

Why is This in a UX Volume?

To some of you, this may seem outside the remit y'all usually acquaintance with UX design. Yous may work in a visitor where productization is handled by product management, or maybe marketing. In others, it might be considered strategic design. UX is not always involved in identifying the opportunity and framing the solution. But most UX designers would walk over hot coals to be involved from the beginning, especially if they accept firsthand knowledge of user needs from conducting enquiry.

Whoever is responsible for it in your organization, it provides the strategic foundation for UX blueprint. It's non possible to pattern a great production or service feel if users don't desire, or empathize, the service in the outset identify.

Value propositions help sell products. But they likewise drive UX. A articulate proposition helps users determine whether to purchase information technology in the start place, only besides helps frame their mental model of the system and what it does (run into Figure 4-two). When users are confident that they understand what the organisation does for them, they take a good basis for figuring out how it works (the conceptual model), and so how to utilise it (the interaction model). All the clever pattern in the globe can't overcome a murky or unappealing value proposition.

Effigy four-2. A good clear value suggestion is fundamental to a great UX

Why is This in an IoT Book?

Productization is, of course, not a challenge that is unique to IoT. It is included in this book every bit it is a particular challenge for the consumer IoT field correct now. Many products and services aren't nonetheless offering good, applied solutions for proven consumer problems. Even where they are, the value isn't e'er apparent from the product itself or clearly stated in terms target users would understand.

This isn't a criticism of the many clever and talented people working in this field. Virtually of them are aware that consumer experience is a claiming.

It's a result of the novelty and inherent complexity of the products and services. We're even so figuring out what we can exercise with the technology, and we're request users to wrap their brains around some novel devices and capabilities.

It also reflects that new technology products and services are often conceived and adult past people with an engineering mindset who value highly configurable functionality. These initiatives can often seem circuitous and unclear in purpose to consumers, because in trying to do and so much, they fail to communicate a clear value for using the service.

At that place is, of course, a market for products developed to meet the needs of highly technical users. At that place'south also bang-up value in products and services that assist a wider range of people motion across passive consumption of technology and larn how to construct their own solutions. For case, If This Then That offers an accessible mode to coordinate unlike spider web services and even continued devices (meet Figure 4-iii). This is functionality that would previously merely have been bachelor to those with practiced programming skills.

Figure four-iii. An If This Then That recipe for saving Gmail attachments to Dropbox

Products Tin Be Services

When nosotros talk about IoT, we tend to focus on the edge devices: the activity monitors, thermostats, connected pet feeders, and more. This is especially truthful when the devices themselves look novel (such as the Nabaztag rabbit) or striking (such as the Nest thermostat).

Just while the devices are a key part of the UX, they are non the whole flick. They are all dependent on an Internet service. This makes the user's relationship with the production much more than dynamic. Instead of the traditional one-off purchase of a traditional concrete product, the user interacts with the provider on an ongoing basis. The user's feel isn't but shaped by the device—it'southward shaped by the whole service. There might not even be a physical production at all: only as you lot can at present pay for Dropbox storage or personal fettle training, so you lot may pay for software or storage to help you make the most of connected devices, or personalized health or free energy-saving communication based around data gathered from your devices.

Note

In this book, nosotros use the term "product" loosely to refer to a packaged gear up of functionalities that solves a problem for people or fits neatly into their lives. That could be a physical device, a service, or ofttimes a combination of both.

But the bigger challenge is in creating products and services that work for mass-market consumers. For this audience, the functionality—what the organisation does and how to employ it—should be transparent. The underlying technology should be invisible. The user should exist able to focus on getting the do good from the product that they were promised, not on configuring it and maintaining it.

From Innovation to Mass Market

The master focus of this book is on creating consumer IoT products and services. In this department, we have a brief look at how technological innovations cantankerous over into the mass marketplace and consider what lessons in that location may be in here for IoT.

Innovators Are Non Consumers

In 1962, the sociologist Everett Rogers introduced the idea of the technology lifecycle adoption bend, based on studies in agriculture.ⁱⁱ Rogers proposed that technologies are adopted in successive phases past different audience groups, based on a bell curve (see Figure 4-4). This theory has gained broad traction in the technology industry. Successive thinkers accept built upon it, such as the organizational consultant Geoffrey Moore in his book Crossing the Chasm. ³

In Rogers'southward model, the early marketplace for a product is equanimous of innovators (or engineering enthusiasts) and early adopters. These people are inherently interested in the engineering science and willing to invest a lot of effort in getting the product to work for them. Innovators, particularly, may exist willing to have a product with flaws every bit long as it represents a pregnant or interesting new idea.

Figure 4-4. The diffusion of innovations according to Everett Rogers; the blue line represents the successive groups adopting the engineering, the yellow line the market place share (image: redrawn from Tungsten'due south paradigm on Wikicommons)

The next 2 groups—the early and late bulk—stand for the mainstream market. Early on bulk users may take a chance on a new production if they accept seen it used successfully by others whom they know personally. Tardily majority users are skeptical and will adopt a product simply after seeing that the majority of other people are already doing so. Both groups are primarily interested in what the product can do for them, unwilling to invest meaning fourth dimension or attempt in getting information technology to piece of work, and intolerant of flaws. Unlike individuals can exist in dissimilar groups for dissimilar types of product. A consumer could be an early adopter of video game consoles, but a belatedly bulk customer for microwave ovens.

