Business Models And The Internet of Things

IoT Business Models

Recently we looked at how wearable tech was changing the workplace, focusing on how the growth of the industry could improve productivity but also raised questions about employees’ privacy, rights, and ‘downtime’. Wearable tech isn’t the only area of cloud computing that’s changing the workplace, however, as the internet of things is starting to reshape years of received wisdom on business models themselves.

Traditionally, the heart of any business model for either a start-up or a well-established company is ‘value creation’. The term means that companies attempt to perform activities that increase the value of a company’s offering and thus encourage their customers’ willingness to pay for it. Historically, the process for doing this has been firstly to identify customers’ needs and then to design solutions that fit those needs – with the consequence that competition between businesses was largely done on a ‘feature versus feature’ then a ‘price versus price’ basis.

The connectivity in the internet of things is changing this model. Products are no longer finished at the point of release – rather a stream of over-the-air updates, new features, and added functionality can be pushed to the customer on a regular basis, while the ability to track how and where products are used makes it possible to respond to customer behaviour without the need to conduct typical market research. Naturally, the internet of things also allows various products to be connected with each other, opening up the possibility of new analytics and new services to allow for more effective forecasting, better process optimisation, and improved customer service experiences.

Albert Shum, Partner Director of UX Design at Microsoft, commented on these new models, saying, “Business models are about creating experiences of value. With the internet of things, you can really look at how the customer looks at an experience – from when I’m walking through a store, buying a product, and using it – and ultimately figure out what more can I do with it and what service can renew the experience and give it new life”.

Elsewhere, the cloud and the internet of things is also helping to create new business models around the theory of ‘value capture’ – ie – the monetisation of customer value. Typically, this has meant ensuring the price of a product has been optimised to to maximise both sales and profits – often supplemented by discrete product sales. Today, however, the internet of things allows for recurring revenue rather than immediately looking to sell the next product – it shifts the onus from commodity advantages, intellectual property rights and brand name on to personalisation, context and network effects between products.

By Daniel Price

Episode 5: How the Pandemic is Changing Business and the Cloud

An Interview with Ed Dryer of Steadfast With the global pandemic wreaking havoc on business ...

Episode 3: The Bottomless Cloud – An Interview with David Friend of Wasabi

Why data is not “the new oil” and why “cloud” means more than we think ...

Episode 6: Cloud Migration: Why It’s More Important Than Ever

The Importance of Cloud Migration Moving fully to the cloud is still a concern for ...
Martin Mendelsohn

Supporting CISOS, CIOS and CTOS That Are Overwhelmed During the COVID Battle

The Covid Era and CISO Stress Even before COVID-19, senior technology executives, including CISOs, CIOs and CTOs were overwhelmed, and felt an increasing lack of ...
Garry Connolly

What’s Behind Smart Devices? A Data Centre, Of Course

Smart TV's, Smart Phones, What’s Behind Smart Devices? It’s not difficult to be “smart” these days. We wake up in the morning and check our ...
Mobile Apps Business

It May Not Be Sexy, But Strict Compliance Delivers The Freedom To Innovate

Compliance and Business Innovation When the U.S. based non-profit organization RHD | Resources for Human Development decided to move its operations into the cloud, one ...
Martin Mendelsohn

Who Should Protect Our Data?

Who Should Protect Our Data in The Cloud? You would think that cloud service providers are safe havens for your personal data – they all ...
Or Lenchner

Seeing what consumers see: opening the internet with IPPN

Opening the internet with IPPN To remain competitive and profitable, all brands must be data-gatherers. This is part of any brand’s daily routine, but a ...
Jen Klostermann

Telemedicine to medical smartphone applications

Telemedicine to medical smartphone applications With the current and growing worldwide concerns regarding the Coronavirus (COVID 19). Telemedicine is more important now than ever. What ...
Fig 2

Leveraging machine learning models for predictive maintenance of network services

Leveraging machine learning models As per lightreading's service assurance and analytics research study conducted with 100+ network operators and service providers, nearly 40% reported that ...
Yuri Sagalov

IT Culture Clash Where Employees Use Multiple Devices To Collaborate

Employees use multiple devices to collaborate It used to be that company IT decision makers could simply dictate the software that business units would use ...
Mike Brown

Robo Advisors and the Investment Management Industry

The Future of Robo Advisors Robo advisors are on the rise and they are winning in the investment management industry. When they made their appearance ...
Steve Prentice

Cloud-Based Financial Software Reinforces the 80/20 Rule of Business Management

Cloud-Based Financial Software Sponsored by Sage 50cloud Small businesses are known for being innovative and customer-focused in a way that their larger competitors cannot. This ...