https://www.iotworldtoday.com/wp-content/themes/ioti_child/assets/images/logo/mobile-logo.png
  • Home
  • News
    • Back
    • Roundups
  • Strategy
  • Special Reports
  • Business Resources
    • Back
    • Webinars
    • White Papers
    • Industry Perspectives
    • Featured Vendors
  • Other Content
    • Back
    • Q&As
    • Case Studies
    • Features
    • How-to
    • Opinion
    • Podcasts
    • Strategic Partners
    • Latest videos
  • More
    • Back
    • About Us
    • Contact
    • Advertise
    • Editorial Submissions
  • Events
    • Back
    • Embedded IoT World (Part of DesignCon) 2022
Iot World Today
  • NEWSLETTER
  • Home
  • News
    • Back
    • Roundups
  • Strategy
  • Special Reports
  • Business Resources
    • Back
    • Webinars
    • White Papers
    • Industry Perspectives
    • Featured Vendors
  • Other Content
    • Back
    • Q&As
    • Case Studies
    • Features
    • How-to
    • Opinion
    • Podcasts
    • Strategic Partners
    • Latest videos
  • More
    • Back
    • About Us
    • Contact
    • Advertise
    • Editorial Submissions
  • Events
    • Back
    • Embedded IoT World (Part of DesignCon) 2022
  • newsletter
  • IIoT
  • Cities
  • Energy
  • Homes/Buildings
  • Transportation/Logistics
  • Connected Health Care
  • Retail
  • AI
  • Metaverse
  • Development
  • Security
ioti.com

IIoT/Manufacturing


Thinkstock

Product-as-a-service business models can be tricky.

Product-as-a-Service Business Models Are Trendy but Tough

"Power-by-the-hour" may be a hot trend thanks to the Internet of Things, but the cybersecurity ramifications and data sharing provisions in such arrangements aren’t clear.
  • Written by Brian Buntz
  • 6th June 2017

Imagine, if you will a couple, of grim scenarios.

In the first, a commercial airliner loaded with people is suddenly imperiled when a hacker breaks into its avionics system. The avionics goes dead, making it impossible for the plane to access engine telemetry or communicate with the airport control tower or the FAA.

In the next, an elevator ferrying several people to the top floor of a hotel suffers a similar fate: Bad actors take control over it, causing it to crash into the top of the shaftway.

While, statistically speaking, airplanes and elevators are incredibly safe, the question of liability in hypothetical cyberattacks like this could grow thornier thanks to the IoT-fueled product-as-a-service business models. In such situations, industrial companies could rent out, say, avionics systems or jet engines to airlines, or elevator makers could charge building owners per ride rather than selling them a steel box.

The idea of a customer paying for an outcome rather than a means to that end sounds attractive. If you can forecast demand and predict mechanical problems before they happen, why not adopt the product-as-a-service business model? But what happens when the service suffers a catastrophic cyberattack and the relevant regulations aren’t worked out yet?

To make the leap to selling a product as a service, the vendor must first make that product more sophisticated, adding in connected sensors and layering in machine-learning tools. If you accept security expert Bruce Schneier’s decree that complexity is the worst enemy of security, such products masquerading as services would be undoubtedly create new cyber risks, thanks to their expanded options, service offerings, connectivity, interfaces and functionalities. The conclusion may sound obvious, but it doesn’t seem to come up often in discussions surrounding IoT-enabled power-by-the-hour business models.

The Dead Sea Effect

Companies mulling the sale of their goods as services rather than as products are also likely to limit their liability. “Can you imagine if a vendor assumed 1,500 customers’ IT security risk? I don’t think any business would want to do that,” says Peter Tran, RSA’s Advanced Cyber Defense general manager and senior director.

