New Business Models through IoT

So in a recent IoT study more than 50% of those survey indicated that they were more interested in IoT Business Models than any other issue related to IoT. I think this survey simply reflects the fact that as a disruptive technology most peoples interest/ concerns are around what impacts IoT will have on how they do business.

As a new market it is clearly hard to predict how things will end up. Most businesses/ products/ solutons are too early in their development cycle to say whether they will be successful or not. What I can say is what some of the characteristics of the new IoT economy will look like based on everything I've seen....

Continued Disintermediation

Iot will help to eliminate the middle man. So the best way for me to illustrate this one is with an example. Ever heard of Amazon's Dash ? A great little idea from Amazon. Dash is a tag with a single button that you can attach to everyday goods (example your box of Laundry Soap). When you run out of that good you simply push the button on the tag, Dash connects to the internet and the next box of laundry detergent is ordered. No going to the grocery store (or website if you are an internet shopped). The product shows up on your door step after your credit card is debited.

Poof... no more grocery store or internet retail site. Ok maybe they won't disappear all together. But you get what I mean? There are many industries out there that act as intermediaries in some way either in terms of products, information or services. IoT has the ability to eliminated many of these intermediaries from our supply chain.

Increased Focus on Annuity Revenue Models

This is already the way the IT market is going. Why buy up front when you can rent? One of Microsoft's biggest products right now is Office 365 which is there pay as you go software. IoT is great for facilitating Pay-as-you-g models. Think about it. Your every day devices can be feeding back to some central database your real time usage. So for example instead of paying for your dishwasher up front, you buy a Dishwasher connected to the internet and you only pay every time you wash your dishes. Ok again perhaps an extreme example. But you see what I mean? The drive to As-a-Service business models will increase.

Increased Customer Expectations

Expectations in terms of Supply Chain Speed and Service Up time will continue to increase. As customers come to expect that the time to respond to demand signal shortens as their devices communicate directly and immediately when action is required. For example the internet connected car that identifies that worn breaks needs replacing and automatically schedules the repair.

Increased Automation and a focus on Smart Applications

Probably the most significant impact of IoT in my view is the increase in process automation. Take for example Google Nest home automation systems. Lights can be turned off and on to save energy. The fire department can be automatically alerted to a fire alarm. Security cameras can alert home owners when someone is in there house when they shouldn't be. These are all simple examples of increased process automation as a result of IoT. Whilst the examples I've given are Consumer based there are lots of industrial examples as well. Point being the true benefits of IoT come where you can automate the process and take away the need for people to act.

In conclusion then whilst it is hard to predict the exact future business models that IoT will create. It is clear that Disintermediation, Annuity Revenue Streams, a focus on Automation all to address increased Customer expectations will all be key components of business strategy in the changing IoT world.