How to Monetize your IoT Solution
Cisco predicts that Internet of Things revenue will rise to about $19 trillion in a few years. Is it possible or Impossible — will time say really. In this article we will describe how Internet of Things businesses manage to earn millions of dollars. Curious about IoT monetization models? Keep reading.
In a recent survey of senior business leaders around the globe, 96% said their companies would be using IoT in some way within the next 3 years, while 68% said their companies are already investing budgets in IoT2 . However, there is a catch to all of this — most organizations are yet to derive significant commercial value from IoT. A recent research shows that 70% of organizations do not generate service revenues from their IoT solutions
Network connectivity is critical for the Internet of Things (IoT) to function, which is why you’re investing in your network to support billions of devices. But if you want to make money from IoT, selling connectivity won’t cut it. The real revenue will come from the value-added digital services you deliver, the data you aggregate, and the partner relationships you forge to deliver those services.
Make your IoT service go further and launch faster when you work with partners. Sell devices and data services directly to customers, or use our solution to set up your own partner ecosystem. Bill customers directly or on behalf of your partners, and share revenues with OEMs, value-added resellers and more.
According to the Business Insider’s report, governments will use 7.7 billion IoT devices by 2020. The biggest potential shows the defense system.
Businesses are the biggest environment capitalizing on IoT monetization. In the branch of manufacturing 35% of organizations are already taking advantage of smart sensors. Other 18% are going to start using them this year or during the next three years
But Successful Monetization Demands Significant Investments in Acquiring New Capabilities, Often without Clear Returns.
Hardware Premium is the easiest way to monetize the Internet of Things. This approach means adding the possibility to connect an existing or new product and offering a mobile app for its remote management.
Producing high profit services and selling them to the customers for a regular fee is a good way for IoT monetization.
Another advantage of IoT devices is their ability to gather and store large amounts of data of any kinds. The data revolution caused by the arrival of IoT is not limited to enhancing business efficiency or improving service. It creates data flows that can be a precious and regular source of revenue for the businesses as well as for third parties.
The concept of IoT develops in an entire ecosystem of connected products. The value it produces increases with the expansion of the ecosystem. The focus is not a service or a product, but a platform shared by producers of hardware and software, service providers and other IoT businesses.
As different companies differ in goals and requirements, the basic tips on how to choose the right IoT monetization model are:
Hardware Premium Model is a good option for those who offer more than their competitors do. Service Revenue Model fits best for the products that are in great demand, such as cars equipped with infotainment modules.
The Data Revenue Model is an ideal choice for companies with the large customer base. The Internet of Things is a rich source of profit for various businesses. Numerous start-ups, as well as many traditional organizations, are successfully exploiting the advantages of IoT.
It doesn’t matter which monetization model you choose, when it comes to IoT connectivity, security must be the top priority.