Meanwhile, organizations that sign up for “as-a-service” products will likely want to minimize their own risk exposure. “If you are the owner of the Pleasant Stay Hotel and you sign up for an as-a-service contract with Acme Elevator Co., the reputation risk will be enormous if that elevator gets hacked,” says Don DeLoach, author of the recently published book “The Future of IoT: Leveraging the Shift to a Data Centric World.” “If you are the CEO or the CISO of the Pleasant Stay Hotel, you are going to push as much liability as you can onto [external vendors] while doing whatever you can to minimize your risk profile. Whether the Acme Elevator Company goes out of business, if they take you down with them, you are still out of business.”

You have this middle ground that is literally dead—uninhabitable. Nobody wants to cross over, but everyone knows about the threats of that environment.

It is more likely that both the OEM and its customers will take some responsibility for cybersecurity while attempting to shift a portion of that risk onto the other party. “I call this the ‘Dead Sea effect,’” Tran says. “You have this middle ground that is literally dead—uninhabitable. Nobody wants to cross over, but everyone knows about the threats of that environment. In the end, each business will creep towards it, but they will never bridge the Dead Sea. That’s a problem in many as-a-service arrangements.”

Data Sharing Questions

Another consideration with the product-as-a-service business model is data sharing. Vendors providing as-a-service offerings will have contractual agreements for data sharing. As businesses across the world become more data-driven, battle lines could be drawn over who owns the data. “Again, returning to our hotel example, let’s say that the elevator company is capturing a range of data—velocity of the elevators, occupancy information, estimated number of people on a given floor, temperature, and so on,” DeLoach says. “The elevator company might offer the hotel one-tenth of the data they capture. But if you are the hotel owner and you want a holistic picture of how your hotel operates, you’ll want access to all of the data that is relevant. You could tell them: ‘I am going to work with a different elevator company unless you give me access to it.’”

Meanwhile, businesses that wrest control of the data away from the vendor could face a demand for data coming from the opposite direction, DeLoach explains. “If a company is providing elevation as-a-service, they could optimize that service if they had access to relevant data from the hotel,” he says. “If they could enrich their own data, they could have a better signature and thus provide better service to the hotel,” DeLoach says. “In the end, IoT data has the ability to be valuable to the organizations on both sides of the equation.”

Tags: Article AI IIoT/Manufacturing Security Strategy Technologies Vertical Industries

Related


  • The Five Foundational Pillars of Digital Transformation
    Learn the five key elements to build an Industry 4.0 roadmap that ensure long-term success.
  • Image shows an industrial engineer using tablet check and control automation robot arms machine in intelligent factory industrial on real time monitoring system software. Welding robotics and digital manufacturing operation. Industry 4.0 concept
    Navigating Manufacturing Megatrends With IoT and AI
    How implementation of AI across an automotive factory floor helped increase productivity while providing a six-figure monthly cost-saving due to reductions in scrap and energy consumption.
  • cisco image
    4 Keys to Managing IT Remotely
    The advantages of a well-designed remote IT management solution become indispensable once it enables MSPs and IT departments to do all of the following remotely: Run and maintain IT infrastructure to significantly reduce the average ticket response time Perform maintenance tasks during off hours to avoid interrupting employees Be proactive instead of reactive by keeping […]
  • How Remote Access Helps Enterprises Improve IT Service and Employee Satisfaction
    The amount of people who work remotely at least once per week has grown by 400 percent since 2010. The benefits are clear to productivity, employee retention, and the bottom line. Support technicians need to be prepared to assist more end users than ever. In this eBook, you’ll discover how enterprise support technicians are using […]

Leave a comment Cancel reply

-or-

Log in with your IoT World Today account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Related Content

  • IoT Security Firm to Acquire Medical Security Startup
  • Ransomware Attack Could Impact Paychecks
  • Volkswagen Deploys Nokia’s Private 5G Technology
  • Case Study: New Product Introduction of Cellular Connected Device

