December 16, 2019 - It’s common to for companies to focus on the implementation of an Internet of Things – equipment sensors, 5G connectivity, data lakes, edge processing, and so on – and how those new capabilities will affect your own business and productivity.
But there’s another aspect to IoT that many organizations should consider as well: the possibility of monetizing IoT technology by leveraging it for additional revenue streams within their existing business model or by creating new lines of business.
There’s a large opportunity for monetization: In the rush to engage with IoT technology, there are many industries that have some of the components of an IoT in place but don’t have the resources or expertise to assemble all the pieces into a complete solution.
Consider agriculture, for example. Studies reveal that there’s a potential for both significant cost reductions and increases in crop yield by leveraging the data available from sensors in the field.
But farms typically don’t have the ability to put all that together in-house into something actionable. Instead, the industry is ripe for adjacent companies – like farming equipment manufacturers with integrated sensors and telematics – to offer that as a service.
Or consider the construction industry, where handheld tool underutilization, theft, and loss is a multi-billion-dollar problem each year.
Some tool manufacturers embed Bluetooth tracking tags into handheld tools, but construction companies aren’t equipped to implement tool tracking, reporting, and management systems that span multiple tool brands on a job site, so such capabilities generally go unused.
These construction businesses, which are well aware of the high cost of underutilization—are hungry for a tool vendor or rental company to provide a single, coherent solution with actionable reporting.
If you happen to be a tool rental company and already have access to the Bluetooth tags in these tools, offering a turn-key dashboard that makes use of them all is not too far afield from your existing line of business.
Taking advantage of data
Scenarios like these are playing out in a variety of industries. Often, established businesses are taking advantage of the data they are already warehousing to build additional income streams with their traditional client or branching out into new lines of business.
In many cases, companies can monetize their IoT investment by simply augmenting their core product with IoT capabilities and sell that as a premium product to their customers.
For example, adding telematics to heavy construction equipment or sensor suites to manufacturing equipment is potentially a natural extension of the traditional businesses.
If you have the capability to warehouse the data from those devices, then your own data services – including analytics and reporting – can be sold as a premium service or bundled with the core product. In other words, think of this like the agriculture model mentioned earlier.
Licensing your technology
Another way to monetize your IoT is by helping customers implement and manage IoT solutions, which means you license aspects of your IoT technology to the client and collect on-going fees for managing the network and data streams.
This can also encompass an increasingly common aspect of the IoT: building and licensing digital twins.
Digital twins – digital models of real-world products that can be used to make prediction about reliability, maintenance, failure modes, and other lifecycle considerations – can be extraordinarily difficult to maintain, so this is another opportunity for managing on the customer’s behalf.
Regardless of what specific strategy your business employs, there are a lot of monetization opportunities out there. It’s simply a matter of analyzing the capabilities you currently have and looking for the right opportunity to leverage them with your existing customers.