Wearable Technology - In Search of a True Purpose?

Smart watches and the whole category of 'wearable technology' is nothing new but has been given a big boost ever since Apple launched its (rather underwhelming, in my opinion) version of  the gadget late last year. Like with their previous products such as the iPhone and iPad, it caused various industries to break into a frenzy to find an application for the gadget within their specific field.

Alas, what most industries have come up with so far is more gimmick than true improvement.

In the hospitality industry, some of the big hotel chains have introduced a smartphone app that lets guests unlock their rooms with a simple swipe - which is genuinely useful and even environmentally friendly. A smartphone does not count as wearable technology I hear you say? Ah yes, but when you load that app on your smart watch it is. Tick the box.

Westin's RFID wristband

But more wearable-centric apps are being launched as well. Westin provides sleep-sensing wristbands that, along with an app, track sleep patterns and provide virtual coaching. A Spanish hotel chain has launched what amounts to an updated version of the Club Med's Bar Beads. Their guest bracelets open guest rooms, pay for meals and automatically enter you in the nightly raffle. Useful? Maybe. Creepy? Definitely. 

Some enthusiasts have said that these new gadgets "utilise new technology and aid guests’ wellbeing".  What's worrying here is the order of importance: shouldn't the well being of guests come before utilising new technology?

The Innovation Dilemma

Every industry is grappling with the innovation dilemma: how much innovation do I need to introduce at what point in time to stay relevant and competitive without annoying my customers?

Take the automotive industry. It's not only Google's driverless cars that are set to radically change the way we view cars. All major car manufacturers have set up shop in Silicon Valley with the explicit aim to innovate the driving experience.

BMW's augmented reality glasses

A recent article on this topic pointed out BMW’s plans to launch augmented reality glasses that allow drivers to see through the side of their cars when parking. While this may be useful if reverse parking is giving you nightmares, the article warned that “the auto industry must be careful not to overhype the importance of some of these innovations and lose focus on what matters to consumers most." This specific device seems to be the equivalent of Westin's virtual coaching wristband — do you really need it?

Innovate it and they will come... but when?

It's not that innovation in itself is incapable of delivering the spark that turns the invention into something genuinely and ground-breakingly useful. But the cause and effect might not always be immediate - far from it.

Graphene: extraordinary properties - limited use

A great article in the New Yorker on graphene made this very clear. Graphene is a feted material that has amazing properties but aside from tennis rackets, no one has yet worked out what it can be used for. That article also quoted the graphene of the 18th century, aluminium, which had a lowly existence as the material pots and pans are made of before the advent of aerodynamic flight finally gave it its truly innovative  purpose.

What this shows is that innovation exists in a larger context that includes not only technical capability, but also socio-economic and cultural influences. It is only when all these stars align that true, groundbreaking innovation takes place - and it may take a very long time after the discovery is made for it to occur.

Meanwhile, there's nothing wrong with tinkering with all of these new technologies, as long as it doesn't compromise the core experience for the consumer.

Or, to quote Gül Heper commercial manager of Swedish hotel brand HTL in an article on wearable technology: “It has to be relevant; it has to be engaging; and it has to be something that makes the hotel experience much better and on the best terms. We try to remove all the gimmicks.” 

Integration Capability is the Winning ‘Gene’ in Technology Evolution

We were recently involved in a pitch to a hotel for an in-room entertainment system that went from straight forward to utterly confusing within two rounds of presentations and demonstrations by all invited vendor parties which ended up paralysing the hotel’s decision making process. What happened? The short answer is: technology chaos.

The problem hoteliers are facing is how to make sense of a today’s Information Systems which are increasingly a chaotic mix of applications, interfaces and operating systems with their respective advantages and disadvantages and are by no means compatible. So which one to go for? Which one is flexible enough to serve hotels’ increasingly complex and continuously changing operating environments?

The answer is surprisingly easy to find with a little research around current mainstream technologies.  But in order to do that, let’s define what mainstream is first: in short, it’s integration capability that results in mass adoption. Similar to Darwin’s evolutionary theory, a technology’s trajectory is largely determined by how much it is able to adapt to changing circumstances, or in other words, its capability to integrate with new and improved technology variations as they appear.

Pushed to the sidelines: Betamax

Of course, technology is not some organism and moves in much faster and more haphazard ways as everyone who remembers the Beta vs VHS technology battle can attest. It can be wholly unpredictable at the cutting edge – think the phenomenal and utterly unpredicted success of the iPad – and entirely predictable at the tail end of consumer adoption (anyone doubted the success of iPad 2 and 3?).

Which brings us back to how we should determine what is and isn’t mainstream technology. There are two parts here that need to work in sync: the front end, or user interface, and the backend, or operating system. And looking at adoption levels of both gives a pretty good insight into what ‘mainstream’ constitutes at this point in time.

At the user interface, the performance of tasks is commonly managed by application software. While application software has always been the link between the operating system and the user (think accounting software, office suites, graphics software etc), it’s mobile Apps that really changed everything. And when Apple opened its platform for app developers and then the AppStore to help iPhone users turn their phone into a mini computer full of apps, that’s when the platform truly became mainstream. Now, as Apple says so aptly on their website, there’s an app for everything. Apple’s application store sells the most apps (not a shocker), carrying over 225,000, with more than 4 billion apps downloaded from Apple alone (the second largest app market – Google’s – doesn’t release comparable figures).

