IoT projects often seek to satisfy one of two financial goals: increase revenue or lower operational costs. Generally, IoT projects are often justified to leadership and investors based on their potential to add new products, features and sources of revenue. Though, these revenue increasing opportunities are often the most obvious means to justify IoT projects, do not discount the huge cost savings and efficiency increases that are also possible.
The Halo Effect
While these two primary dimensions often kick start new IoT projects, there is huge potential as projects mature and more data is collected with the capability to be shared, integrated and further sold for additional opportunities. In a world where the lines of competition and partnering are blurred, IoT opens up entirely new areas for companies to collaborate and create innovative new products that individually they could not. This is the halo effect of IoT.
Monetizing Your Data
The IoT ecosystem is a complex integration of different technology providers across different markets. Value is derived from the specialized vendors that work across layers from single to integrated data sets shown in Figure 1.
The real value in IoT is the ability to monetize opportunities outside your immediate ecosystem and customer base. Data has become a commodity and the ability to gather and analyze this commodity is becoming more mainstream. IoT vendors are pushing towards new and innovative areas, expanding revenue streams and providing new capabilities for current customers while targeting new types of customers. In just one example, IoT presents unique opportunities to expose real time data to stock markets and other financial instruments to enable a much faster response to market conditions.
IoT for Many Industries
IoT opportunities span almost all domains and industries. As we look at the halo effect that data access creates, we look at several industries that are currently at various levels of maturity regarding IoT adoption and data monetization. We classify the monetary benefit into orders, inspired by the Fresnel lens, a stepped optics design used to illuminate the coast from lighthouses, where the lower order translates to a longer distance of visible light. In the case of IoT monetization, the lower order means higher monetary returns on the use of IoT data and a longer horizon of value from investments in IoT projects.
Cable Industry – DVR Log Aggregation
Many cable providers look to the connectivity of set top boxes to drive new innovation around consumer experience and measurement. The data collected from common DVRs and set top boxes enables a wealth of decision making around device reliability, consumer experience and consumer preferences.
4th Order – Tracking and analyzing feature usage and failures. Enables the provider better visibility into client satisfaction and proactive efforts to increase adoption.
3rd Order – Evaluating channel watching patterns to better engage with clients purchasing marketing and providers of content.
2nd Order – Selling or exchanging usage data with external parties that aggregate the information with other marketing mediums.
1st Order – Allowing availability and exchange of data in public markets, enabling the free flow of data, access and integration between unrelated parties. This use case will produce large quantities of information about consumer behaviors that can be made available to product companies looking to better tune their products and features for a changing market.
Agriculture Technology – Field & Farm Operations Data
As the agriculture market expands to meet the needs of the world’s growing population, connectivity and data are key to enabling growers and providers to make better decisions and increase crop yield.
4th – Enabling farmers to simulate their fields with real world satellite imagery and weather data, paired with specific cultural practices.
3rd – Enabling a single farmer to access his or her own data and compare that data to nearby farmers and fields.
2nd – The ability for growers, retailers and suppliers to seamlessly communicate by accessing data sets that span the organization and modeling crop yields based on this integrated information.
1st – Enabling commodities and stock markets access to data, so real-time changes can be seen in buying patterns, mid-season applications and anticipated yields.
Automotive – Connected Vehicles
The ability to connect vehicles is enabling a revolution around vehicle maintenance, safety, and consumer experience. Connected devices provide consumers a uniform experience as well as more rapid notification to events that could affect their commute.
4th – Notifying drivers and the dealer that a vehicle is in need of maintenance while automatically sending in diagnostic information to streamline diagnosis and repairs.
3rd – Giving consumers the ability to move preferences and experience between brands of cars.
2nd – Communicating between automotive manufacturers and suppliers about emerging product quality, safety and reliability issues for proactive resolution.
1st – Giving third parties the ability to seamlessly access authorized data so non-car related services can be created to enhance other aspects of the car owner’s life. With this data an entire ecosystem can grow around the data produced by cars to provide for better integration with mobile devices as well as better quality information available to members of the automotive supply chain.
IoT has rapidly grown through the adoption of connected devices, streaming data and improved consumer experiences. This growth has proven to reduce costs and increase revenues through incrementally improved product features and capabilities. But the real value; the true halo effect of IoT monetization will be realized as organizations break boundaries, merging and integrating data across companies and providers that were once competitors or working in distinct markets. Both consumers and IoT providers will see tremendous advantages through new capabilities and financial benefits with the continued integration and availability of IoT data.
At CTP, many of our clients have an abundance of unused data. They realize the potential value, but they do not have the skills or expertise to take advantage of the IoT opportunity. If you are an enterprise manager, you too may be sitting on a gold mine of data that could open up entirely new areas for your company to collaborate with others and create innovative new products that could never have existed before.