As an extension of the Internet, IoT is the driving force behind digital transformation in business. Many established B2B markets have already started to realize the scale of opportunities presented by the technology, but we believe this innovation can bring even wider benefits.
In this post, we highlight why companies can’t afford to ignore IoT by giving you a sneak peek at our whitepaper.
For more on how you and your business can benefit, download our guide to corporate innovation right here.
The role of IoT strongly aligns with the impact-driven mission of Next Big Thing (NBT), a startup studio for the Machine Economy that backs, builds, and scales successful ventures. Through the NBT whitepaper, you’ll learn:
Why the IoT market will double in value over the next three years
How the machine-to-machine (M2M) economy will unlock trillions of dollars in business value
The drivers impacting the market growth of the Machine Economy
How well-known organizations like Rolls-Royce have used IoT to leap ahead of competitors
How IoT data ecosystems disrupt established markets and enable new business models
Why creating business value with IoT goes far beyond building connected “things”
With rapid developments in technology and an increase in data-driven devices, IoT has skyrocketed. By 2025, it’s predicted that the global IoT market will be worth $1.6 trillion¹.
This growing number of connected devices, intelligent machinery, and smart sensors have enabled an evolving ecosystem to flourish — the Machine Economy (ME).
The Machine Economy is characterized by intelligence, autonomy, networked and economically independent machines that act as the participants in a system, executing operational activities with little to no human involvement. These smart devices and machines are capable of acting autonomously, communicating amongst themselves and making informed decisions on a global scale.
The Machine Economy is building a promising new framework for innovative and disruptive business models that are opening up entirely new growth opportunities through machine-to-machine communication (M2M).
Factors driving the growth of M2M connections include the advancement of new technologies (artificial intelligence, blockchain, and machine learning, just to name a few), as well as the increased adoption of 3G, 4G, and the anticipated 5G network. In addition to this, short-range wireless technologies such as Bluetooth and Wi-Fi further facilitate the global expansion of machine-to-machine connections.
This enables real-time communication between connected machines and allows for the transfer of essential data – tangibly improving business value across industry domains.
Among the many transformative business benefits of IoT solutions, the use of data essentially paves the way for new business models and is the driving force behind how IoT is rapidly transforming the future.
New Monetization Opportunities with IoT
Data provides the raw material for businesses to gain unique insights into the operational efficiency of an organization. In turn, this information can be used to enhance productionprocesses, reduce costs, boost profitability and establish entirely new marketplaces. This is made possible through the evolution of data ecosystems within the Machine Economy.
To explain, an IoT data ecosystem is a system of infrastructure, analytics, and applications that gathers and analyzes data. Put simply, data ecosystems are for gathering and capturing data to produce useful insights.
Companies use these data ecosystems to better understand and make informed decisions about:
Internal environments: equipment, systems, business processes, employees, products, etc.
External environments: competitors and consumer behavior.
How does leveraging data about internal and external environments increase business value?
The following diagram shows the desired requirements to transform IoT data into a monetized business resource.
However, companies interested in reaping the full benefits of monetizing IoT solutions should have a clear strategy in place. Functionally, this means developing a system that transforms data into something that can be used to generate further business value.
In business, there are two primary ways to monetize IoT data ecosystems:
1. Use data-driven insights to improve internal processes
2. Sell data-driven products and services
Organizations already exploring IoT are using data to inform the development of new products and services that enhance customer experience, streamline business processes and fill gaps in the market. Many companies pursuing monetization streams through IoT are implementing flexible software-as-a-service (SaaS) models that generate additional revenue on top of their original offering.
So how can businesses transition from the Internet of Things (IoT) toward the Internet of Services (IoS)? Business executives should determine the following:
• How can IoT improve existing services to generate new value streams?
• How can IoT data enable new products and services that support and build on existing offerings?
SaaS solutions are agile, scalable and configurable, which means that these solutions can be easily deployed in a variety of ways across various industries. IoS solutions offer value-added services that form the final layer that enables genuine business value in a data ecosystem.
Building Powerful and Value-Generating IoT Solutions
Where’s the proof? Are there well-known examples of successful IoT implementations in business?
Yes! Household names like Amazon, Rolls-Royce and Caterpillar are already using new, IoT-enabled business models to leap ahead of their competitors.
How about businesses just getting started with IoT?
Organizations need the right ecosystem, tools, processes, and partners to navigate successful digital transformation and build lucrative IoT solutions.
So, how can businesses develop a winning IoT strategy?
Here at NBT, we’ll help you along every step of your IoT journey. We’ve developed a unique formula that will propel your business to the forefront of long-term sustainability and success.
In order to provide a full scope of corporate innovation, IoT for business and the transition towards the Machine Economy, NBT has designed and made available a corporate whitepaper. By downloading our whitepaper, B2B executives will gain a deeper understanding of how IoT can create value for any business. Explore it below and let us help you take the critical first step to leap ahead of competitors!