Roundups

View all

IoT Product Roundup: PTC, Nokia, Arm and More

19th May 2022

IoT Deals, Partnerships Roundup: Intel, Nauto, Helium and more

14th May 2022

IoT Product Roundup: Amazon, Synaptics, Urban Control and More

27th April 2022

White Papers

View all

The Role of Manufacturing Technology in Continuous Improvement Ebook

6th April 2022

IIoT Platform Trends for Manufacturing in 2022

6th April 2022

Latest Videos

View all
Dylan Kennedy of EMQ

Embedded IoT World 2022: Dylan Kennedy of EMQ

Dylan Kennedy, EMQ’s VP of global operations, sat down with Chuck Martin at Embedded IoT World 2022.

Embedded IoT World 2022: Omdia’s Sang Oh Talks Vehicle Chip Shortage

Omdia’s automotive semiconductor analyst sits down with Chuck Martin at this year’s event

E-books

View all

How Remote Access Helps Enterprises Improve IT Service and Employee Satisfaction

12th January 2022

An Integrated Approach to IoT Security

6th November 2020

Webinars

View all

Rethinking the Database in the IoT Era

18th May 2022

Jumpstarting Industrial IoT solutions with an edge data management platform

12th May 2022

AI led Digital Transformation of Manufacturing: Time is NOW

9th December 2021

Special Reports

View all

Omdia’s Smart Home Market Dynamics Report

7th January 2022

Cybersecurity Protection Increasingly Depends on Machine Learning

28th October 2020

IoT Security Best Practices for Industry and Enterprise

20th October 2020

Twitter

IoTWorldToday, IoTWorldSeries

Clearview AI has been fined $9.4 million for collecting images of people from social media platforms to add to its… twitter.com/i/web/status/1…

24th May 2022
IoTWorldToday, IoTWorldSeries

Swiss-startup Airyacht is developing an eponymously named vehicle that it says will take the luxury-yacht experienc… twitter.com/i/web/status/1…

23rd May 2022
IoTWorldToday, IoTWorldSeries

@Tesla’s #Autopilot being investigated once again following fatal crash in Newport Beach, California. iotworldtoday.com/2022/05/23/tes…

23rd May 2022
IoTWorldToday, IoTWorldSeries

A new Kansas law will enable #driverless deliveries from @Walmart and its partner @Gatik_AI. #AVs… twitter.com/i/web/status/1…

23rd May 2022
IoTWorldToday, IoTWorldSeries

Access a world of opportunity in 2022 with @IoTWorldToday ➡️ Now is time to unlock ROI, by accessing a global com… twitter.com/i/web/status/1…

23rd May 2022
IoTWorldToday, IoTWorldSeries

3D Home Printer to Build 72 Residences for National Homebuilder dlvr.it/SQhWSF https://t.co/XJOs70DqzH

19th May 2022
IoTWorldToday, IoTWorldSeries

Microsoft Ramping up Cybersecurity Service Offerings dlvr.it/SQhPR0 https://t.co/nYzaDRnyVY

19th May 2022
IoTWorldToday, IoTWorldSeries

IoT Product Roundup: PTC, Nokia, Arm and More dlvr.it/SQhNNF https://t.co/ZApdw3RHdu

19th May 2022

Newsletter

Sign up for IoT World Today newsletters: vertical industry coverage on Tuesdays and horizontal tech coverage on Thursdays.

Special Reports

Our Special Reports take an in-depth look at key topics within the IoT space. Download our latest reports.

Business Resources

Find the latest white papers and other resources from selected vendors.

Media Kit and Advertising

Want to reach our audience? Access our media kit.

DISCOVER MORE FROM INFORMA TECH

  • IoT World Series
  • Channel Futures
  • RISC-V
  • Dark Reading
  • ITPro Today
  • Web Hosting Talk

WORKING WITH US

  • Contact
  • About Us
  • Advertise
  • Login/Register

FOLLOW IoT World Today ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookies Policy
  • Terms
Copyright © 2022 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X