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Internet of Things: How Can Businesses Monetize IoT Technologies?
IoT is expected to revolutionize the way many industries work, but it’s also expected to be a blockbuster in terms of the dollars of revenue it will generate for those businesses that use it. Cisco estimates that IoT will generate $8 trillion in new revenues and value over the next decade. But a CapGemini report found that over 70 percent of companies that use it do not generate service revenues from IoT.
Chris Dedicoat, president, EMEAR for Cisco, said that “digital disruption is all around us and it’s having massive implications for business. Digitization and the expansion of the Internet of Things is a catalyst for growth, which is driving new economic models and enabling organizations to remain competitive and embrace the pace of change happening globally. This report clearly demonstrates that digitization and the IoT will deliver long term efficiencies and growth opportunities across a wide range of industries.”
Brendan O’Brien, Co-founder of Aria Systems, said that for IoT “the huge upside has yet to materialize. While many companies are driving customer service, operational, and supply chain improvements using IoT, most companies are still working in the margins when it comes to monetizing IoT. When companies upgrade their systems only then can the hype be actualized.”
An article on Wired by CapGemini’s Jerome Buvat explored possible ways in which IoT can be monetized. These include:
- Connectivity. Businesses can sell IoT-capable devices. For an additional fee the device can enabled so that it can be monitored remotely by App or API.
- Subscription. For a subscription additional capabilities and upgrades for a device are available. Similar to software subscriptions.
- Ecosystem Platform. Vendors can offer a platform that their devices can operate in. The platform provides services and support. Users can in turn create applications that work in the platform and resell those capabilities within the platform.
