The Internet of Things is an ever-growing economic domain that leverages the latest advances of cloud computing, Artificial Intelligence, and Big Data analytics to implement better and smarter ways of living for all consumers. This article explores the range of IoT solutions in use, the benefits of IoT applications for businesses, and the ways to build an IoT strategy you can monetize successfully.
With around 20 billion interconnected devices worldwide, IoT applications are in constant demand. These devices are not smartphones or PCs, mind you — these are purpose-built IoT solutions like smart sensor networks in Industry 4.0 factories and wind farms, etc. With the oncoming 5G era, the proliferation of smart city initiatives across the globe and the ever-growing popularity of smart home appliances, the future of IoT is happening right now, and it is quite a lucrative future!
As the Harward Business Review survey states, 58% of companies experience improvements in collaboration after implementing some IoT use cases in their workflows. More to say, 40% of companies plan to invest even more in their IoT strategy in 2021.
Integrating the latest technology always means gaining a competitive edge and the IoT implementation is no different. Industrial IoT solutions enable businesses to reduce their operational expenses by automating repetitive processes and reducing waste. This also applies to logistics, quality of ongoing system maintenance, and product support. But who and how can benefit from the IoT business opportunities?
In order to understand how to monetize IoT, we must first figure out who is willing to pay for IoT solutions. The three biggest entities that benefit from the IoT are governments, businesses, and consumers.
IoT use cases for governments
From automated defensive systems to healthcare systems and smart city infrastructure, governments across the globe invest heavily in various IoT applications. Business Insider reports that 7.7 billion smart IoT sensors were deployed by governments as of 2020.
From a humble $36 billion back in 2014 to a whopping $133 billion in 2019, smart city infrastructure is built around the planet, increasing the economic value of such cities by at least $420 billion. As for healthcare, the number of interconnected IoT sensors in healthcare is around 650 million worldwide, with the COVID-19 pandemic boosting telemedicine and remote healthcare growth.
IoT business opportunities
Industry 4.0 factories equipped with smart sensors are already in use by 35% of manufacturing organizations worldwide. 18% more plan to implement this technology in the next 2-3 years. Food services companies use up to 310 million smart sensors worldwide, 75 million are deployed in agriculture, 5.5 million are installed on oil rigs, and nearly 1 billion smart sensors monitor the power lines across the globe.
IoT success at the consumer market
Smart homes and self-driving cars are the consumer market segments that are already experiencing the benefits of IoT adoption. The number of connected cars is around 220 million as of 2020, and the majority of American households are expected to be connected to the Internet by 2030.
While global enterprises mostly leverage IoT solutions for cost reduction and IoT startups build various software products to earn money, it is SMEs who find the best IoT project ideas and apply them to transform their workflows and empower their businesses.
1. Greater Efficiency
As an organization adopts the Internet of Things technology, it is most often deployed within the production monitoring ecosystem. When smart IoT sensors start delivering an influx of data, you can get a detailed overview of various aspects of your organizational efficiency — from the machine shop floor or assembly lines to internal and external logistics.
For example, when a hundred sensors monitor the temperature on the production line and it remains stable, only 1 signal is sent to the cloud. But when there is some heat anomaly, a disturbance that signals some issue — it is pinpointed from the rest of the signals and an alert is raised.
By deploying Big Data analytics solutions, you can define normal operational patterns and identify room for growth. This way you can easily highlight the processes that can be improved to boost your overall operational efficiency, as well as the processes that outright impair it and should be reorganized.
2. More data, fewer crashes
One of the most essential IoT applications involves prescriptive analytics for preventive maintenance of equipment. When smart sensors collect information on the working conditions of various equipment parts and compare the parameters with historical data, this allows forecasting the most probable date of the oncoming crash.
Thus, the business can prevent such crashes by timely replacing components of assembly lines, machining systems, vehicles, and other equipment, which allows avoiding significant production disruptions and loss of money.
