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How smart technology gets you to continue paying long after point of sale

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A common criticism of virtual assistants like Siri, Alexa, and Google Assistant is that they are always on, always listening, and always connected to the internet. It’s the only way they work.

For consumers who are rightfully skeptical of how tech companies big and small are collecting, analyzing, and making money off their data — even in anonymized form — the sudden proliferation of these always-connected smart devices is concerning. But there’s a reason that everything from televisions to cars are suddenly getting smarter.

For consumers wondering why it might feel increasingly harder to buy something dumb or disconnected, the reason is partly technical. Some of the products users enjoy today wouldn’t be possible — or, as good — without a connection to the internet.

But it’s also about money. With product margins thinner than ever, more companies are either re-building their old hardware businesses around online subscriptions, or monetizing data from people who are using their products for free.

In other words: giving every dishwasher, thermostat, and SUV an internet connection is one way for companies to keep making money after someone buys their product — whether through regular subscriptions, data collection, or some combination of the two.

As long as people believe they’re getting value — say, the convenience that smart speakers promise — they’re more willing to accept this new reality, according to Adam Wright, a senior analyst at the market research firm IDC who focuses on connected devices for consumers.

“People are increasingly becoming more comfortable with relinquishing a certain degree of privacy in favour of cheaper devices, cheaper services, better services, personalization, recommendations, things like that,” said Wright.

While it’s unlikely that every toaster or doorknob will eventually be smart, given the opportunity to make more money, it’s not hard to understand why companies are giving so many previously dumb products a tiny computer brain and an IP.

Knowledge in the cloud

Smart speakers and virtual assistants are a good example of this dichotomy in action.

Anytime you ask Google Assistant to set a timer, or Amazon Alexa to play one of your favourite songs, a recording of your voice is transmitted to a server in the cloud. The recording is analyzed to determine what you said, and the assistant figures out how to respond.

It’s technically possible to build a voice assistant that is able to recognize your voice and respond to basic queries offline — or, at the very least, without sending your recordings to a server in the cloud. But Allan Black, a professor at Carnegie Mellon University’s Language Technologies Institute, said it’s harder to offer a cutting-edge experience this way.

Some smart appliance makers will share information about how you use their products with third party businesses, who might then send you offers for things like detergent. (Rick Bowmer/The Associated Press)

For one, a connected voice assistant has access to all of the latest news, sports, weather, and other frequently updated information that would be impractical to store offline.

Recordings from millions of users of all different ages, genders, languages, and dialects can be used to make the voice recognition more accurate than from one person’s data alone. And all that data can help the assistant’s maintainers identify popular questions that haven’t been answered yet — or personalize answers to particular users.

Black acknowledged the “non-trivial privacy issue” of sending everyone’s data to the cloud. But “it would be much harder to get that benefit of these improvements if you only have it local and it’s never shared,” he explained.

Of course, doing all that work in the cloud doesn’t just make the experience better for users. It also gives the likes of Amazon and Google valuable insight into their users’ preferences and behaviours — data that can be monetized one way or another. Other companies have realized this, too.

Recurring revenue

U.S. manufacturer Vizio sells inexpensive televisions. How does it afford to do this? By sharing information about how people use their TVs — and what they watch — with other companies, essentially subsidizing the product’s cost.

“It’s not just about data collection,” said the company’s chief technology officer, Bill Baxter, in an interview with The Verge earlier this month. “It’s about post-purchase monetization of the TV.”

Most people don’t upgrade their TVs very often — Baxter said the average lifetime of a Vizio TV is 6.9 years — and Vizio only makes a slim margin on each sale. But those TVs keep getting new features and updates for free. So (opt-in) data collection is one way for Vizio to keep generating revenue in lieu of new sales.

“Margins are getting thinner and thinner, and they have been for a long time. And that’s applicable to, obviously, auto manufacturers, TV manufacturers, and everything in between,” said Wright.

“They don’t make a lot of money off the devices, so they rely on volume and other ways to make their money.”

U.S. TV maker Vizio sells inexpensive products. To make more money, it also collects and sells anonymized data on how people use their TVs and what they watch. Users have to opt-in first, however. (Rich Pedroncelli/Associated Press)

Already, car companies are collecting data on people’s driving behaviour and location in order to send them special offers and discounts — a market worth up to $750 billion US by 2030, according to a recent Wall Street Journal article citing McKinsey & Co. data.

Similarly, appliance maker Whirlpool said in its privacy policy that the company “may send you a notification when your Smart Appliance needs to be replenished with a refill or replacement item and offer to direct you to a third-party business partner from which you can purchase that item.”

Subscriptions are another way companies continue to profit from sales of smart technologies. Wright points to camera companies that now make money selling photo storage in the cloud, and wireless router companies that sell protection against threats like malware — both subscription based, of course.

Increasingly, buying a product seems to come with an ongoing relationship with that product’s manufacturer  — one that sometimes turns our data exhaust into a product of its own — but none of this seems to have fazed consumers much, according to Wright.

“Consumers are sort of like frogs in the boiling pot, right?” said Wright. “It’s amazing what we increasingly find comfortable when the initial shock has worn off.”

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The ‘Maple Majestic’ wants to be Canada’s homegrown Tesla

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Look out Tesla, Canada has a homegrown electric sedan on the way. Well, that’s if AK International Motor Corporation can drum up enough investment to make its EV a reality. Dubbed the “Maple Majestic,” the vehicle is a battery-electric designed to “excel in extreme climate performance without adversely affecting the climate, as befits a vehicle from Canada,” according to its website.

What’s in a name? — The company says the maple leaf is a “symbol of Canada’s warmth and friendliness towards all cultures,” while “majestic” refers to the country’s “status as a Constitutional Monarchy.”

That patriotism carries over into Maple Majestic’s parent company’s lofty goals. AK Motor founder Arkadiusz Kaminski says he wants the company, which he founded in 2012, to become “Canada’s first multi-brand automotive OEM,” and that the “Maple Majestic is intended to be Canada’s flagship brand of automobiles on the world stage.”

Partnerships are key — “We acknowledge that the best chance for the Maple Majestic brand to succeed, lies in continuing to build the relationship with Canada’s parts suppliers and technological innovators, whether they be academic institutions, corporations, or individual inventors,” the company explains. “We are currently seeking partners in automotive engineering, parts manufacturing, automotive assembly, electric propulsion technology, battery technology, autonomous technology, and hybrid power generation technology.”

In other words, don’t expect to be able to buy a Maple Majestic any time soon… and don’t expect to pour over 0-60 mph times, power output, range, or other key stats, because those don’t currently exist. For now, all we have are pictures and a short video clip. But at least those are arresting.

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PE-backed Quorum Software to merge with Canadian energy tech firm

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Houston-based energy technology company Quorum Software will merge with a Canadian tech firm to bolster its presence in oil and gas services.

Quorum announced Feb. 15 it plans to merge with Calgary, Alberta-based Aucerna, a global provider of planning, execution and reserves software for the energy sector. The combined firm will operate under the Quorum Software brand.

Gene Austin, CEO of Quorum Software, will continue in his capacity as chief executive of the combined firm. Austin, former CEO of Austin-based marketing tech firm Bazaarvoice Inc., became CEO of Quorum in December 2018.

Aucerna co-founder and CEO Wayne Sim will be appointed to the Quorum Software board of directors. Both companies are backed by San Francisco- and Chicago-based private equity firm Thoma Bravo.

“Over the last 20 years, Quorum has become the leading innovator of software deployed by North American energy companies,” said Austin. “Today, Quorum is expanding the scope of our technology and expertise to all energy-producing regions of the globe. Customers everywhere will have access to a cloud technology ecosystem that connects decision-ready data from operations to the boardroom.”

In addition to the merger announcement, Quorum Software announced it had entered into an agreement with Finnish IT firm TietoEvry to purchase TietoEvry’s entire oil and gas business. The agreement, which includes hydrocarbon management, personnel and material logistics software and related services, is valued at 155 million euros, or $188 million, according to a statement from TietoEvry.

“Our three organizations complement each other — from the software that our great people design to the energy markets where we operate,” said Sim. “Our new company will be able to deliver value to our stakeholders, while accelerating the growth of our combined business and the energy industry’s software transformation.”

The combined company will serve over 1,800 energy companies in 55 countries, according to the announcement. With its headquarters in Houston, Quorum will continue to have a significant presence in Calgary and in Norway, the headquarters for TietoEvry’s oil and gas software business. Quorum will have other offices throughout North America, Latin America, Europe, Asia and the Middle East.

As of Sept. 30, 2020, private equity firm Thoma Bravo had more than $73 billion in assets under management. In late December 2020, Thoma Bravo agreed to acquire Richardson, Texas-based tech firm RealPage in a roughly $10 billion acquisition.

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Piece of Kitchener technology lands on Mars on Perseverance rover

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KITCHENER — A piece of Kitchener technology has landed on Mars, thanks to NASA’s Perseverance rover.

The rover settled on the planet’s surface on Thursday afternoon. It’s been travelling through space since it was launched from Cape Canaveral, Fla. in July.

“The whole idea of being on a device that we’re sending to another plant with the express mission of looking for traces of past life, it’s pretty mind boggling actually,” said Rafal Pawluczyk, chief technical officer for FiberTech Optica.

The Kitchener-based company made fibre optic cables for the rover’s SuperCam that will examine samples with a camera, laser and spectrometers.

“The cables that we built take the light from that multiplexer and deliver it to each spectrograph,” Pawluczyk said.

The cables connect a device on the rover to the SuperCam, which will be used to examine rock and soil samples, to spectrometers. They’ll relay information from one device to another.

The project started four years ago with a connection to Los Alamos National Lab, where the instruments connected to the cables were developed.

“We could actually demonstrate we can design something that will meet their really hard engineering requirements,” Pawluczyk said.

The Jezero Crater is where the Perseverance rover, with FiberTech Optica’s technology onboard, landed Thursday. Scientists believe it was once flooded with water and is the best bet for finding any evidence of life. FiberTech’s cables will help that in that search.

Ioannis Haranas, an astrophysicist and professor at Wilfrid Laurier University, said the rover isn’t looking for “green men.”

“They’re looking for microbial, single-cell life, any type of fossils and stuff like that,” Haranas said. “That’s why they chose a special landing site. This could be very fertile land for that.”

“It’s very ambitious,” said Ralf Gellert, a physics professor at the University of Guelph.

Gellert helped with previous rover missions and said it’s the first time a Mars rover has landed without a piece of Guelph technology on it. While he’s not part of Perseverance’s mission, he said the possibilities are exciting.

“Every new landing site is a new piece of the puzzle that you can put together with the new results that we have from the other landing sites,” he said.

“It’s scientifically very interesting because, even though we don’t have an instrument on that rover, we can compare what the new rover Perseverance finds at this new landing site,” he said.

Now that Perseverance has landed on Mars, FiberTech is looking ahead to its next possible mission into space.

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