Geoffrey Moore identified a "chasm" between the early on adopter and early majority marketplace (which he called visionaries and pragmatists). These groups accept unlike needs and dissimilar ownership habits. Mainstream customers don't purchase products for the same reasons every bit early adopters. They don't perceive early adopters as having the same needs equally themselves. Mainstream customers may be aware that early adopters are using the product. But this will non convince them to effort it out themselves unless they run across it every bit coming together their own, different, needs. So products can exist successful with an early market, yet fail to notice a mainstream audience.

An example of this in the IoT space is the dwelling automation marketplace. Systems such as those based on the ability line protocol X10 have been around for close to forty years. (Early on examples ran over electric power lines and analog phone lines.) The example in Effigy iv-five, from 1986, shows a system that immune users to program and remotely control their heating, lighting, and appliances over a (landline) telephone. These are all applications that even so seem novel and innovative to u.s.; they would take excited the innovators of the 1980s even more.

Even so, habitation automation remained a niche marketplace. It was expensive. It required significant technical skill to set and maintain. Even those mainstream consumers who had heard of abode automation did not run into much value in programming their heating, lighting, and appliances. Had it been more affordable or easier to use, more people might accept been willing to try information technology out. Only merely now are consumers starting to see the utility of connected home products. This is arguably driven by the rise of the smartphone, giving us a metaphor for the "remote command for your life."

What's Dissimilar About Consumers?

Mainstream consumers are at present more aware of connected devices, but they need to exist convinced that these products will actually do something valuable for them. A product that appeals to an audience that loves applied science for its own sake cannot simply exist made easier to utilize or better looking. To appeal to a mass-market audience, it may need to serve a different gear up of needs with a different value proposition.

Figure 4-5. Advertizement for X10 Powerhouse for the Commodore 64, from the Jan 1986 edition of Compute! Mag (prototype via world wide web.commodore.ca)

Mass-market product propositions take to spell out the value very clearly. Users will be subconsciously trying to estimate the benefit they'd get from your product equally offset past the cost/try involved in acquiring, setting upward, and using it, and you need to be realistic about the amount of effort they volition be prepared to invest in your product. The further along the bend they are, the more users need products with a clear and specific value proposition, which crave little endeavour to empathise or apply. And they take a very low tolerance for unreliability. Your production has made a promise to do something for them, and it must deliver on that promise.

This is not merely a question of lacking technical cognition, and certainly non of users beingness dumb. That 10-step configuration process to fix the heating schedule might seem petty in the context of your single product. But it can feel overwhelmingly complex in the context of a busy life with many other more pressing concerns. For this reason, consumers tend to exist most attracted by products that seem as if they volition fit into their existing patterns of behavior and don't crave extra endeavor. For case, ATM cards and mobile phones were arguably successful because they reduced the need to plan ahead in daily activities (getting cash from the bank, or arranging to meet).

Value Propositions for IoT

The guidelines just outlined can of class be applied to whatever type of product or service. But connected products can be complex and frequently do novel things that are difficult to communicate succinctly.

Cadre value propositions should be straightforward—for case, a company offering smart meters may promise to "tell you where your energy spend is going," which is relatively simple. A skillful test of an IoT product proposition is that stop users should not need to focus on its connectivity or onboard computing: it should just make sense.

But in that location may be complicating factors that users demand to understand earlier ownership. You may have to explain which other systems can interoperate with yours, or who owns the user'due south data and what they can do with it. You might take to guarantee how far into the futurity you will maintain the Cyberspace service (if your company is acquired, goes bust, or discontinues the product).

The entrepreneur and academic Steve Blank describes four types of market in which a production tin can operate (encounter Figure 4-half-dozen).⁴ The type of market place influences how you lot position the value of your product.

Figure iv-half-dozen. Four types of marketplace in which a product tin can operate

The following sections outline what this might mean for IoT products.

A new production in a new market

Embedded connectivity and intelligence will fuel the appearance of new classes of product and new markets. In consumer terms, the challenge is ofttimes to convince users of your vision. You have solved a problem they didn't realize they had, or had just accustomed equally "the way things were." The Glowcaps pill bottle top reminds users to take their medication and helps the patient'due south doc track how oftentimes it is taken.

A new type of product in an existing marketplace

Hither, the challenge is to convince users that your production is the best solution to the problem. Perhaps information technology has better features or better performance. In IoT, these products may be familiar physical devices newly enhanced with sensing or connectivity (e.yard., the Withings bath scales). Users demand to understand the value that is added by the enhancements, such equally easier weight tracking. They demand to make up one's mind whether it's something they desire, especially if information technology costs extra.

It might too be a engineering science that offers a footstep alter in experience blueprint. For example, aerodrome terminals tin be large and confusing. You lot would normally rely on signage to notice your way effectually, but this isn't ever clear, consistent, or guaranteed to tell you what you demand when yous demand information technology. You don't want to miss your flight, merely nor do you lot want to end up sitting around at the gate for too long because you were cautious and got there as well early. Beacons offers precise indoor location. Several airlines have been trialing the use of beacons to provide passengers with in-context data and directions (see Figure iv-7). Passengers can be directed to the correct gate more easily, based on their current location in the airport. If a passenger is running belatedly but is very close to the gate, knowing his location might help the crew determine to wait. And if their airplane is delayed, the app could provide them with a voucher to a nearby eating place or café.

