Where does the real revenue in the Internet of Things lie? It’s probably not in some sort of gizmo you have to sell. Surprisingly, the revenue is in ongoing services, not the “thing” itself. (Video)
“The greatest opportunity in the internet of things is transforming a product business into a service business. Once a static product is connected, it becomes a service opportunity,” said Jahangir Mohammed, CEO of Jasper, which offers its own IOT management technology used by ABB, Starbucks and others and also manages and brokers agreements between service providers. Jahangir spoke at Gigaom’s Structure Connect 2014 event on Wednesday.
When it comes to the arena, tangible products — fitness trackers, home sensors — are trojan horses to get customers interested and hooked. But a one-off sensor has limited value. Aggregating the data from that sensor with other collection points in your home, on your commute to work, so that your house is not overheated or over air-conditioned and your commute is as short as possible, is probably worth additional payments.
“There are many ways to market — things will be bought through traditional retail or online channels. But the service that brings together all the data, aggregates it and applies analytics to it, is where the money is,” said Bob Hagerty, CEO of Icontrol Networks. Icontrol offers a home security service that wields HD cameras and sensors that can connect via Wi-Fi or Zwave to other IOT gear. Knowing that your home is safe — from fire, from break-ins, from flooding — is something many travelers would be willing to fund for years to come.
Photo credit: Daily Reckoning