Three years ago I found a research paper that proposed a combination of distributed computing and heating as a service: A cloud provider company like Google or Amazon would install computers in users’ homes – as black-boxes providing heat to the users and computing power to their cloud.
In the meantime I have encountered announcements of startups very similar to this idea. So finally after we have been reading about the Internet of Things every day, buzz words associated with IT infrastructure enter the real world of hand-on infrastructure.
Heating boxes will get smaller, more compact, and more aesthetically pleasing. They might rather be put in the hall rather than being tucked away in a room dedicated to technical gadgets. This is in line with a trend of smaller and smaller boiler rooms for larger and larger houses. Just like computers and routers went from ugly, clunky boxes to sleek design and rounded corners, heating boxes will more look like artistic stand-alone pillars. I remember a German startup which offered home batteries this beautiful a few years back – but they switched to another business model as they seem to have been too early.
Vendors of heating systems will try to simplify their technical and organizational interfaces with contractors: As one vendor of heat pump systems told me they were working on a new way of exchanging parts all at once so that a technician certified in handling refrigerants will not be required. Anything that can go wrong on installation will go wrong no matter how detailed the checklist for the installer is – also inlet and outlet do get confused. A vendor’s vision is rather a self-contained box delivered to the client, including heating system(s), buffer storage tanks for heating water, and all required sensors, electrical wiring, and hydraulic connections between these systems – and there are solutions like that offered today.
The vendor will have secured access to this system over the internet. They will be able to monitor continuously, detect errors early and automatically, and either fix them remotely or notify the customer. In addition, vendors will be able to optimize their designs by analyzing consolidated data gathered from a large number of clients’ systems. This will work exactly in the way vendors of inverters for photovoltaic systems deal with clients’ data already today: User get access to a cloud-based portal and show off their systems and data, and maybe enter a playful competition with other system owners – what might work for smart metering might work for related energy systems, too. The vendor will learn about systems’ performance data for different geographical regions and different usage patterns.
District heating is already offered as a service today: The user is entitled to using hot water (or cold water in case a heat pump’s heat source is shared among different users). Users sometimes dislike the lack of control and the fact they cannot opt out – as district heating only works economically if a certain number of homes in a certain area is connected to the service. But in some pilot areas in Germany and Austria combined heat and power stations have already been offered as a service and a provider-operated black-box in the user’s home.
The idea of having a third external party operating essential infrastructure now owned by an end-user may sound uncommon but we might get used to it when gasoline-powered cars in a user’s possession will be replaced by electrical vehicles and related services: like having a service contractor for a battery instead of owning it. We used to have our own computer with all our data on it, and we used to download our e-mail onto it, delete it from the server, and deal with local backups. Now all of that is stored on a server owned by somebody else and which we share with other users. The incentive is the ease of access to our data from various devices and the included backup service.
I believe that all kinds of things and products as a service will be further incentivized by bundling traditionally separate products: I used to joke about the bank account bundled with electrical power, home insurance, and an internet plus phone flat rate – until the combined bank account and green power offering was shown on my online banking’s home screen. Bundling all these services will be attractive, and users might be willing to trade in their data for a much cheaper access to services – just as a non-sniffing smart phone is more expensive than its alternatives.
I withhold judgement as I think there is a large grey and blurry area between allegedly evil platforms that own our lives and justified outsourcing to robust and transparent services that are easy to use also by the non tech-savvy.
Update 2016-06-02 : Seems I could not withhold judgement in the comments :-) I better admit it here as the pingback from the book Service Innovation’s blog here might seem odd otherwise ;-)
The gist of my argument made in the comments was:
I believe that artisans and craftsmen will belong in one of two categories in the future:
1) Either working as subcontractor, partner, or franchisee of large vendors, selling and installing standardized products – covering the last mile not accessible to robots and software (yet),
2) Or a lucky few will carve out a small niche and produce or customize bespoke units for clients who value luxurious goods for the sake of uniqueness or who value human imperfection as a fancy extra.
In other communication related to this post I called this platform effects Nassim Taleb’s Extremistan versus Mediocristan in action – the platform takes it all. Also ever growing regulation will help platforms rather than solo artisans as only large organizations can deal effectively with growing requirements re compliance – put forth both by government and by large clients or large suppliers.