It’s been a busy year in the world of the internet of things. Gartner predicts there will be four billion new connected “things” in the consumer sector by the end of this year, and IoT Business News estimates we will see around 400 million IoT devices with cellular connections within the same time.
But as we all know, growth at such a rapid pace doesn’t come without its challenges. And while a number of companies have been quick to bring new products and devices to the market, only a handful have done that with monetization in mind.
As we approach the new year, the IoT market will almost certainly continue its upward trajectory. But the onset of new IoT products does not necessarily translate to IoT profits. The question for 2017 is: how can companies make money on this seemingly limitless new market and create a path for long-term sustainability?
In 2016, it became apparent that the “monetization of IoT” still tended to be near the bottom of a company’s how-to-make-money-on-IoT checklist. Still focused on IoT hardware, many companies have been fixated on how to bring their smart devices to market rather than how to make money off these products over the long term.
In 2017, we’ll start to see that approach catch up with companies in this space. The increasingly competitive IoT ecosystem will bring monetization to the forefront, and companies who haven’t yet figured out how to bill for these new products and services will be left behind by those who have. Without an aligned go-to market strategy, the “groundwork” that has been laid merely becomes a blueprint without infrastructure.
One example of an IoT business model that’s seeing success is the “energy as a service” model, which includes being able to control energy assets like lighting and energy efficiency on an industrial IoT platform. By deploying monetization engines that can process things like usage and applicable tariffs on an industrial scale, companies in this space will be able to save millions upon millions of dollars in accurate billing as well as in energy efficiencies.
In addition to deriving revenue out of IoT services, companies that deploy monetization models from the start will be ahead of the curve when it comes to articulating the true ROI of their proposed products and services. With these strategies in place, businesses will be able to justify the true business value — and understand the broader impact — of an IoT initiative. What was once a great idea to a CTO can now be a business model supported by hard data.
As more and more companies bring their IoT technologies to market, the ability to quickly integrate and adapt IoT-specific business models is set to reach a major tipping point in 2017. Figuring out what model works, articulating ROI and understanding how an IoT initiative impacts the entire business will become mission critical for companies looking to emerge victorious in the competitive world of IoT in 2017.
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