Figure 4-7. Illustration of an airport iBeacon trial (paradigm: SITA)

A low-toll aspirant to an existing market

The falling price of embedded computing enables cheaper alternatives to systems that used to exist prohibitively expensive. For example, Lowes Iris (see Figure iv-viii) and SmartThings offer DIY dwelling house automation kits at a far lower cost than professionally installed systems. Y'all may be aiming the organization at people who could not previously beget this category of device, or trying to convince those who could that you're offering a worthwhile saving. Either style, information technology's important to convince users that the system performs the basic functionality but as well equally more than expensive options. Any compromise needs to be something that doesn't matter too much. You need to be clear upward front how y'all accept achieved the cost saving: is the hardware cheaper? Does the system involve more piece of work from the user (e.k., DIY setup)? Does it provide them with less personal (east.g., automated or lower bandwidth) customer service?

A niche aspirant to an existing market

Augmenting an existing product type with connectivity and potentially intelligence can create opportunities to address previously unmet user needs in an existing market place. It may target a niche with specialist interests: for example, an energy monitoring organization designed for those who generate their ain electricity and may sell it back to the filigree. Or it may innovate a premium production for those willing to pay more. The Nest thermostat offered the commencement intelligent heating solution with high-end hardware and polished UX design in a market place previously dominated by ugly, unusable plastic boxes. This reshaped consumer expectations of what a heating controller could be, even in the role of the market that couldn't or didn't desire to pay extra for a Nest.

Figure 4-viii. Lowes Iris Safe and Secure DIY home security kit—hub, motility sensor, 2 contact sensors, alarm keypad (paradigm: Lowes)

What Makes a Good Product?

Good products seem to appeal to mutual sense, and new adept products are often greeted with the reaction "I can't believe no 1 thought of that before!" But developing good products can be far harder than our 20/20 hindsight might lead us to call up. This section looks at the general qualities of a good consumer product before considering what features come with IoT.

The Product Solves a Real Problem (and Makes This Articulate)

Most products are caused in order to solve a problem for the user. A practiced definition of the trouble, and the audience, is essential to creating a clear value proposition. This is the definition of what your product does for people, and why they might desire it.

A conspicuously communicated value proposition is fundamental to user experience. When people come beyond a product (or service), they endeavor to class a quick judgment about its purpose, and whom it is for. If it's not immediately articulate what the value proposition is, it may be dismissed: either because information technology is too hard to effigy out, or because it does not appear to practice anything of value for that person at that fourth dimension. Worse, potential users may wrongly presume information technology is able to fulfill a purpose for which it is not really suited and waste time and/or money on a fruitless endeavor. (You lot may be happy to accept their money in the short term, but over time as well many unhappy customers volition harm your reputation!)

It's all too like shooting fish in a barrel to end up with a poor or unclear value proposition despite good intentions. This is often the result of failing to identify the right trouble for the right audience. You might have added features to show off what the system tin do, or considering they are simple to build, dictated as well much by the capabilities of the technology at the expense of the original purpose and user needs. Or maybe at that place are competing interests involved in feature scoping. It's mutual for systems to try to do lots of things. That may create a great tool for early adopters who similar to tinker and customize, but it risks muddying the value proposition for a mass-market audition. Imagine yous're making a wrist-top device for outdoor pursuits similar hiking or climbing. The core features are an altimeter, barometer, compass, and possibly GPS. It might be quite straightforward software-wise to add on a calendar, to do list, and maybe even games. You lot tin can probably imagine a state of affairs in which someone, somewhere, might use those features. But y'all'll exist at risk of obscuring the key purpose of the device: helping users find their way and stay prophylactic. Too much flippant functionality might even undermine the perception that the device offers skilful quality in its cadre functionality. And it volition brand it harder for users to access the cardinal features they most want and need.

If your device can fulfill multiple purposes for the user, yous'll have to invest extra try in helping users sympathise its value. A abode contact sensor is a generic slice of hardware with no inherent value to the user. The value is in the function it enables: used to detect when an intruder has forced a door open, or when a medicine chiffonier has been opened. Early adopters may love the flexibility to utilise the sensor as a tool that tin can practice all kinds of things. Only you'll take to help mass-market users understand what it could be for. For instance, your app might offer specific window or cupboard alarm functionality to become with the device, fifty-fifty if these practice much the same thing under the hood.

Connected products intended for the mass market need to demonstrate a clear advantage over any predecessors. Continued things are not inherently better than nonconnected things, simply because they are connected. Despite beingness demo-ed at consumer electronics fairs year after year, the much-maligned Internet fridge concept has so far felt like a solution in search of a trouble. Research shows that people tin can imagine using intelligent fridges that provide data about their contents, nutrition, and health, but this has not translated into demand.⁷ Tasks such every bit managing shopping lists and looking up recipes simply don't feel as if they crave a new, fridge-based screen. The idea of the fridge that automatically orders more shopping when goods run out is fraught with potential for irritating errors. If you lot take to make the refrigerator sync with your calendar or heating thermostat to see when you're on holiday in order to end your regular milk order, maybe it's just simpler to buy your own milk after all.

Continued sensors enable many kinds of data in the world to be captured, quantified, and made visible. Fettle tracking and free energy monitoring (meet Figure 4-xiii) are obvious consumer examples of this. But beware you're not just counting things. Information should be used to provide genuine insights that users tin act on.

Figure four-13. The Efergy free energy monitoring service helps users empathize their electricity consumption (epitome: Efergy)

Connectivity can enable remote command of devices. The core value of connected sockets and door locks is commonly remote control (see Figure 4-14).

Connected home systems that allow automated rules to be created are examples of products whose principal value is in automation (see Figure four-15). Intelligent systems such as the Nest thermostat may hope to do the job (such as setting a heating schedule that best fits habitation occupancy) better than a homo.

Effigy 4-14. The August door lock, app, and hub (plugged into outlet; image: August)

Figure 4-15. An automatic "coming home" smart rule in the AT&T Digital Life tablet app (epitome: AT&T)

Tags or sensors embedded in objects permit them to be trackable and identifiable. The FedEx SenseAware service (Figure 4-16) embeds a multisensor device inside sensitive shipments (such as medical supplies), assuasive the sender to rail the location of a parcel and the temperature, low-cal levels, humidity, and atmospheric pressure to which it has been exposed. If any of these autumn exterior a set up range, a replacement parcel can exist dispatched.

Figure 4-16. FedEx SenseAware sensor and web app (paradigm: FedEx)

It goes almost without saying that your system needs to be reliable enough to fulfill its promise. Glitches and outages are inevitable in most systems and early adopters will forgive these more readily. But if at that place are contexts of utilize in which you cannot beget failure, the production must be 100% reliable. For example, emergency alarms for elderly or vulnerable people must always piece of work. You'll need a backup power supply and connectivity (see Figure 4-17), and regular checks to ensure these work.

Effigy 4-17. The hub of the Scout security system has a fill-in battery and 3G cellular chip so it won't stop running during ability and Net outages (image: Sentry Security)

The Production Comes at a Toll Proportional to the Perceived Value

A good production needs to residue the cost and effort required from the user confronting the value it delivers. If the value is very high, users may be prepared to pay more, or invest more time in configuration.

Determining a price signal is a tricky affair in itself. You'll accept to consider manufacturing costs, competition and market atmospheric condition, and what users are prepared to pay.

You'll also need to consider the cost to the user of switching from whatever they were using previously. Household technology, like heating and alarm systems, tends to final years and users won't want to supercede working boilers, sensors, or other kit at great expense without a significant benefit.^eight If you can support retrofit—new technology that tin can easily be integrated into sometime systems—without greatly increasing the cost of your product, y'all'll increase the potential market place for the product.

In the context of UX, the perceived cognitive effort to utilize your production and the time it will have to get it set upward and working bear on who will buy it, and why. Be careful in your judgment hither. In the thick of a projection when y'all are excited almost your thought, it'south easy to overestimate how motivated users are to invest time in your product.

Smart homes are a typical example here. It's been possible to connect up lighting, heating, appliances, and entertainment systems for effectually 40 years, as we saw before. Simply you needed to exist an enthusiast to ready it upwards and programme it (or wealthy enough to pay someone else to practice that). A niche of users has taken smashing pride in their automated homes, only others accept found them fraught with back up bug, applied science failures, and a poor fit with the needs of other guests and residents. Mass-market place users frequently view habitation automation with suspicion: home is a very personal context, and one in which we are frequently loath to introduce novel technologies that might interruption our established routines. Well-nigh of u.s. don't want to accept to practise a load of programming merely so we can turn lights on and off. We manage that well plenty already and it's an effort to switch unless the benefits are actually evident.

Adding extra cognitive endeavour to everyday tasks is a common risk. The designer Scott Jenson proposes the idea of the "surprise package": the mature consumer product that is "enhanced" technologically, turning it back into an early adopter product. As Jenson puts it:

Companies have product concepts that are now far into the laggard range of stability and established behavior, and they change the product significantly. ... The new product is finer repositioned 'back to the front' of the curve, creating a high-tech production that can just be used or appreciated by the forgiving and accomplished early-adopter group of consumers. This is where much of the consumer backlash appears, equally safely mature and benign products such every bit TVs, radios, thermostats, home phones and even cars are turned back into early adopter products, and then sold to an unsuspecting laggard audience.⁹

Telly is a great example. TV used to be an instant-on experience. Nosotros may have had less choice of channels and no on-demand services, but you could exist watching something inside a 2nd or two of turning it on. It can now have minutes. You may be faced with software updates for your set-tiptop box and/or connected TV (mayhap for apps you don't even want simply can't delete), then minutes of navigating around a programme guide or on-demand service using a cheap remote command poorly equipped for the job.

If your production is replacing an existing consumer product or mode of getting something done, pay attention to what was good nearly the onetime fashion of doing things. Try to preserve that and enhance the experience, rather than adding new complication.

The Product is Pleasing to Use

The difficult-headed cost/do good analysis is of import for any product, simply the best products speak to us on an emotional level, too. This is partly virtually aesthetics, only it's not just about bolting pretty design on elevation of functionality. We course an integrated impression of the functionality and design of the production, and how well that fulfills our practical and emotional needs and fits (and perhaps communicates) our sense of who we are.^ten Figuring out the correct experience is most design equally well every bit production strategy.

Services in IoT

In this department, we'll consider the office of services in creating a viable IoT product. Why are services important, how practice users remember about products that have device and service components, and what kind of services should you lot consider offering?

IoT Products Combine Devices and Services

At the start of the chapter, we prepare out that an IoT "product" is oftentimes a hybrid of physical device(southward) and service provision. At the very least, Internet connectivity is a form of service, and there may be other service components that your product needs to piece of work properly and ensure a adept experience.

When people buy a product, they look to accept the right to utilize it for as long equally they like. When the production is dependent on an Internet service, there is a reasonable expectation that that service will keep to exist available, for taking information technology away would render the product at worst useless and at all-time limited. After all, y'all would not expect your dwelling house heating or lighting to stop to function because the visitor that produced the original system had gone out of business concern, or no longer wished to back up yous. The service forms part of that experience. The relationship between the device and service tin can vary.

At that place is an inherent tension hither betwixt the old world of physical products, and the new earth of Internet/web services. On the Web, new services appear and old ones are "sunsetted" on a regular ground. This is acclaimed as progress. But a physical product is likely to come up with expectations that it will last for at to the lowest degree a few years. If the service stops working, the lifespan of the device is shortened, creating landfill (and unhappy users). Service providers have a responsibility to ensure that they are able to maintain and better their Internet services, and then that the product has a reasonable lifespan.

How Users Understand Devices and Services

Continued heating controllers and door locks are examples of systems where the device is likely to be the focus: we might phone call them service-enabled devices. Users view the device every bit the near salient part of the organization. For instance, Nest users are probable to say "I have a Nest," referring to the thermostat to represent the entire system. (It'southward far less likely you'd hear someone saying "I employ Nest," "I accept Nest," or "I accept a Nest system.") Because the device is and then key to the UX, users volition take loftier expectations of its design and functionality. The service enables remote admission and smarter functioning, but in the user's listen it is a way to control the device (run into Figure 4-eighteen).

A security alarm is an example of a arrangement where the service is the focus: nosotros might call it a device-enabled service. The alarm service is what users care most. The sensors and other devices are generally low profile and near of the intelligence sits in the Internet service or gateway software. You could add or swap out devices without affecting the cadre functions of the service.

Figure iv-18. Nest advertising puts the device front and center (epitome: Jason Morgan)

Key factors that betoken that the service may exist the focus of your user experience, non the device itself, may exist that:

• Interactions are distributed across multiple devices, so no single device is the center of attention

• Most functionality lives in the cloud service or gateway software (perchance because local devices don't have much calculating power)

• Devices can be added, removed, or swapped without irresolute the cadre functioning of the system

Equally the UX expert Mike Kuniavsky describes information technology, the device is an avatar for the service.¹¹

The Oyster travel bill of fare (see Effigy 4-xix) is a stored value contactless smart card used on London public transport. Information technology tin hold various types of tickets or a credit residuum for travel on the hush-hush, trains, buses, trams, and gunkhole services. ("Stored value" ways that the credit is notionally held on the card itself, rather than in a carve up account, equally with a debit card.)

Effigy 4-19. The London Oyster card

Passengers add tickets or money to the card itself via online purchase, ticket machines at stations, or by setting upwards regular debits from their depository financial institution accounts. They swipe the bill of fare on a reader at the first and end of journeys to validate their tickets or deduct credit. The Oyster saves time and money processing ticket part transactions and reduces the number of newspaper tickets. To encourage use, fares are substantially cheaper than paper tickets.

The Oyster carte itself is non much of a smart object. It's just a piece of plastic containing an RFID chip and a small amount of memory. The RFID chip passes a unique ID to a reader when a passenger swipes in. The memory holds information about the tickets or coin stored on information technology, and then the reader does not need to contact the dorsum part service in real time every time the user swipes the card. This speeds upwards the rate at which passengers tin pass through ticket barriers, which is vital during rush 60 minutes. Readers transmit transactions to the back office in batches.

The Oyster carte is an icon of London life, but it is actually just an avatar for the service. Without the card readers or the ability to top it up it wouldn't exist much use to y'all. The Oyster service involves polish coordination between many unlike channels, such every bit the Transport for London website, the ticket machines, ticket offices and shops that sell elevation ups, the readers themselves, and the dorsum office systems (run across "Service Ecosystems").

Technically, the Oyster bill of fare itself is not even an essential role of the service: Oyster tin can also be used via NFC-enabled phones and bankcards. In the future, the defended Oyster carte might even disappear, only the service will remain. But services are intangible, and avatars tin can provide a concrete, tangible focus that helps us empathise the service.

Right now, IoT systems are still pretty novel and not well understood, at least by consumers. It'southward easy to look to individual devices equally a handle to empathise the system, whether or not this is accurate. (We've heard smart meter users refer to the in-home counter-top display as the "smart meter," and the actual smart meter every bit the "computer under the stairs"; see Figure 4-twenty). You might demand to play upwards the role of the devices in communicating what your system does (presenting it every bit a service-enabled device), but to aid consumers empathise information technology.

Figure 4-20. A British Gas dual fuel in-home display for use with a smart meter (epitome: British Gas)

Over fourth dimension, equally we all become more accepted to the products around us having intelligence and connectivity, our power to empathize continued products as services without depending on physical manifestations may become more sophisticated. The idea of a heating system without a visible controller, or a door lock without a visible lock may seem strange right now, merely in time, as long equally they piece of work, we might be more open to such things.

Information technology will probably always be advisable for some systems to have highly visible devices, and for some to focus more than on service blueprint (see Table 4-1). The key is to pitch your UX to best conform your production, and the needs of your users.

If your service is the focus of the UX, y'all can notwithstanding make cute devices but make sure the service blueprint is at least equally skilful. And if the device is the hero of your UX, make certain information technology'due south attractive, usable, and does what it needs to practise, elegantly.

Table 4-1. Service-enabled devices versus device-enabled services (many devices and services are somewhere in-between)

Device is the Focus of the UX	Service is the Focus of the UX
Industrial design of devices is striking	Industrial blueprint of devices is depression profile
Many interactions handled via the core device (e.chiliad., a watch)	Interactions are distributed across multiple devices
Most functionality is handled on the cadre device itself (e.1000., a washing auto)	Most functionality lives in the cloud service or gateway software
User views service as a fashion to command the device (east.thousand., "I have an app for my thermostat")	User views device as a means to enable the service (e.g., "The intruder alert uses motion sensors")
Swapping the core device for a different make or model would radically modify the user feel of the organisation (e.1000., changing to a dissimilar make of thermostat or make of car)	Devices can be added, removed, or swapped without changing the core operation of the system (due east.k., paying for travel with an NFC phone instead of an RFID bill of fare)

Service Ecosystems

Services are delivered through the interactions of networks of people, organizations, infrastructure, and physical components. The devices, and fifty-fifty the digital components, are only function of the experience. A part of the Oyster experience is the interactions you may have with station staff when buying a ticket or asking for aid. In order to help you, they will have been trained to provide good customer service, only they will also need access to expert information about the transactions on your card and arrangement information. Making this whole system work smoothly is a lot more than complicated than just making cards, machines, and a website: it requires someone to take a holistic view of how the service is experienced, and make sure all the components work reasonably smoothly together (see Figure 4-21).

Figure 4-21. The London Oyster ecosystem (website image: tfl.gov.u.k.)

Complex IoT services, such as a connected dwelling, require the coordination of multiple devices working together, perhaps even using a degree of intelligence to automate some functions without explicit user instructions (e.g., turning off the electricity supply if a gas leak is detected). There may be multiple digital interfaces. In that location may even be coordination between multiple digital and physical services—for example, a heating organisation may utilise data from a tertiary-party atmospheric condition service, and the user might have the option of taking out a service and repair contract.

This is called an ecosystem.

If yous're designing a service, you'll need to have a more complete view of all the parts of your service, and the relationships between them. For case, you may need to think about treatment software and component upgrades beyond your devices. Ovens may crave new controller boards, and washing machines may demand firmware upgrades (run across Figure 4-22). You'll need to design processes for handling these issues with consumers.

Figure 4-22. The Samsung WW9000 connected washing machine supports over-the-air firmware updates (paradigm: Samsung)

There may well exist customer support, marketing, sales, and perhaps professional installation and maintenance too. Mark Kawano, founder of Storehouse and former Apple tree User Experience Evangelist, describes how creating a well-designed product is about getting the entire experience right, not just well-nigh the UI layer we typically associate with design:

You lot run into companies that have poached Apple designers, and they come up with sexy interfaces or something interesting, only it doesn't necessarily move the needle for their business or their production. That's because all the designer did was work on an interface piece, merely to take a really well-designed product in the way Steve would say, this "holistic" thing, is everything. It'southward not just the interface piece. It'due south designing the right business model into it. Designing the right marketing and the copy, and the way to distribute it. All of those pieces are disquisitional.¹²

Building a Service Offer

Thinking at the service experience level encourages united states to have a broader look at user needs, non merely the interactions with the website, mobile app, or embedded devices. In this chapter, nosotros'll consider how this might create new opportunities to look at the wider service package you may offer customers.

For example, take home security. We typically think of alarm systems as something that makes a loud racket and acts as a visible deterrent on the dwelling house. A connected organization can tell y'all when someone is breaking in, and mayhap picture show them. But if you're not able to get home, and no one else can respond, you can't practise anything virtually it. Connectivity has alerted yous to the problem only also enabled y'all to feel powerless to act.

In this case, you might have the option of paying for a professional person monitoring service. The security firm (with your permission) can view your cameras before sending someone out.

IoT services oft provide opportunities to capture data, which tin can be used to improve the service offered, perhaps through meliorate customer service or smarter back up. For example, diagnostic data about the functioning of a boiler could exist used to identify systems at run a risk of breakdown and schedule an engineer visit before they fail. You might even package the cost of the service contract with the monthly fee for maintaining the service. Users may be happier to pay for something like this than to cover the price of maintaining your Cyberspace servers!

Professional installation or configuration may too be an opportunity for circuitous systems such as home automation technology. Time It Correct,¹³ designed for the needs of the Orthodox Jewish community, is a culturally specific example (Figure 4-23). There may in the future fifty-fifty exist a role for independent IoT "plumbers" who specialize in helping consumers install, maintain, and repair connected abode systems: a kind of role the technology blogger Anil Dash refers to as "blue neckband coders."¹⁴

Figure four-23. Fourth dimension It Right comes with a professional person installation and configuration service (image: Autotime)

Some other service opportunity may involve helping users secure lower prices or better service from third parties, or otherwise benefit from the data that comes from your system. In the sustainable housing evolution of Niggling Kelham in Sheffield, northern England, residents accept smart meters to rail energy utilise and band together to majority buy electricity.

