The Internet of Things can help a number of industries thrive. The Internet of Things can improve efficiency and productivity as it connects everyday machines via the web - but it cannot create value out of nothing. It requires significant innovation, greater investment, and broader participation in every industry where it is poised to have an impact. The IoT draws from multiple disciplines in order to build something greater than would be possible through siloed innovation; as a result of its deployment, technology providers can see increased hardware and service sales, marketing firms can grow through improved analytics, and consumers can directly benefit through improved health and wellness monitoring, or by reducing monitored fuel consumption. While there is a continual need to innovate via the IoT, and to capitalize on its power to disrupt, its greatest potential is to create sustainable, shared value. For example, smart thermostat providers can turn a profit through an initial sale and subsequent offering of data analytics, while the homeowner buying the device can reap monthly savings from smart energy management and improved consumption data. Meanwhile so-called conversational commerce conducted with businesses by that homeowner via devices on his or her walls and shelves, can drive retail sales and create ongoing customer relationships. Vehicles that are connected via the Internet of Things can collect data about themselves, help dealerships proactively schedule required maintenance, and improve efficiency while streamlining auto manufacturers’ spare parts supply chains. Governments can meanwhile partner with technology companies to form public-private partnerships to draw capital investment needed to build infrastructure that utilizes the IoT to improve public services. An important part of drawing this investment is an ability to change conventional business models. For example, what was once a one-time sale can become a service models; for proof of this, look no further than to the IoT-fueled transition from selling individual vehicles, to car sharing, to shared mobility services, and eventually towards autonomous mobility services. Subscription-based services can also pair seemingly dissimilar technologies together to create more value both for the companies selling them and for the people buying them - for example, by coupling an internet-enabled smoke detector with a home security webcam. Data analytics is another disruptive business model ingredient stemming from the IoT, where so-called “information exhaust” (the data footprints we leave online by using sites and services) can be turned into insights to develop better products or target ad campaigns. To be sure, though, only a balanced and transparent approach to making use of this data is appropriate.
IoT Value Creation and Business Models
Internet of Things