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Can You Corner a Market Without Hurting Your Customers?

April 21, 2020
5 min read

In recent years, there’s been a trend in the agricultural industry of “tractor hacking,” where American farmers hack their IIoT-powered tractors with outside firmware to be able to make quick repairs when something unexpectedly breaks.

The farmers are doing this because farm equipment manufacturers have installed protocols on the tractors that prohibit “unauthorized” repairs (i.e., repairs that have not been personally approved by the manufacturer’s certified technicians).

Farmers say that when a machine goes down, they don’t have much time to lose before the entire operation – and their income stream – is compromised. While they could call an approved technician from the tractor manufacturer, it’s not worth the time lost and the fees charged in between breakdown and repair. Instead, they’re hacking their tractors with Ukrainian or other firmware to make it possible to complete unauthorized repairs quickly and get back to work faster.

The issue is bigger than just a few rogue farmers, too – do an internet search for “tractor hacking,” and one of the top results links to an open-source Git repo dedicated specifically to hacking John Deere tractors.

Others are taking political action against the corporations, lobbying for right-to-repair legislation that would require manufacturers to publicize service manuals and authorize outside technicians to repair equipment.

Critics of the farming equipment manufacturers’ policies say the companies are doing the wrong thing for the customer and ask if it’s worth the negative PR, brand damage, and political battles. Why would these companies knowingly antagonize some of their biggest customers?

The answer, it turns out, is a little more complicated than “corporate greed.” Farming equipment manufacturers have some huge financial and legal considerations to take into account that are also relevant outside the agricultural space.

As makers of IoT products ourselves, we think it’s worthwhile to examine how we got here and explore ways that companies can grow profitability while still making the right choices for their customers (and protecting customer loyalty in years to come).

Monopolies, Liabilities, and System Interop

Why would a tractor manufacturer make it so that unauthorized repairs could essentially brick their product? After all, even companies like Apple – notorious for not approving outside repairs to iPhones – don’t necessarily cause the phone to shut down following an outside repair. If you want them to honor the warranty, however, you’re out of luck.

The biggest difference here between Apple and a company like John Deere is liability. With the exception of a few exploding Samsung Galaxies, a phone malfunctioning after an unauthorized repair doesn’t typically pose a huge threat to the public. Tractors, however, are capable of medium to large-scale destruction of property and even the lives of animals and humans.

Additionally, because of the way these tractors are architected, there’s a higher risk that making a repair or adjustment to just one piece of the system could affect other parts of it in unknown ways. In an ideal world, each piece of the system would be isolated so that they could be managed independently of one another, but to do this would introduce a lot of engineering complexities and product certification requirements that are challenging to navigate.

The result is that if you make an adjustment to the speed limit on your tractor, for example, and the unmanned GPS causes it to run into your house because of your repair or hack, the manufacturer does not want responsibility for the damage. Rather than allow you to install your own parts and software onto the tractor and introduce all of that risk, the company instead retains control over all parts of the system.

It’s true that to avoid this issue, a company like John Deere could approve certain outside trusted vendors to complete the repair work and install their own compatible software on the tractors, allowing liability to be transferred to those vendors for software malfunctions.

Realistically, however, most corporations are not going to want to leave that kind of money on the table for other companies to claim. And customers, as frustrated as they may be with the status quo, are not switching to other brands because of the associated labor and cost to do so – not to mention that, IIoT issues aside, John Deere still offers high-quality products.

Improving the Customer Service Model

Another option for farm equipment manufacturers would be to improve their existing service models. They could hire more approved technicians located near their customers to improve response times or adjust fees associated with repairs. They could even explore ways to approve repairs remotely through OTA updates.

While these methods may be associated with short-term costs, they could pave a path to brand longevity. It may be difficult for disruptors to break into the equipment manufacturing space now, but this might not always be true. Companies that stand the test of time are those that find new innovations and use them to delight customers, rather than take advantage of them.

For now, in the absence of many direct competitors, farmers will likely continue hacking until companies provide a better option for customers or instigate more draconian measures to prohibit interference.

Is There a Perfect Answer?

So, if you’re not a Fortune 500 farming equipment manufacturer, where does this leave you?

If you’re in a position where you are or will soon be selling IoT or IIoT-powered products to your customers (and as IoT continues to grow, this is becoming more likely regardless of your industry), it’s generally good to be thinking about ways you can team up with your customers and development partners in a mutually beneficial way.

What advantages can you offer your customers that the industry giants are not?

Could you start to think about the physical goods you’re selling as a platform upon which others can build, the same way that we think about software today?

While there are no perfect answers in a market experiencing such explosive growth, keeping the customer top-of-mind is usually a good place to start.

IoT development is hard. Our clients come to us for answers to their thorniest questions, and we’re always ready to rise to the challenge. If you’d like to partner with us,  tell us more about your project here.