As the Internet of Things (IoT) grows from infancy to maturity, enterprises must stay alert for ways to monetize their involvement. When they think of IoT, most people envision the ever-widening selection of connected devices, but those devices are collecting a vast library of data—information that is often more valuable than the smart “things” themselves. According to Machina Research, IoT has the potential to generate $3 trillion in revenue in 2025. How can enterprises tap into the gold mine of data?
Until now, enterprises wanting to invest in IoT focused on development of devices and software to enable connectivity. But as IoT continues to grow and evolve, data generated by connected devices is increasingly a commodity. According to IBM Global Business Services, companies are beginning to monetize eight types of IoT-generated data: attribute, event, environmental, living, location, machine, motion and orientation. They are analyzing the data and using the information to reduce costs, generate revenue and refine marketing strategies. Beyond using their own data, enterprises should consider selling data they collect or purchasing data gathered by other entities. For example, connected cars collect data that could be useful to smart city planners and insurance companies. To successfully monetize data, enterprises should first consider how they can use it to gain actionable insights, and then adopt a broader vision of how they could monetize their data by marketing it to other entities.
Creating new revenue streams
Add-on services are a prominent feature in our digital world—for example, many smartphone applications offer in-app purchases of additional services or products to users who have already downloaded the program. Enterprises can take the same approach with IoT devices to create new revenue streams. Connected car manufacturers can upsell consumers with media add-ons available through the car’s media player. Similarly, when a retail customer picks up a connected product in a store, a nearby display might illuminate or the shopper might receive a text message promoting related products.
Since it contains a tremendous variety of connected devices, IoT prompts perpetual concerns about security. Enterprises wishing to truly monetize IoT must ensure that security is strong. Tackling the problem means prioritizing end-to-end security from device to network to data storage. Rather than dealing with a security breach after it happens, enterprises should carefully consider how to protect its devices and data. Often, this means consulting a solutions provider to establish an overarching security plan.
Scaling IoT, or adding capacity, is an interesting challenge with a few possible solutions. Vertical scaling, or adding more powerful machines to the network, is a limited approach because even the fastest processors fall short of tackling today’s demands. Horizontal scaling involves adding more machines to the network and using an open-source system that allows different enterprises to develop devices and apps that are compatible with each other. When it comes to IoT monetization, horizontal scaling offers a simple solution with the benefits of cost savings and flexibility.