We recently attended Industry of Things World Berlin and had the pleasure to present there and share thoughts with industry experts. The graphic recording of my session is an excellent summary of the journey to IoT monetization – kudos to @benjaminfelis. Here are some highlights of the key steps we discussed:
1. Know your business model – and get the basics right
Ultimately everyone wants to drive revenue and create profitable IoT offerings. That will come from new digital business models and from operational efficiencies. BUT – The best business model won’t help when you don’t get the basics right:
- Ship a secure product that’s free of vulnerabilities. Then, monitor and manage vulnerabilities during the device lifecycle. Literally every IoT offering uses open source components, but only few suppliers manage them diligently.
- Implement a licensing and usage management technology that enables you to actualize new business models, capture device and usage insights and manage compliance.
2. There’s no “one size fits all”
Leverage the power of software to differentiate devices and activate premium features for customers at the push of a button. Flexible activation of features is the key that differentiates a smart device from a dumb one. Your customers will appreciate the flexibility and the accelerated time to value.
3. Leverage the value of data and insight
A successful digital business model is based on insight. When thinking of IoT and data, many just think of the process data that comes back from sensors. But there’s more: Which device is using what software? And which customer is using what and how much? By aggregating device, software, customer and usage data you build the groundwork for strategic decisions and future business success.
4. Monetize the full IoT stack while keeping your customers front and center
Start monetizing the value of software and be smart about it. Build packages that can be consumed as a service, rather than monetizing components of your IoT offering differently or, in some cases, not at all. One thing’s for sure – recurring revenue models like subscription will outpace the more traditional models. With this trend, a close customer relationship is more important than ever. Know what your customers are using, measure the value they are getting from it and act at the right time when you identify growth potential or attrition risk.
A software monetization platform is the vehicle you need to embark on the journey. Why build a donkey cart yourself when you can get an autonomous car on the market?