As we get closer and closer to figuring out what the Internet of Anything/Everything/Everyone (IoX) will and will not be, one of the running themes is how to monetize it. Today, many of the marketing dollars are wasted, simply because there is little understanding of where the dollars should go, to whom, and for what. That is because there are so many visions of what the IoX should be.
It is never an easy task to try to figure out where the money is with something so fluid and undefined. If it was just simply morphing the standard M2M segment, which has been around for the last 30-plus years, into low-power and next-generation sensor technology, that would be one thing. But, even though, technically, the IoX is still just M2M, but it has assumed a whole new paradigm – intelligence. And that changes the game, significantly.
Adding intelligence affects every segment of M2M; power, security, data handling, communication – everything. On top of that, the fact that virtually every piece of machine hardware — from the simplest toothbrush, to the tiniest motes, to satellites — will be “intelligently” linked, making the sheer volume and ubiquity of devices even more daunting to manage, let alone monetize.
Much of the discussion of how to monetize the IoX has been around simply trying to identify the verticals that have the potential to be monetized versus what will be value-added, maintenance, support or simply the cost of doing business.
There are existing cases. One only needs to turn to the logistics and warehousing segments, where M2M has proven monetization cases in product handling, inventory management, control, product organization and transport, for example. Those segments continues to expand because they have already proven successful in the M2M space.
The industrial IoX and B2B selling environments present the most realistic possibilities. In the business world, there is less resistance to implementing technology that can improve existing models. The IoX promises, in theory at least, optimized supply chains, potential near real-time customization, more options for business customers and more insight into operations and manufacturing processes. All of this can lead to more revenue, higher profits, and, ultimately, enhanced shareholder value.
These are M2M/IoX applications that already exist. There are hard data on what M2M automation has done and, it is quantifiable. Much of what the IoX will be does not yet exist, but here are some verticals that show potential.
However, before trying to figure out how to monetize it, one must determine what the IoX has to offer, that presents value that can be monetized. In that vein, there has been some discussion around the following.
Heightened collaboration – Collaboration has been hyped as, perhaps, the pièce de résistance of today’s best practices for the effective and efficient functioning of the organization and its offerings. Without a doubt, effective collaboration is a powerful tool. When it comes to the IoX, the significant metric that is real-time data. For example, when a complex problem arises, real-time data can involve the essential entities, from anywhere, to form a virtual resolution group. This can reduce on-site costs as well as reducing the time required to resolve the issue.
And, when such data is instant, online, and available to everyone, everywhere, the segments within it (sales, service, support, the supply chain, etc.) can work together, in real time, reducing costs while improving productivity and efficiency. Combine all of these metrics and the result is an improved bottom line.
Better products and services – Once the above objectives are met, the result will be better products and services. Pre-IoX, change came from internal self-reports of failures, shortcomings and analysis of customer feedback. This was often a slow and clumsy process that required many iterations from many sections within the organization that eventually culminated in an assessment and redirection.
With IoX-connected devices, such feedback can be timely and in parallel within all sections within the organization, and provide simultaneous data that can be collated to achieve much faster analysis. This “preemptive” data from machines and devices in the field can be used to alert potential events, such as an abnormal run of failures in a particular device, for example. And getting this information in advance enables field personnel to provide accurate solutions and have the exact procedure in place, ready to go. Such data can also be used to analyze and minimize future problems. Such analysis can then be quickly applied to the operations within the company to affect changes.
Business processes streamlining – This one is pretty obvious. The IoX can enable real-time M2M communications – from office machines to warehouse and production line automatons to supply chain and more. In the office environment, IoX-connected autonomous communications enable less human intervention, which, in turn, reduces errors and Opex. By eliminating the “human” factor, in many circumstances, efficiency is generally improved, margins of error are reduced, and redundancy is less critical.
Improved asset management – The ubiquitous interconnect in the IoX is able to provide information very quickly, often in near real-time. With this, efficient asset management within the production and manufacturing environment reduces downtime. This enables proactive maintenance before performance suffers or costly breakdowns occur. Maintenance can be scheduled using just-in-time (JIT) parts, and at the least disruptive times and coordinate with suppliers for real-time information. Fleets can be optimally managed in real-time, placing specific assets when and where they need to be.
But who is going to pay for what? – One important element of the monetization issue will be the hardware. Obviously, someone has to pay for it, and its infusion into the IoX, in whatever form that happens to be (stand-alone or embedded). And not just your basic sensors, rather, the next generation of intelligent hardware to handle the intelligence and emerging new interconnect. The answer may not be as obvious as the entity that will directly profit from deploying the hardware.
With the present IoX model, most of the benefit is to the asset owner. Therefore, they are the ones who are currently footing the hardware bill. But going forward, that model will change. There is any number of vested interests in a value chain; from the owner to the end-user and anywhere in between.
In many cases, there may even be multiple interests that can end up benefiting, in one form or another. Especially with all the peripheral mechanisms (Big Data, security, value-added, etc.) that will be part of the IoX. There will be an increasing number of intangibles that will become part of the IoX equation, as well.
Whatcha Gonna Do With All That Data – Perhaps more than any other single element, the monumental amounts of data that will be expected to flow across the IoX, will create a plethora of opportunities across a girth of segments.
There will be massive new business opportunities for all types of enterprises, OEMs, wireless/wireline providers, value-added service providers, software developers, third-party vendors, etc. It is a marketer’s dream come true. And each of these components will want to find a way to monetize their particular niche.
Big Data is a radical data analysis concept that will generate billions of dollars and tens, if not hundreds, of thousands of jobs. Globally, Big Data hardware, software, and professional services are expected to reach $138.9 billion by the end of 2020, with healthcare and life sciences being the leading verticals. This, according to ResearchAndMarkets.com’s mid-2020 report.
The good thing about it is that it exists and is real, and the monetizing model is further up the food chain. One sign of that is in the education and training fields. Colleges all around the country are now offering curriculum in Big Data analytics and some of the leading companies, such as IBM are also in that game.
The exciting part is that this Big Data will come, almost exclusively from the IoX. So, at least, there is one platform of the IoX showing monetization potential.
There are lots of other vectors. I have heard all kinds of lateral names such as the Internet of People, the Internet of Vehicles, the Internet of Wearables, etc. These are marketing attempts to try and separate elements so there can be culling out of marketing opportunities. Surely this will continue to evolve.
Whether one calls it the IoT, or the IoX, or some other creative vernacular, the bottom line is, of course, that without ways to monetize it, it will be a struggle. Few, if any entities will put IoX hardware out there for the sake of saying they have it. There will be, as is always the case, some promotional behavior, as with any new venture. But the stakes are high.
The truth is that the IoX is still a fuzzy model. Some elements that will be a part of it, as was discussed in this article, will be easier to monetize than others. Some, such as warehousing and logistics have solid models that show value and advancements. They will meet little resistance to spending because RoI has been proven.
Nevertheless, many areas have little or no history. And some elements will have value in deployment (drones, for example) but little ability to generate revenue. Other elements will just be part of the Opex or Capex (IoX sensors in refrigerators, for example).
The IoX is evolving and elements such as Big Data, smart “X”, transportation, the enterprise, the infrastructure, along with everything else, will present tons of opportunity. And, like any other opportunity, it is nice to be at the forefront. But right now, the front line is moving target.