It is important to build a realistic business model that shows how value is quantified and captured. The following sections describe an approach to quantify and optimize for value within the context of an IoT connected product deployment.

Customer service teams are finding themselves right in the middle of a company’s connected product strategy. In addition to augmenting support staff with the new skills, processes, and documentation necessary to support connected products, it is also important to recognize the opportunity to create value by delivering better customer service that is more relevant and efficient.

The time it takes to get a product to market is crucial to a product’s financial success. If time to market can be reduced, the product will have more exposure to the market, which leads to higher sales. A fast time to market can also establish a firm competitive foundation by securing the critical first or second mover advantage. Connected products enable enterprises to create value by shortening product time to market in a number of ways, including:

Adhering to regulatory requirements, like those created by the FDA, can be onerous. However, one IoT business strategy is to use connected products to create value by streamlining the compliance and reporting process. For example, remotely monitoring the temperature and environment of food as it is transported from the farm, to the grocery store, and ultimately to refrigeration cases can be used to:

For some applications, the reduction of risk is a key value proposition of a connected product offering. Risk can be reduced in a variety of areas, including:

An Exosite customer that is a Fortune 500 company in the industrial market found that after a mass connected product deployment with Exosite, end customers spent 20% more on replacement parts and accessories than those with non-connected varieties. The same end customers were also 25% more likely to purchase follow-on connected products from the same brand family. This data shows that organizations leveraging connected products and building IoT strategies are enabling brands to reach further into the consumer experience and create deep connection points that are valuable and sticky.

Although the IoT landscape is fragmented and confusing today, connected technology is becoming easier to integrate and deploy. As a result, the threat of new market entrants has never been higher, and consumers have never had more choices. This requires business leaders not only to build strong businesses, but also to defend their position in the marketplace. In the past, large companies could outdo small ones simply based on their size. In the future, however, agility will determine success, with responsive companies outdoing those that are slow to change.

In any industry, the "time is money" saying rings true.  The IoT generation of business is enabling companies to run more efficiently and effectively, saving time, resources, and money.

The first and most obvious type of value creation is revenue generation from the end customer or business that is the target of the connected product offering. At the highest level, revenue is typically collected at product purchase (pre-paid) or on an on-going basis (recurring), although a number of hybrid models also exist. A full list of the available IoT strategies and revenue stream models and is outside the scope of this white paper, but some examples include:

ROI business models for the Internet of Things are fundamentally centered on creating value within the context of data-driven experiences. Where there is value, someone is willing to pay for it. In the new world of connected product deployments and data, there is an entirely new landscape of value that can be created to drive revenue, reduce expenses, or capture market share.

Connecting products is the first step in a sequence of a maturity process that ends with intelligent control and decision-making support. Although the near-term focus may be on connecting the first product family to meet the expectations of a particular IoT business model, it is laying the foundation for future connected products and initiating data collection that can ultimately be turned into actionable insights.

Connected product fleets are a new endeavor for many enterprises. While designing a connected product offering is hard enough, preparing an entire organization to market, sell, and support it is even harder. Many organizations face similar challenges when designing their enterprise IoT strategy, including:

Traditionally, creating value with durable goods meant identifying lasting customer needs and providing a quality service or product to meets those needs. As a technology stabilized, new market entrants established a foothold, consumers became savvier, price wars became commonplace, and the race to the bottom began. Since the beginning of the Industrial Revolution, this trend has repeated itself over and over.

The Internet of Things (IoT) movement is upon us all. Devices all around us from the home to the factory are becoming connected to the Internet. For durable goods manufacturers, opportunities abound to create an IoT solution that captures new sources of revenue, reduces expenses, and better engages with customers who are increasingly hungry for quantitative information about the devices and environments around them. For enterprises this is both an exciting and terrifying time, as the opportunity to monetize the value of data has never been greater and the threat of new market entrants has never been higher.

The ability to connect, remotely manage, and monitor networked devices via the internet, known as the “Internet of Things” has created one of the biggest threats and opportunities for product manufactures in recent memory.

However, building an IoT solution is complicated. Sensors, short-range RF networks, gateways, security concerns, web services, information technology (IT) maintenance and monitoring, web and mobile application development, and enterprise integration are all parts of the system that must be solved. Enterprises seeking to enter the IoT space often have expertise in building durable goods, but not networking, sensor networks, or IT. Additionally, these enterprises are often very diverse, with numerous divisions, product families, and business models that only further complicate the already-complicated world of IoT.