The internet of things is expanding its reach! Early last year, Gartner calculated that around 8.4 billion IoT devices were in use in 2017, up from 31% in 2016. It also noted that this number is set to reach 20.4 billion by 2020. In terms of spending, IDC predicted that total expenditures will hit $1 trillion in 2020 and $1.1 trillion in 2021. It’s clear that now’s the time to start monetizing your business for IoT, that is, if you haven’t already begun. But what steps should you take to get there?
1. Have a firm grasp of your business model — and nail the fundamentals
Ultimately, everyone wants to drive revenue and create profitable IoT offerings. That will come from new digital business models and operational efficiencies. BUT, the best business model won’t help when you don’t get the basics right:
- Ship a secure product that’s free of vulnerabilities. Then, monitor and manage vulnerabilities during the device lifecycle. Literally every IoT offering uses open source components, but only a few suppliers manage them diligently.
- Implement a licensing and monetization technology that enables you to actualize new business models, deliver software and updates to devices, capture device and usage insights, and manage compliance.
2. Make it customizable
Use the power of software to differentiate devices and activate premium features for customers at the push of a button. Flexible activation of features is the key that differentiates a smart device from a dumb one. Your customers will appreciate the flexibility and the accelerated time to value.
3. Use the value of data and insight
A successful digital business model is based on insight. When thinking of IoT and data, many just think of the process data that comes back from sensors. But there’s more: Which device is using what software? And which customer is using what and how much? By aggregating device, software, customer and usage data, you build the groundwork for strategic decisions and future business success. You can proactively react on status changes on devices and serve your customers better. And, most importantly, you can also make better decisions for the future because you know exactly how your products are being used.
4. Monetize the full IoT stack while keeping your customers top of mind
Start monetizing the value of software and be smart about it. Build packages that can be consumed as a service, rather than monetizing components of your IoT offering differently or, in some cases, not at all. One thing’s for sure — recurring revenue models like subscription will outpace the more traditional models. With this trend, a close customer relationship is more important than ever. Know what your customers are using, measure the value they’re getting from it and act at the right time when you identify growth potential or attrition risk.
All you need to embark on this journey is a software monetization platform. So, what are you waiting for?
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