Imagine a world where almost every device we use is connected to a vast, intelligent network that monitors, measures, meters and monetizes the colossal flow of data coming through it.
It’s not the stuff of science fiction. We’re already seeing it today. This Internet of Things (IoT for short) is virgin territory for any brand looking to penetrate new markets.
In fact, research firm International Data Corp. (IDC) predictsOpens in a new window that the rapidly evolving IoT market will be worth $7.1 trillion by 2020, a phenomenal sum for something less than six years away.
That’s more than the market for all PCs, smartphones and tablets, not to mention smart TVs and wearable computers, combined.
So, how are brands going to tap into this new market opportunity to make money?
Monetization requires a new generation of systems. The foremost choice among them is the recurring revenue model that’s now available. This system provides customers with a proscribed set of services for a prescribed period of time, usually billed in periodic increments. Deploying this system requires a new way of thinking and engaging with customers, as well as pricing and selling products and services.
There are many successful models for recurring revenue, including subscription (one of the most popular), freemium, metered usage, prepaid and a combination of consumption-based models.
The IoT will feature millions of connected devices, offering unlimited monetization opportunities that will come from customizing and personalizing each and every component in this realm. The road ahead is complex and challenging, but it could prove a windfall for those companies prepared to take advantage.
Here are eight ideas to get you started:
- Successful companies in the IoT space will be those that quickly recognize this simple truth: Compelling IoT offerings will NOT be centered on the IoT-ready devices themselves, but on the services those devices enableOpens in a new window and the attractiveness of the pricing models for those services.
- The IoT is about usage data, so your monetization strategy should focus on deploying a system capable of processing and centralizing an enormous quantity of data for analysis, enabling you to compare consumption to revenue.
- Rolling out strategies to take advantage of the IoT will impact the different departments in your enterprise. Your CFO, CIO and other line of business partners all have a stake, so get them all to the table early in the design process to ensure success.