Using IoT for Profit, Not Just Saving Money
In the second of our series exploring the top 5 drivers of business disruption in 2017, we look at how the Internet of Things will start to be used for profit not just saving money.
By 2025, it’s thought that the market for IoT could reach $11 trillion, and it’s no wonder. The Internet of Things has forever been marketed as a money saver, whether that is conserving energy in your home or automating a tractor in a field, cutting down on wages and petrol costs. Smart meters, sensors and real-time data have helped industries from healthcare to manufacturing to become more efficient and avoid spending unnecessary resources when they are not needed. Developments in IoT have made it possible to monitor and control devices on mass scales – think factories and power plants. However, in 2017 the focus will shift towards making money rather than simply saving it.
In 2016, IoT devices like Google Home hit the market, directly competing with existing products. New startups are also pushing their own platforms. As IoT is now a consumer technology, it can be used to encourage customers to part with their money. Selling IoT gadgets is just one way of generating revenues, and it’s not the most effective. Instead, businesses will look to transform products into services. The next step in the evolution of IoT is to integrate everyday objects like your fridge, coffee jar or even your jacket. By 2020, around 50 billion smart objects will become connected. This is all part of the revolution in communication that provides streamlined, improved customer experiences. The obvious example is online retail. Radiofrequency Identification (RFID) tags teamed with automated delivery systems will offer a faster service that provides higher quality items to consumers with efficiency and accuracy. Through these improved services, businesses will establish customer loyalty. On the flip side, IoT is also a fantastic tool for B2B because it taps into the routines of a person or place and offers targeted services. A connected fridge, for example, knows when the milk will run out and will order more from the supermarket. Over the next year, commercial companies and service providers will partner with IoT platforms.
IoT has focused on production lines, logistics, transportation and domestic applications. As more devices become connected, the scope is already widening to include other sectors including retail and healthcare. Although this is all very promising for IoT companies, it’s vital to ensure the security of systems that already exist before making them work even harder for the purpose of revenues. The prevention of cybercrime is already a key issue for this year, and the growth of connected items won’t make it any easier.