Deconstructing Google and Amazon IOT Strategy

Its an interesting time as the IOT space continues to heat up. Consumers these days have a range of choices when it comes to building a smarter home. Some of these are smart switches and others hubs. So far, we've seen Amazon echo, dot, Google on-hub, Google Home, Samsung Smart Hub at the same time we're seeing new IOT hub standards like NEST, WeMo, Sensibo and other Kickstarter projects. All of which are gaining massive traction these past 18 months.

On the one hand we can say its all attributed to the explosion of the IOT space. It also makes perfect sense that hardware manufacturers continue to build smart devices that realises the dream of a smart connected home.

So why then is Google and Amazon in this list? Or asked a different way, why have they invested in ensuring their products can be placed in your home? Google and Amazon's business model isn't in the consumer electronics space. They certainly don't intend to be building smarter switches, refrigerators, air conditioners, TVs.

Of course then more questions ensue: Why specifically these devices? What do you get out of these devices that you don't already have with your phone's Siri, Google Voice Search or Cortana?

The simple answer: The company in the center of this new IOT wave will be sitting on a goldmine of data at the end of the day. Thus their strategy is to place themselves in the middle of it. To focus on being your conduit and command center to the rest of your smart devices and more.

Introducing your new butler. She is silent but attentive. She observes and listens how you live your life, never judging never critical. She is un-obstrusive, ready to respond to you at a moments notice, any time of the day. She smart and you're the center of her world. She is only as interactive as you need her to be. She knows your favourite song, your regular dinner order, what you want of your home, the perfect temperature, the mood lighting, the party bass.

Logically then, of course Artificial Intelligence has to be the key part of it. It both represents the core value offering of these hub devices and a significant barrier to entry. Want to join in the race Philips? General Electric? We'll see you in 5 years!

Lets envision a simple customer journey:

• You get home after a long day at work, the lights are on by the time you walk through the door, the air condition turned on to combat the heat
• You want to enjoy a decent dinner and get some household chores done. Your butler already knows whats in the fridge and recommends some dishes that require light cooking suitable to your new diet program you're been on. Alternatively there are 2-3 options for dinner delivery ready to be activated
• You want to enjoy a nice movie and your butler recommends you action movies relevant to the last couple you've rated highly. Why not a wine and cheese recommendation to go along?

Your new butler can already make all that happen today with a little more imagination and some magical IFTTT skills.

But there are 2 sides of this equation. Its not merely about the value of convenience these products bring to you. Amazon and Google benefit greatly by the sheer amount of data they can gather:

• Your lifestyle habits and preferences, some explicitly provided by you, some tacit and learnt through observations
• Your usage data, how you utilize other smart devices
• The state of your home, refrigerator, tv, gaming consoles

What Google and Amazon will do with this data will entirely be different. Google has the mission to organize the world's information. Enough Said. Amazon on the other hand will be able to service your life. Imagine acquisitions by Amazon about payments, prime/fresh foods, groceries, household services (laundry).

I'd wager these endeavours to represent a clear and serious investment and strategy by Amazon and Google. It is by no means accidental nor exploratory. Its a straightforward foothold strategy.

As mentioned earlier, the key to this is an impressive AI. One that provides you value while learning about you. This better explains their commitment to the field of Artificial Intelligence as well. So the stakes are high here. Continue to develop and prove that your AI is relevant in your consumer's homes and win the game or fail eventually fade away.

Borrowing from one of my favourite economical concepts, the Technology Adoption Life Cycle (TALC). In-home artificial intelligence hubs are still in the early adopter's stage. Allowing plenty of opportunities to impress and even make mistakes. But as the whole AI-IOT field matures, they'll have to provide real value to continue to stay in the people homes.