There are two general ways the Internet of Things adds value to businesses. The first is by improving existing business operations. Predictive maintenance, supply chain monitoring, and automation are a few of the IoT solutions that fall into the first category. This approach is great for businesses that want to invest in IoT incrementally in order to save money on expenses that they previously had little control over.
The second way that businesses can leverage IoT is by creating new offerings to transform their business model. The potential that IoT has to truly innovate a business lies in this approach. Over the past 25 years, the companies that have made the biggest splash in their respective marketplace―or have created a market space all their own―have used the Internet of Things to connect their products and services in a way that gives end users more options. Thanks to the Internet of Things, we have online shopping, ride-sharing, and a plethora of subscription-based services that range from food delivery to music to entertainment and television.
To help business owners keep up with the rapid pace in which IoT is transforming the market space, here are four revenue streams that have been facilitated or accelerated with IoT.
Products-as-a-service is not an entirely new concept. Leasing a home, paying to use an air pump at a gas station, or even companies having to pay royalties to musicians and authors for their songs and books are all examples of the Product-as-a-Service concept. Instead of customers paying a large up-front fee to own something, they simply are paying for the time they use it. While the Products-as-a-Service model already has existed for quite some time, IoT has effectively made it easier for the end user to see the value in paying for the service of a product rather than purchase the product outright.
For example, many airline companies don’t own the turbines on their planes. Instead, they pay the manufacturer for guaranteed hours of uptime, which only can be made possible by the sensors within the turbine that monitor performance and time of use. IoT has greatly enhanced the products-as-a-service model by giving providers a platform to apply actuarial science in order to mitigate financial risks. Applying IoT to the Products-as-a-Service model enhances customer service on behalf of the manufacturer, providing consumers with a better deal on products they may not want to pay to own.
Similar to Products-as-a-Service, asset sharing is a relatively old concept that recently has been broadened and enhanced with IoT. The idea is that assets owned by either consumers or companies can be rented out, or shared, amongst other consumers or businesses. A basic example of asset sharing would be renting out a car or home.
Not only has IoT made it easier for those who need assets to connect with those willing to share, but it also has legitimized asset sharing into its own economy. For example, by building GPS, reviews, and alerts into their asset sharing platform, companies like Uber and Lyft have created a viable model for ride-sharing programs.
Automatic fulfillment is a newer revenue stream that exploits up-to-the-second inventory data, analytics, and consumer input to replenish goods that customers or other businesses need, when, or even right before, they need it. In retail, automatic fulfillment ensures that supply can meet demand; if one store is out of an item, the IoT network quickly can find the nearest store or warehouse location with that item and work to replenish it as soon as possible. IoT not only speeds up the rate of order fulfillment but also decreases the cost. By setting up automated machines to weigh, package, and label orders as soon as a customer hits a button, companies can set up order fulfillment systems that are somewhat self-sufficient.
Product developers can use IoT / M2M to build products that automatically can order materials as needed, adding a new level of convenience to the end customer. For example, a mosquito treatment system may need to be refilled with pesticides every few months. By installing a sensor in the pesticide tank, the machine can send out an order to be refilled automatically or send an alert to the homeowner, letting them know that it’s time for a refill.
One of the most valuable assets to come out of IoT is data itself. The data economy is older than many might guess. Consumer reports and television ratings are a few examples of data being monetized before the Internet of Things. However, the scale at which IoT collects data is so vast that the entire data market has taken on a whole new value. Over the next decade, we are likely to see anonymized data shared across multiple applications and companies. For instance, a vehicle manufacturer may be able to cross-sell anonymous data analytics pulled from their vehicle fleet to OEMs so that they can optimize the design of future products, or to insurance companies needing to have in-depth details on driver behaviors.
Aeris is Driving Innovation with IoT
Aeris is committed to IoT innovation in all that we do. For more than a decade, our platforms have enabled businesses to provide better service to their clients while introducing new business models and modes of operation. The Aeris Mobility Platform is scalable, flexible, reliable, and built to meet the unique needs of enterprises who are moving from unconnected products to connected services.
To learn more about how Aeris can help you innovate, contact us.