Monetising the 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, how many businesses yet truly understand how this connected world will drive new value and create new revenue streams?

The IoT conundrum
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. And these devices, by their sheer number, are generating huge volumes of data.
How many organisations will have the required in house infrastructure to store or analyse this information? Or the people with the skills to determine how best to leverage this data to drive real business value? 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.

Data driven experience
Of course, many organisations have 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.

Understanding value
Of course with so much potential IoT driven information and so many different areas to explore, it is tough for companies to prioritise and understand how best to derive value from this data. IoT 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.

New data driven revenue streams
IoT is revolutionary, but not in the way perceived by many organisations today. According to Gartner, growing numbers of businesses will be able to use IoT analytics to drive significant revenue streams. Organisations that have never considered the chance to monetise their data now have the opportunity to mine these rich new data seems. Indeed, many of what have traditionally been core business processes could soon be superseded in value by the monetisation of IoT provided information.