Smartphones, smart cars, smart refrigerators… IoT has rapidly entered our lives aiming to connect almost everything around us. But what about monetization of IoT? Many companies have adopted IoT, but only a few of them have been able to successfully gain revenue from digital transformation projects and the heavy investments they’ve made.
Cisco predicts that Internet of Things revenue will rise to about $19 trillion in a few years. If you’re curious to know how businesses manage to earn millions of dollars, then keep reading.
Yes, certainly. There are three main entities that are taking advantages of IoT today:
In this article, we’re going to focus on the third entity, i.e., businesses.
We’ve witnessed a major paradigm shift of businesses from traditional methods to the latest technologies. Most companies are jumping on to the digital transformation bandwagon and adopting new ways of doing businesses for good reason. But according to a Capgemini report, less than 30% of organizations generate service revenue from their connected products. So let’s see how you can turn your IoT efforts from investments into a revenue generator.
By focusing on one or more of these models can help your business to monetize your IoT solution.
1) Come up with a new business model
2) Connect your assets/products
3) Turn data into revenue
4) Leverage IoT marketplace
You can come up with new ideas to service your customers, which will create a regular revenue stream. For example, you can offer additional features along with your regular products/services. As you establish a strong relationship with your customer in the long run, you can offer them additional features/plans to extend the product functionality.
Connecting your assets or resources is one of the popular and easiest ways to generate revenue from your IoT implementation. This means that you can make your existing products IoT-enabled and build mobile apps to monitor and manage your assets remotely. This delivers new opportunities to add additional features and sell your products with premium prices, and therefore enabling bottom line growth.
We all know that data is at the heart of value generation for the IoT ecosystem. Mainly, businesses use collected data to improve processes, efficiencies and services/products. But IoT can do much more than that; it creates data flows which can be used to generate a regular source of revenue. Today, many companies have adopted a model of collecting and selling data to make money out of it.
IoT market enables you to easily iterate your smart solutions as necessary and leverage digital ecosystem community. This not only provides you pre-built analytics and integrated marketing tools but also offers global visibility and accelerated time-to-market.
On top of IoT monetization models, you can use different pricing models for your services and products to generate revenue. Here’re the most popular pricing models.
In this model, a business gives limited access to the user while offering options to pay for premium features.
With this model, you can charge your customers monthly based on what services they’ve subscribed on top of basic services.
It’s a very simple and wide-spread model wherein customers will pay a one-time fee to use a product or service.
This is another popular and value-based model in which the user can see its effectiveness right away. However, customers don’t have to pay beforehand, meaning that they will only pay for the results obtained due to the IoT product.
In this model, you charge users based on their usage of the product or services. Earlier this model was difficult to implement; however with IoT, it’s viable to deploy such a model.
This solely depends on the services and products of your business. However, we’ve jotted down some points that will help you make the right choice.
There are many opportunities to monetize IoT if implemented correctly. While many organizations have already created a regular stream of revenue, some projects do also fail because of a wrong start. If you’re stuck somewhere in your IoT journey or not sure how to get the right start, you can participate in our upcoming IoT workshop.
In this whitepaper, we have covered some important elements you should consider when looking to transforming your business model.
Avnet and Intel have developed an on-demand training to give your business a boost on your next IoT journey.