So here it is then: the more open for integration the platform, the more app developers it will attract, which in turn will draw more people to buy the mobile device running that particular platform. The future winners of the technology evolution are likely to be decided by just this openness of integration.  That’s what’s called mainstream.

Looking at the current canon of technologies that are dominating the enterprise and consumer landscapes, Android and Apple, or iOS, appear to be winning the race to becoming the dominant system operating technology standard, specifically for mobile devices, which are increasingly dominating all walks of life.

All of this also matters to hotels of course. Technology as a whole is increasingly pivotal for hotels on all levels, from interior room design to revenue management, so betting on the wrong technology horse may result in some nasty injuries later.

As an example, let’s look at some technologies that are commonly going head to head in in-room technology systems these days: STB-based systems, and those based on thin client-integrated technologies such as XBMC.

If you apply the mainstream test to both, it’s pretty clear that STB is as bona fide mainstream as you can get. XBMC, on the other hand, is a niche product that is used by a handful of customers, has very limited integration compatibility and is consequently very likely to have a finite development path. The latest STBs today are typically based on an HTML5 front end client. XBMC on the other hand is based on their own proprietary thin client, which provides an optimised front end performance but at the considerable price of integration and customisation flexibility. And as STB performance improves, even the front end performance advantage of a thin client will vanish. 

Say hello and wave goodbye: HTML5 has regaled Flash to history

The fact that Adobe sacrificed Flash for HTML5 is an early indicator that HTML5 will prevail and push most others (including XBMC) that have a boutique ecosystem to support its ongoing evolution to the sidelines.

While the current chaos of technology advancements makes it considerably harder than just a few years ago to predict what the next breakthrough consumer device, entertainment delivery platform or social obsession will be, it is clear that for the foreseeable future the delivery mode will be Apps, based on open technologies and accepted by the mass market. So hotels should ensure they decide on a platform that meets these attributes.

Really, there is no free lunch. Not even for OTT in Hotels

The recent HTNG Awards for “Most Innovative Hospitality Technology” went to Philips MediaSuite Hotel TV, which says it offers hotel guests online apps like YouTube, Twitter, Facebook, Catch-up TV, local and international news, weather, games and more. In their marketing blurb, TP Vision, who owns Philips’ hotel business in EMEA, claims that with their system “there is no longer a need for a set-top box or heavy head-end investments, reducing the total cost of ownership for a hotel.” 

If only. Of course, eliminating the set top box and head-end equipment is a very attractive proposition for hotels. But, as I said in a previous blog, the scenario of removing a set-top box or head-end is simply not realistic, and won’t be for some time to come. 

To illustrate just how far away Philips and similar OTT-based solutions are from providing a viable option for in-room entertainment for hotels, you only need to do some simple maths around bandwidth requirements for the various services offered on an OTT-based hotel solution.

Sure, social media apps don’t take up a lot of bandwidth, and even VoD is manageable with a streaming bitrate of 2 Mbit/s for SD, and 8Mbit/s for HD. Assuming that the maximum viewing concurrency doesn’t exceed 10% on average, this will require a 250 rooms hotel to have a 50Mbit/s – 200Mbit/s pipe to meet this type of viewing behaviour.   

But TV is where the bandwidth issue becomes more perilous.  If a similar traffic model is applied to a cloud-based TV channel delivery service to a hotel room, the bandwidth requirement would be at least 3 to 4 times higher than for VoD.  So hotels are looking at 150Mbit/s – 800Mbit/s they have to provide to ensure reliable delivery of broadcast quality TV channels to their guests – a big challenge to any hotel in developed countries as it comes typically at a big cost.

According to industry analysts, video currently consumes 29% of network bandwidth, which is predicted to increase to 40% within the next year. However, the same analysts say that the operators they surveyed so far have only set 10% of their network capacity aside for video technologies. But even where investment in FTTH and other infrastructure technologies eases the issue of bandwidth availability, the cost to actually provide the service reliably and offer hotel guests the QoS they expect, will remain prohibitively expensive for a long time to come. And this of course negates the supposed savings suggested by doing away with the traditional walled garden equipment.

And let’s not forget the increasing wariness of network owners about the demands the influx of these bandwidth hungry OTT services have on their infrastructure. South Korea’s KT has been very vocal in chastising big technology companies for free-riding on their networks and has warned of a “big data blackout” if OTT players don't agree to help pay for the rapid growth in data traffic that they are contributing to. 

There is a reason why network operators are nervous about this. A network provider typically pays a price per m/bit far in excess of the charges it passes on to its end customers, hotels included. This is because the retail market is not prepared to pay the same price per m/bit, particularly in Asia, where upstream costs can be as high as US$18 per m/bit. So in order to hedge against this imbalance, network providers use something called over-contention. It’s a bit like the common practice of airlines selling more seats than they have available to minimise empty seats. For the most part it works, but occasionally, for whatever reason, some passengers have their travel plans thrown into chaos. Translated to the hotel business, this means that in-room entertainment QoS cannot be guaranteed, which is probably not the type of experience you want to expose your guests to.   

So unless the day comes when hotels are willing to pay for the bandwidth required or the cost for a 1,000Mbit/s pipe goes down to today’s cost of a 10Mbit/s pipe, OTT in a hotel environment remains only really a best-effort delivery of long-tail content.  

In the light of these issues it is puzzling to me why HTNG would give this technology its stamp of approval as its most innovative technology. What is and isn’t innovative may be debatable, but in my mind, a technology that is endorsed by an industry body should be a viable solution, not a piece of wishful thinking that for the foreseeable future remains out of reach for most hotels.