We are living in a turbulent world where competition is becoming hyperturbulent. New and existing companies must take the job seriously of continually initiating and adjusting to the new Industry 4.0. Internet of Things (IoT) technology is causing an immense disruption across many industries with the pace of change increasing every day. However not everything is related to high tech connected solutions or state-of-the-art technology developments, IoT business is more than that.
Cutting edge technology…just one more player.
We all take for granted that our TV is connected to the internet, our smartphone communicates with our watch, the smart indoor heating system always delivering the perfect temperature (especially in the freezing Swedish winter) and so on. Yes, Internet has given unlimited access to data and technology for most of the world’s population. But technology is not the only main player to develop an IoT business and monetize from its benefits.
The innovation should not be only in technology, it should also consider the development of a new business model and delivery method of IoT services for other organizations and end-customers. Technology can give us a lot of possibilities of creating innovative solutions, but if we cannot materialize it into a business, then a great business might stay as a great design only. IoT business encompasses additional critical players, that together create the perfect match to embark into the “IoT journey”.
The center of attention on technology for IoT services means that the business aspects are often overlooked. Successful IoT services are built on a premise of a clearly defined service offering complimented with operational and business models. There is a tendency to treat each of these views in isolation, but effective IoT services onboard these models in parallel.
Cultural (tech) fact:
Did you know that the concept of a smart IoT device was introduced back in 1982? It was with a modified Coke machine at Carnegie Mellon University (Pittsburg, USA) becoming the first Internet-connected appliance. This Coke machine had the ability to report its inventory and whether newly loaded drinks were cold.
The Business of IoT.
I remember a conference where the speaker said: “If you haven’t started in the IoT, you are already late”. That is not completely accurate. IoT will be “alive” for a long time and we need to take advantage of this with new IoT services, ideas and business models. You will never be too late with innovative ideas and IoT offers a vast of possibilities.
The basic components around a business are: a good product, a reliable business model and customers. For the latter, we have and plenty of them (at least in terms of connected devices). Intel, for instance, projects a device penetration to grow from 2 billion in 2006 to 200 billion by 2020, which means to nearly 26 smart devices for each human on Earth. Others, as Gartner who is taking smartphones, tablets and computers out of the equation, estimates 20,8 billion connected devices by 2020.
Hence we need to understand the business aspects of the disruption caused by IoT and how to take advantage of the coming opportunities.
Technology is only one of many tools to be used to develop successful, profitable and sustainable IoT business. There is literature explaining different aspects to consider when developing IoT services to create successful IoT business; but I would like to mention two that I consider the most important:
In simple words, for IoT to reach its full potential, it will require several ecosystems and currently “non-cooperating” industries to work together to maximize business.
IoT as a Service (AaS):
Or as “pay-as-you-grow” model in which customer pays proportional to the usage of the service. This enables initial low investment, scalability and cost controlling.
IoT business is not about technology solely, it is a series of multiple aspects to consider that must be attended in parallel. Many of the IoT projects/business are condemned to fail as profitable business if people within the organizations do not consider business relevant aspects as important as technology development during the entire lifecycle product management.