Featured Article from Software Monetization
The Monetization of the Internet of Things
We are all constantly getting information on how the advent of billions of connected devices is transforming daily life. In fact, Cisco has forecast there will be 50 billion connected devices by 2020, and Gartner is projecting over $300 billion in revenues, just for the suppliers of IoT devices. Within five years, estimates are that one million devices will be brought online every hour.
We are poised to live in a world of immersive devices generating an almost unimaginable amount of information. Information that once communicated and processed can and will be turned into capabilities that will profoundly change how we literally and figuratively “go about our business.” How the providers of IoT solutions actually fulfill the promised pot of gold at the end of the rainbow is a work in progress. Securing the data (either at rest or on the move) along with software monitoring and generating the data means that monetization of the IoT is not a trivial consideration.
If you’re developing products, services or platforms for the IoT, you need to read this new white paper, “Monetizing the IoT: Show Me the Money,” written by Chris Kocher, Co-Founder & Managing Director at Grey Heron and sponsored by Gemalto. Chris has extensive experience helping executives increase revenues and valuations in disruptive markets.
In this comprehensive and thought-provoking white paper, Chris Kocher explains:
“ Most of the IoT is not based on breakthrough technology. In reality, it’s a remix or mashup of many things that came before. What is new are lower costs, more intelligence, ubiquitous communications, and enormous new streams of data. They change everything. And they provide revolutionary opportunities to recombine these offerings to produce entirely new value-creation opportunities, business models and revenue streams.”
In addition, the paper includes:
- An overview of the forces driving the IoT.
- The 10 major markets that are being disrupted.
- The importance of ecosystems and partners in monetizing the IoT.
Chris also talks about how it is critical to innovate business models – not just products, and highlights new ways hardware and software vendors can maximize their IoT investments.
- Innovation will spur new ways to provide customer value, improve service and increase sales.
- New revenue and cost savings opportunities will open new markets and reinvigorate old ones.
- Competitive disruption will provide threats and advantages to many industries and economies.
- Innovative companies will leapfrog others and enter adjacent markets against unsuspecting participants who will get ‘Amazoned.’
- Industries and business models will change as more and more hardware products become software-oriented services and ‘Software eats the World.’
Two of the major recommendations in the paper are around the needs for companies to align monetization with customer outcomes, and identify distinctive customer value across the value chain. The latter includes six key considerations for leveraging the ecosystem to obtain optimal monetization of IoT initiatives. In fact, the graphic below that illustrates all of the moving parts of an optimized ecosystem should be an inducement as to why spending time with it can be so useful.
No matter where one sits in the ecosystem, whether you’re a software company, a developer of hardware devices or a services company, the paper concludes: “Now is the time to decide how to build and monetize a sustainable business around your technology, IP and IoT innovations.”
Sound advice from Chris Kocher.
Edited by Maurice Nagle
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