Show me the Money – Monetising IoT
The Internet of Things (IoT) is exciting but simply adding sensors to every piece of equipment or every location, from shop floors to petrol pumps, is not going to change the world. While a predicted 20 billion connected devices will be in place by 2020, we wonder how many businesses yet truly understand how this connected world will drive new value and create new revenue streams and how can they leverage this rich data source?
IoT is, of course, not about connected devices; it is about data. And it is those businesses that find the right way to harness, analyse and monetise that data that will be the real winners in the IoT race.
It is hard to find any piece of equipment that can’t be hooked up to the all-consuming IoT. The problem is that while these devices are low cost, they are also low value unless organisations find a way to capture and leverage the created data. This IoT enabled data revolution is not just about finding ways to drive business efficiency or improve customer service; it is about creating data streams that underpin new collaborative business models and can be actionably monetised.
Of course, many organisations have, of course, been capturing machine data for years. Petrol stations, for example, have pump event logs that track every time a pump is picked up and how much fuel is used. Fuel, however, is just one part of the overall customer basket and represents a fraction of profitable revenue. It is the complete customer journey that is key – and linking pump activity to the rest of the customer basket can provide a chance to gain far more customer understanding and hence drive incremental sales.
With more insight, from the timing of visits to detailed customer segmentation, petrol retailers will be able to improve the way in which customers are attracted to forecourts. Taken to its logical extreme, retailers could combine number plate records already captured for security purposes with the purchasing habits of opted in loyal customers to deliver targeted offers and promotions in real time to mobile devices as they enter the forecourt store.
But this is just the start – it is the collaborative model that will drive the real incremental business value. This customer data is interesting not only to the petrol retailer but also to third parties. Selling this data back to petrol suppliers, for example, offers a new revenue stream.
Or consider a car park company using sensors to determine how many spaces are free – selling this information to retailers would enable the retailer to update customers coming in store for click and collect with the latest information on parking availability, an amazing extension of the customer experience.
IoT though is not a magic bullet; nor is big data analytics. And only a tiny minority of the very largest companies can justify a multi-million pound investment in the infrastructure, tools and analytics skills required to understand and prioritise the new business opportunities.
So this is why the cloud analytics as a service model is so compelling – from the investment in secure cloud infrastructure globally to the creation of dedicated analytics tools designed specifically to handle and drive value from vast data volumes. Organisations now have the chance to embrace IoT and explore these new data resources with minimal investment – opting for a monthly fee model to gain access to both the technology and data experts required to help prioritise activity and identify new data driven data streams.
It will be those companies that explore big data and cloud analytics, which begin to think differently about the way data is used and actively embrace the new collaborative world that will gain huge potential value of IoT.
If you’d like to speak to one our team about how your business can gain fast track access to new IoT enabled revenue streams through big data and cloud analytics – call or email us now!