A few weeks ago, Nest announced that it was shutting down Revolv. You probably don't have a Revolv product, a sort of smart-home hub. It contains seven radios and so speaks almost any protocol of any device you might have. It cost about $300. Nest acquired Revolv in 2014 for the team, and immediately stopped selling the product. At least part of the reason that it is being shut down is that it only has a few hundred users, apparently. But you should be concerned anyway. Revolv is a hardware product: you buy it, you take it home (or more likely get Amazon to ship it to you since you have Amazon Prime), install it, and get it up and running. So far it is like buying a wireless router. But Revolv also depends on a cloud service. Nest are not just announcing that you can't buy Revolv products any more (which they did in 2014), but they are turning off the servers. So if you have a Revolv, then on May 15, next weekend, it will stop working. Since this only affects a few hundred people, the direct effect is minimal and they are getting a full refund anyway. But the implications for the future are significant enough that the shutdown isn't just being covered by specialists. It has been covered by Fortune, Wired, NBC, and probably others I haven't seen. The first question, of course, is whether Nest might do this to other products. They make smoke detectors, for example. What if Nest shuts down the servers? We are all busy and replacing our smoke detectors, no matter how worthy, is probably not priority #1 in our lives. So somebody's house burns down. These are not trivial issues. Let's do a thought experiment. Let's say Tesla goes bankrupt. The cars don't depend on internet connectivity to be driven (at least I hope they don't!). But the software will never be updated again. Or maybe the cars will drive for a time, but eventually turn off for safety reasons if they haven't talked to Tesla corporate for too many weeks. Bricking a few hundred Revolv servers is a tiny event compared to bricking however many Teslas are out there. Or Fitbit. Maybe Apple acquires them and shuts them down to switch them to an Apple Watch. Anyone can play this game, just think of something that is basically a hardware product but requires access to a cloud back-end to be used. There is an implicit commitment in this that the cloud back-end will never shut down. If the company goes bankrupt, the servers will keep running. If someone acquires the company, they will keep the servers running. If the great firewall of China makes operations in China stop working, the company will find a way through. Of course, everyone will promise that they will not do that. Some promises are more plausible than others. Nest is part of the Alphabet group that owns Google. It is hard to imagine Nest being insolvent in such a way that Alphabet would walk away, if only due to the bad publicity for Google, although they have put up with a lot more bad publicity over Resolv than they probably expected. Tesla could be insolvent one day. After all, it is shipping cars at a loss and making it up on volume, as the old saying goes (nearly $20K per car last quarter). They just got 325,000 people to register for their new model. Talk about a Kickstarter (which, by the way, Revolv was). I wish I could think of a way to get strangers to send me a cool $325M for the promise that they can buy something once I've made it. Everyone wants a Tesla just like everyone wants an iPhone. But whereas iPhone is one of the most profitable products in history, Tesla is not yet profitable and is a plaything of rich people, especially in Silicon Valley, and rich governments. (Did you know Tesla was the #1 selling car in Norway due to subsidies? Not the #1 electric car, the #1 car.) It needs to get profitable. As Herbert Stein famously said, "if something cannot go on forever, it will stop." Of course, if Tesla is insolvent, someone is going to buy the assets, so it is clearly just an extreme thought experiment to imagine it might go away. There will need to be some change in industry infrastructure if people are going to be able to have confidence that their device will work for a long time. This probably doesn't matter for some consumer devices that we only expect to last a few years, like smartphones, but how often do you change your fire alarms? Your car? And even if you change your car regularly, the old one is not discarded, someone else drives it. That brings up another issue. What if Tesla doesn't like the person you sell your car to? Or the government? Or it is purchased by a general in North Korea? A parting thought. If you own a car with GPS and internet connectivity (and if you don't now, you probably will soon), then the car company knows where you are. Can they be compelled to tell other people? The police? Your parents if you are a minor? The NSA? A foreign government? IoT makes the fuss about whether Apple can be compelled to unlock your phone for the FBI look simple. Previous: CDNLive: Do You Know What a FIT Is?![]()
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