How upset should you really be about Insteon’s subscription plans?

On our recent IoT Podcast, we mixed things up a bit and didn’t take a question from our IoT Voicemail Hotline. Instead, we answered a question that we received by email and Twitter from a number of smart home owners. It seems that people want to know what we think about Insteon now charging an optional subscription fee. Some Insteon device users are understandably upset by this new subscription plan. However, we think it’s important to understand that hardware sales alone aren’t often enough to pay a company’s bills.

To recap the situation, Insteon hubs lost access to the Insteon servers in April. Then, seemingly out of nowhere, the servers were resurrected in June, with no communication from the company. So that’s a happy ending to the story, right? Not quite. Insteon’s assets were purchased in an effort to keep the services alive. And to do that costs money. Insteon has to maintain cloud services for those hubs to work with other services and to provide remote access to its users. And that’s where the new subscription plans come into play.

Insteon offers a one-year plan for $39.95, or two years for a reduced annual rate of $69.95. Subscribers gain remote and mobile app access to Insteon Hub, email and push notifications, and voice assistant integrations. Customers who don’t want or need those features can skip the plan and use all of the local features offered by the Insteon Hub.

Again, we understand that having to pay for things you previously didn’t have to pay for isn’t appealing. And it’s not Insteon Hub owners who should be blamed here. Any connected device company in the smart home space needs to factor in cloud service costs in its business model. These are recurring expenses that are difficult, if not impossible, to predict.

The alternative, however, is worse.

If Insteon couldn’t afford its ongoing cloud costs, it could have simply gone out of business. Which it essentially did only to be rescued with a third-party purchase. If it hadn’t been rescued, there would be no subscription plan to pay, but also a huge reduction in capabilities. So much so that we offered alternative platform suggestions for users with useless Insteon Hubs in April. At least now there’s an option to keep using Insteon gear which many have already invested in.

Yes, there’s a monthly fee if you want what I’ll call “premium services” now. No, I wouldn’t be happy about that either. But I also understand that as empowering as the cloud is, it’s not free. And when a company such as Insteon was part of the smart home industry well before cloud computing went mainstream, it’s difficult to fault the company’s lack of planning for cloud computing.

To hear our discussion and thoughts on this in full, tune in to the IoT Podcast below: