Every day it seems, there’s a new buzz worthy entrant into the IoT market – from smart plugs that efficiently connect you to your power source to connected cars that smartly help you avoid would be accidents.
But what if you don’t have an IoT device in the pipeline? What if you don’t have legions of R&D wizards at your beck and call? What if your business has nothing to do with smart homes, smart cars, or any of the other industries currently being heralded as first movers in IoT?
No worries. You can still enjoy your day in the sun.
Here are five things that probably wouldn’t be top of mind but can accelerate your entrance into the IoT market so you can claim your share of its projected $8.9 trillion in revenues.
1. Forget about gee-whiz appliances
With media sensations like Nest, it’s easy to get the idea that you need a highly sophisticated product or appliance to get in on IoT revenues. Truth is, IoT monetization opportunities go far beyond the self-adjusting thermostats and wearable fitness devices that hog all the headlines.
The real money to be made in IoT will come from the services that connected devices make possible. And in most cases, those devices, the “things,” of IoT, will consist of low-cost sensors and smart chips. If the data they generate creates incremental value for your customers, then it can be monetized.
The bottom line — you don’t need to offer a flashy product like Anki Drive to capture IoT revenues.
2. Look to early adopters for inspiration
Industries that are already monetizing IoT include smart homes, personalized consumer services, retail, transportation, healthcare, and manufacturing. Maybe you don’t see your place at the table because your business is not involved in any of these areas. Take a closer look.
Within each of these categories is an abundance of niche opportunities ripe for monetization by forward-thinking companies. Take personalized consumer services. With geo-location technology, you can now monitor your teen driver’s whereabouts, keep tabs on wayward Fido, and never lose your stuff. In healthcare you can rest assured you’ll always remember to take your medication.
The barrier to entry for applications like these is low. That’s because the solutions are simple and the cost of the chips that make them work is relatively low. The value is not in the products, but the services. Many of which can be billed on a recurring basis, by the way.
As IoT technology proliferates, so too are similar niche opportunities in areas as wide-ranging as connected cities, energy, infrastructure optimization, supply chain management, resource allocation, personal productivity, inventory control, logistics, government, military, agriculture and environmental management. The possibilities are seemingly only limited by your imagination.
3. Data capture added to your existing product or service is pure gold
One of the shortest routes to recurring IoT revenues is to offer useful data to your customers that enhances a product or service you already provide. For example, sensors built into industrial equipment can monitor machine performance in real time to prevent unplanned downtime.
This strategy works just as well with services. Auto insurance companies like Progressive and Allianz France use telematics to help their customers become better drivers and lower their premiums. Progressive’s drivers can monitor their performance online, while Allianz sends the data to its customers’ smartphones. The information gives customers insights to improve their driving habits and lower their fuel and maintenance costs.
Best of all, these companies didn’t invent these systems from scratch. Each service piggybacks on technology already built into cars. They plug into a car’s diagnostics port. In simple terms, all these companies are doing is harvesting data that cars already generate and packaging it in a way that’s valuable to their customers.
4. Court strategic partners
Allianz France didn’t create their IoT offering completely in house. To make their concept a reality, they needed outside expertise in GPS solution development. They teamed up with TomTom, the global GPS specialist.
Lindsay Corporation used the same strategy to develop their IoT application, FieldNET, which enables farmers to remotely manage crop irrigation from smartphones and tablets. The company’s lack of expertise in software development didn’t prevent it from jumping on a hot IoT opportunity.
There are many areas of specialization required to bring a successful IoT offer to market. Product development, usability, ergonomics, network optimization, customer engagement, marketing and agile billing are just a few areas of expertise that can be provided by a growing realm of IoT ecosystem providers.
5. Take an indirect route
Many projected use cases for IoT won’t directly generate revenues. To achieve greater efficiency, companies are deploying IoT sensors internally throughout their organizations to optimize their use of everything from computer servers to lighting to HVAC systems to employee productivity.
“Smart cities” are doing the same, only on a much larger scale. Amsterdam is leading the way – it’s employing IoT technology in everything from improving traffic flows in real time to emergency response to optimizing public transit use and maintenance.
On the surface, these particular applications of IoT primarily cut costs instead of generating revenue. However, they represent significant indirect revenue opportunities for savvy companies that can provide the many moving parts required to make IoT magic happen.
A short sample of IoT expertise that companies, cities, government entities and the military are eager to enlist include systems integration, sensor device deployment and management, mobile software development, big data capture and analytics, customer care, telecommunications and data security. In many cases, the contracts for these services will be ongoing and rely on a recurring revenue model.
Bringing the IoT into the enterprise isn’t only an issue of upgrading your tech, but also upgrading your people’s knowledge, flexibility and speed. As is the case with great technology endeavors, thinking outside the box is required to help you find a path to success.
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