3. New Ways to Understand the Customer
Customers prefer personalized services, especially within the financial and technology segment. Data provided by wearable IoT sensors within our wristbands, headsets, smartwatches, or smart home assistants can be invaluable as a source of customer preference insights. Combined with powerful cloud-based Big Data analytics tools and sophisticated Machine Learning models, IoT solutions help predict customer requests and personalize the range of products and services to their liking.
This approach results in many e-Commerce and other online customer-facing sites investing heavily in developing custom IoT applications to be more competitive and serve their audience better. The future of IoT is also closely linked with computer vision advancements to help companies automate various aspects of their operations or gain better insight into their customers’ behavioral patterns.
4. New Business Lines with IoT implementation
Once the companies start their IoT implementation journey, they start seeing multiple IoT business opportunities, like the ability to track their products through the logistics chain or monitor their performance in production to offer predictive maintenance.
Thus, 36% of companies that have already seen their IoT initiatives bear fruit are now considering new business lines and models enabled by the IoT success. The valuable data gathered this way can also be shared across the company’s network of partners to enable new value-added services.
Due to the fact that there is a ton of various IoT sensors and devices around, that can be combined in a myriad of possible combinations to serve a huge range of potential IoT use cases, the businesses might get a bit lost regarding the benefits of IoT for their industry. Read 3 typical scenarios below to select the approach that works best for your project goals and business IoT strategy in place.
Scenario 1: Product design and customer experience
You can simply add IoT sensors to various home appliances to enrich the customer experience with them — make them remotely controlled through voice commands, etc. For example, BeerBrew applied an IoT solution to create a smarter home-based beer brewing process for microbreweries.
Scenario 2: Augmentation of business processes
IoT sensors can be utilized for monitoring manufacturing processes and prevent downtime due to crashes. Being integrated with the city infrastructure, they can monitor the road condition, help manage the traffic and prevent traffic jams, etc. Wearable IoT devices can help with visitor orientation in huge industrial, scientific complexes, or expo venues as well as augment the business hospitality aspects.
Scenario 3: Consumer insights
Any business can gain valuable insights, not from its own IoT sensor networks and IoT solutions only. Such data can come from third-party IoT sources and partners as we mentioned above. For example, healthcare providers can monitor the wellness and medical conditions of their patients, both hospitalized ones and the ones who receive care at home. Wearables can signal high blood pressure or any other dangerous condition long before a patient decides to call for help.
Below we describe 4 major IoT monetization models, though you will definitely be able to find some more that will suit your business DNA better.
1. Products with connected features
The easiest way to monetize the Internet of Things is to sell products with IoT sensors, remotely controlled through specific IoT applications. Adding such features to new or existing products allows the companies to price them as innovative and sell the sense of novelty to make them more popular with their customers.
2. Service subscription
Providing additional IoT-based services under subscription is essential to create a stable revenue stream and build strong bonds with your customers long after they purchased your products. Such subscription-based service plans can be provided to an existing user base too, enabling them to extend their device functionality for a fee.
3. Data gathering
IoT solutions can gather, process, and store vast volumes of data, which can describe their owners in an anonymous way. Such data is of huge value for various businesses, as it allows them to improve their marketing strategies and target their offers better. Thus, if your product or service involves data gathering and processing, consider it as another one of IoT investment opportunities. Therefore, if you can depersonalize such data, you can turn it into a revenue source.
4. Ecosystem evolution
One of the best ways to monetize your IoT investments is to not create a standalone product or service but to instate an ecosystem other hardware and software providers can build upon. By providing clean APIs for integration, you enable multiple hardware manufacturers to integrate their products with your IoT applications. If other software developers can build their IoT solutions using this basis, you will get paid by hardware vendors, software developers, and end customers.
The Internet of Things is definitely here to stay. New IoT applications appear daily and ways for IoT implementation only multiply. It is never too late to hop on the IoT hype train, develop a great product to satisfy an underserved niche, and reap multiple business benefits of IoT.