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Thursday, July 25, 2019

Business Models for IOT

A general kind of thought.   But there are specific ideas by type of technology which are useful to think about.

The Internet of Things Needs a Business Model. Here It Is
by Michael Blanding   in HBS Working Knowledge

Companies have struggled to find the right opportunities for selling the Internet of Things. Rajiv Lal says that’s all about to change.

The Internet of Things (IoT) has been near the top of the technology-hype lists for years. In 2018, Gartner’s Hype Cycle for Emerging Technologies ranked IoT platforms as cresting the “peak of inflated expectations” stage and ready to tumble into the dreaded “trough of disillusionment,” like a barrel careening over Niagara Falls.

It’s not that IoT has flopped; far from it. Everything in our homes seems to be connected. IoT devices enable networks that make possible smart speakers, smart TVs, smart thermostats, and even smart refrigerators that can help automate our lives. The consumer market, however, is only the beginning of what is possible through the IoT.

“What you see in the consumer domain is interesting, but it’s not where the economic action is,” says Rajiv Lal, the Stanley Roth Sr. Professor of Retailing at Harvard Business School. “Most of the IoT applications that matter are in the business-to-business space.”

Indeed, the kinds of innovation possible in the B2B world seem limitless. By placing sensors on machinery and connecting them to the internet, companies can capture real-time data on their assets and processes, exploit efficiencies, proactively identify problems, and develop new workflows.
So why, then, do most IoT ventures fail? Despite the industry's potential value of $11 trillion, according to McKinsey, more than 75 percent of businesses don’t make it off the ground, Lal says. That’s because most companies don’t know how to harness the potential of IoT effectively.

“We can put sensors on something and get great data out of it, but then the question becomes what are we going to do with that data—and how are we going to make money off of it?”  .... "

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