Personal services, such as installation or intensive customer support, are non necessary for all services and may non be applied inside your business organization model. But it'due south worth considering the bigger context of user'south expectations effectually the service you're offering, and how their needs volition change over time, to brand sure your service isn't missing something they call back they need, or to spot opportunities to ameliorate the overall experience.

Business Models

Establishing the human relationship betwixt your system and the surrounding service is, in part, deciding on your business organisation model. Put crudely, this can exist summarized in two questions: what volition people pay for? And what do you need for production to be sustainable?

What is a Business Model?

A business model is the blueprint for how a business creates value for customers, and makes coin. For example, a classic business organization model is the "bait and claw" ane used by printer manufacturers. They charge a relatively low price for the initial hardware just brand coin on toner cartridges.

The model maps out how the business organization volition make money, either from increasing revenue (selling more) or decreasing costs. Increasing revenue can be approached by:

• Generating new business organisation from new customers

• Generating more than business organisation from existing customers

And even a not-for-profit organization needs a sustainable business concern model in gild to survive.

How Practice Business concern Models Affect UX?

Business organisation models shape the way users perceive the value of the service and the fairness of pricing. This can brand the production proposition more than or less appealing. Users will approach the product or service with a positive, trusting mindset, or a more skeptical or fifty-fifty negative one. This sets the tone for the rest of their interaction.

For instance, the major free energy companies in the Britain accept recently come under pressure for perceived unfair pricing practices. All are rolling out smart energy meters, which generate data that can exist used to offering customers tips on saving energy and therefore money. Only customers who feel that prices have non been set fairly treat this money saving advice with skepticism. This has a knock-on effect on the perceived UX of the energy saving service. Bug of trust need to be tackled up forepart in the pattern, possibly through presenting pricing in more transparent ways.

Device and Service Models

In the traditional product business organization model, the provider charges once, up front end, 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 every bit Spotify or storage similar Dropbox are examples of service business models. A nonconnected production can be supplied equally a service; for case, renting a motorcar through a traditional rental company is a service. The customer pays for utilise of a car, non for ownership of a item 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 yous to provide. IoT is new, which means that what the customer expects to pay for is not e'er a reflection of the costs you may incur!

For example, your connected heating controller requires an Internet service to provide you with remote command via your smartphone app. That costs money to maintain, especially when you consider that the lifespan of a heating controller might be ten years or more. The provider might factor that cost into the toll they charge yous for the product upward front, but that might brand information technology more than expensive compared to competitor products. Or they might cull to charge you a regular fee for ongoing service provision. Only they might find that customers aren't used to paying an ongoing fee to keep their heating working! In that case, the company might effort to add together value to this service, by turning it into a platform that likewise supports other devices (like connected lighting or energy monitoring), or adding actress service components, like a maintenance contract.

Every bit already discussed, the perceived value may rest in different places for dissimilar types of connected device/IoT system. Is it the overall service users recollect is nigh valuable, or one or more of the devices that deliver it?

IoT is young and there'due south perhaps a tendency for users to focus more on devices, as these are novel (as we suggested earlier). Service providers may focus on more on services, equally that's where the potential for long-term customer engagement sits. Y'all may call back that y'all are offering a health management service, simply if your users see beautiful bathroom scales, then persuading them to pay for an ongoing service may be tough. The key for a business model is that customers experience they are paying a fair toll (whether in terms of money or sharing their data) for the value they receive, and you are making the money you lot need.

Bringing Digital Business Models to Concrete Products

Building digital services around concrete products enables suppliers to apply novel business organisation models, more commonly found in the digital realm, to physical products.

Combining physical devices and services is likely to lead to some interesting, novel, and confusing business organisation models that challenge our preconceived ideas of what it is to own and employ a product.

Business organisation models we are accustomed to in the digital realm might make their style into the physical world. For example, we are accepted to using websites that are free at point of utilise only make money from selling eyeballs to advertisers. It'due south not a huge stretch to imagine that physical devices might exist given away in exchange for advertisement or user data. The ubiquitous calculating researcher Pertti Huuskonen jokes nigh the freemium fridge. Your supermarket might give you a free fridge with a screen that forces you lot to sentry an advert every time you open it. Or the fridge might track the products you put in information technology and eat, and where you bought them, and share that data with the supermarket, and other advertisers. Users could buy their own fridges, substantially paying for advertizing-free experiences or privacy, or get costless or cheaper appliances in exchange for their eyeballs and data. In the future, privacy may be a rich person'due south luxury.^xv

More positively, in that location are benefits to digital service business concern models. There are opportunities to develop ongoing relationships with customers, understand more than virtually the people who purchase your products and what they do with them, and tailor services better to their needs. Users are accepted to (and mostly comfortable with) spider web-based services that capture and store information about them to provide a better service. The sensing and processing capabilities of IoT devices open upwards potential to extend these personalized services to the physical globe.

