I recently had the opportunity to host an excellent webinar with Forrester and Qualcomm about the opportunities emerging in virtually every industry with respect to monetizing the data gathered by connected devices. If you didn’t get a chance to join us you can watch the replay here. The participants (who included representatives from a number of leading enterprises like Thomson Reuters, YP.com, ADT, Pitney Bowes, and Microsoft) answered a couple poll questions.
First, to gauge the audience, we asked: “Where are you in your journey to launch Internet of things solutions or applications?”
Later, we discussed 4 monetization strategies for connected devices.
And afterwards, asked the audience: “Which of the 4 monetization strategies discussed best aligns to your solution?”
The vast majority of participants (61%) said that their solution aligns best with a “data” monetization strategy. Commonly, in most early early stage IoT programs, data is the initial area of focus. Not surprisingly, both referenced polled results indicate that many of theses programs are in their early stages of development.
There is a strong relationship between data and a successfully monetized IoT program, and refining a data strategy early is key. To those pursuing a data strategy, I would ask some additional questions.
Is the data used for customer benefits or to drive some additional product functionality? What we’re seeing a “blur” between the product and the solution. Most products today have significant software components, most of which are designed into the product. As this grows so to do software updates from the OEM and, additional third party additions.
Is there a physical product? If so, how does that function in a “product system”? To the point above, in a product system software application from both the OEM and other platforms are commuting. In the IoT world, we use data to connect and seek to make sense of product systems.
Depending on the answer, how does the outcome impact the customer experience?
And, finally how is that monetized?
A solid data foundation can also drive enormous value in other programs.
Let’s break down the other monetization strategies discussed:
For “box” strategies, data is key to defining what consumable programs might be offered, which maintenance program might fit, and/or what additional services could be offered. Collecting that data in an IoT system, then applying the right application layer may be the end result of data being collected.
For aftermarket programs, data is key to RCM (reliability centered maintenance) programs. Customized/individual service programs can command pricing premiums while increasing customer retention & satisfaction. The desired end state of an IoT aftermarket program is a program that is customer centric with services & support for their specific case. Done right, this can command premium pricing and drive company margins.
App Store Strategy
App stores use data as well and, in some cases, use that data to integrate service programs into telematics or connected environments. In a sense, an app store could include aftermarket components for service, OEM generated value driven application, and/or third party apps that in effect improve the customer experience.
In summary, while the monetization strategies are often talked about individually, there is a clear connected relationship between them all. Get started on your data strategy.
And lastly, do you still have holiday shopping to do? Check out our Holiday Gift Guide: Connected Devices.