Aaron Ardiri
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Internet of Things (IoT)

RIoT Secure AB


There is no such thing as a "free lunch" - is the free attitude of IoT coming to an end?

I received an email yesterday from the CEO and founder of codebender.cc - a website that was launched to allow the sharing and collaboration of writing code for IoT projects, was going to shutdown its free service. The motivation? Running a cloud service like this costs money and with investment either drying up or more competition entering the market space - who will end up paying for it? Is this the beginning of the end of free services for IoT in the cloud?

If you do not know the expression - "there is no such thing as a free lunch" - now you do.

  • In a nutshell, we've been unable to create a sustainable business model around codebender.cc, and we simply can't afford to pick up the tab for running the site out of our own pockets anymore (did you know it costs $25K/month to provide our service?).

    source: codebender.cc email from CEO and founder

While it is unfortunate that codebender.cc is planning to shutdown it's free service, how dependent are IoT developers coming on free services in the cloud for not only learning how systems work, developing and compiling firmware online, but what about those who handle the distribution and maintenance of such IoT services? Will your IoT devices become stagnant while deployed?

Unfortunately; this is a trend in the start-up ecosystem - the typical life-cycle of a startup:

  • * conceive idea
    * prototype, run on bootstrap funds
    * offer service for free, attract users
    * repeat
      * approach investors, get funding
      * pay salaries, build team, expend offering
    * until ((sold) OR (lack of funding))
    * if (sold) merge into new company else bankrupt and shutdown

I've seen this time and time again; heck, I have been part of some startup companies that are still operating with the same mentality. It is fun while it lasts; but, at some point - being a founder, you end up diluting your ownership as more and more funding comes in. The biggest failure is not developing an appropriate business plan such that you can become independent of funding.

We all have good intensions; heck, forbes.com has even posted tips on how to prepare to be in the 10% of startups that actually make it (yes, 90% of startups will fail). But what does that mean for businesses that launch new products that are dependent on such services or have forced tie-ins due to the IoT hardware/services that they build upon?

As an example; lets say you retrofitted your rental house property - where you have hundreds of tennants per year, with an IoT based electronic locks that utilize a free cloud service to remotely change the PIN code for access (as new tenants arrive). Everything will work as expected until that cloud service shuts its doors because it ran out of funding - are your locks useless now?

I guess all it comes down to picking the right IoT companies to work with or look for ones that actually have a sustainable business model so they can survive. I have always found that it is better to control all parts of the process - but hardware, cloud services are so freely available it is difficult to justify re-inventing the wheel and there is tendency to use what is available for free.

Creating an startup or offered options in one? Remember this - 10% of nothing, is still nothing.


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