The Business of Commitment

A piece in The Economist suggests that the biggest revolution associated with the arrival of the internet-of-things is that of customer relations.

The combination of the internet and the availability of cheap sensors is permitting manufacturers and service providers to  know their customers in ways which were not previously possible. This is leading to products which adapt or even fix themselves over time.

For example, when Tesla found that some of its cars had a problem with uphill starts, it fixed it by transmitting a software update. Sonos, a maker of music systems, sent out an update which provided its loudspeakers the ability to tune themselves to the acoustic qualities of the room.

The old business model based on the offering of a “fixed product or service” is being rapidly replaced by a flexible form of “commitment”, in which the products and services co-evolve with the needs of the customers.