You may be able to capture user beliefs that wasn't previously visible, perhaps in real time—for case, how people are using energy via smart metering, identifying and tracking people in a physical space, or monitoring traffic levels via aggregated data about the density and speed of movement of drivers' smartphones. Knowing how often or intensively a product is used, and what for, enables you to tailor the service, sell supplies, improve the adjacent version, or offer boosted services. For example, some Nespresso coffee machines at present come with a SIM carte du jour, allowing Nespresso automatically to ship more capsules when the client is running low (see Effigy 4-24).

Figure iv-24. The Nespresso Zenius coffee machine comes with a SIM menu (image: Nestle Nespresso)

You could accuse users based on their beliefs. For example, some car insurance companies, such as Insure the Box in the Britain,¹⁶ base pricing on actual driver beliefs rather than demographics. This may do good responsible drivers who are in a demographic category considered to be at high risk of accidents, such as under 25s.

Products tin proactively maintain themselves or provide information to enable smarter back up: as discussed before, boilers could identify when they are developing a fault and be serviced before they pause down; appliances could share mistake data with the manufacturer and then customer support can aid users diagnose and fix more of their ain problems. It is possible to vary pricing based on fourth dimension of use (e.g., charging more for electricity at certain times of 24-hour interval to manage demand).

A good UX design needs to remainder the needs of the business with the needs of the user. Even if you are not shaping the business concern model of the product you lot are working on, yous at least need to empathize information technology. The all-time business models serve the interests of customers as well as the business. In the car insurance example, cheaper insurance is granted to drivers who would otherwise be penalized on grounds of age, only the model besides allows the company to reduce costs and doubtfulness through more accurate risk profiling. User and business needs can be in tension: for example, a connected home service might rely on heavy upselling of new products. Here, pattern tin can brand the deviation between the upsell advertizing existence either useful or at least minimally intrusive, or downright irritating or something that causes users to cease using the system birthday.

Summary

A clear value proposition ensures users understand what your product does, and whether they want it. This is essential in order for them to understand how it works, and how to use it.

Innovators and early adopters are inherently interested in engineering and forgiving of imperfections. Mass-market consumers ofttimes have dissimilar needs.

Many IoT systems are tools: they require the user to frame their own trouble and configure the system to solve information technology. Consumers tend to look for products that promise to solve a item problem for them and come already configured to exercise that. They expect the cost and effort of using the production to exist in proportion to the value it brings them.

IoT creates new opportunities for information gathering, sharing, remote control, and automation. But there are common pitfalls that can limit a product to early adopter markets. In detail, exist conscientious of introducing new complexity to mature consumer products.

The UX of an IoT product might be focused effectually the device or the service. All IoT systems depend on some kind of digital service, and mayhap offline service components also, like professional installation, maintenance, or customer support helplines. Ensuring these piece of work well together is an of import part of the overall UX.

Business models shape the mode users perceive the value of the service and thus the UX. Bringing connectivity and intelligence into devices may lead to digital business concern models appearing in the concrete world.

¹ From a talk at UX Brighton, Nov 2012.

² Everett M. Rogers, Improvidence of Innovations, Fifth Edition (New York: Simon & Schuster, 2003).

^three Geoffrey Moore, Crossing the Chasm (New York: HarperBusiness, 1991).

^four Steve Blank, The Four Steps to the Epiphany: Successful Strategies for Products that Win (Yard&S Ranch Printing, 2005).

⁵ Nest Protect has suffered from some interaction design bug related to the ability to disable fake alarms. Just the Protect is still a expert example of a clear production concept.

⁶ At the time of writing, the Arduino model is being phased out for a newer version based on the Spark Cadre evolution board.

^seven Matthias Rothensee, "User Acceptance of the Intelligent Refrigerator: Empirical Results from a Simulation," IOT'08 Proceedings of the 1st International Briefing on the Internet of Things, 123–139.

⁸ C.F. the model of shearing layers, which describes buildings as a set of components that evolve and obsolesce over different timescales. "Services," like HVAC and plumbing, are expected to last vii–15 years. This concept originates from architect Frank Duffy and was developed by Stewart Make in his volume How Buildings Learn: What Happens Afterward They're Congenital (1994, Viking Press).

⁹ Scott Jenson,, The Simplicity Shift (Cambridge, United kingdom: Cambridge University Printing, 2002). Available from http://www.jensondesign.com/The-Simplicity-Shift.pdf .

¹⁰ Lionel Tiger'southward The Pursuit of Pleasure is an interesting viewpoint on the anthropology of what makes products appeal (Boston: Little, Brown, 1992).

^eleven Mike Kuniavsky, Smart Things: Ubiquitous Computing User Experience Design (Burlington, MA: Morgan Kaufmann, 2010).

¹² Mark Wilson, "four Myths About Apple Blueprint, From an Ex-Apple tree Designer," Fast Company, July/Baronial 2014, http://fleck.ly/1bD2ezr .

^xiii http://autotimeonline.com/

¹⁴ http://dashes.com/anil/2012/x/the-blueish-collar-coder.html

^fifteen Personal communication with Pertti Huuskonen; Pertti Huuskonen, "Run to the Hills! Ubiquitous Computing Meltdown," Proceedings of the 2007 Briefing on Advances in Ambience Intelligence, 157–172, http://www.cs.swan.ac.britain/~csmax/csrsRG.pdf .

¹⁶ https://world wide web.insurethebox.com

Source: https://www.oreilly.com/library/view/designing-for-the/9781491971468/ch04.html

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