When it comes to monetizing the Internet of Things, it can appear that consumer scenarios are where all the action is. Connected cars, homes, kitchen appliances, connected clothing — connected wrists. If you’re a B2B company, you may be feeling left out of the party. Fear not. Your RSVP is waiting. In fact, the market potential for IoT may be as large for B2B companies as for B2C, if not larger.
Here’s a look at just a few of the burgeoning IoT opportunities in store for companies that serve business-to-business customers.
Business Versions of Consumer Offerings
It’s true; many IoT offerings do indeed target consumers. But often, those same products and services are equally applicable to business. A prime example is DropCam. With its namesake consumer version, you can keep an eye on hearth and home from anywhere. Its commercial counterpart lets you do the same for your small business.
And if you’re curious, the recurring revenue angle for DropCam comes not from its cameras, but from the cloud recording and storage of the video they capture, services that employ a subscription billing model.
Dual business and consumer use cases like this exist across the spectrum of IoT offerings, from smart watches to smart bands and beyond.
B2B Middlemen: An Essential Link
Some IoT products will be simply too costly for many consumers to buy outright. Enter B2B middlemen and subscription billing. Consider the growing market for IoT-connected weightlifting and fitness equipment — or “smart dumbbells” for the oxymoronically inclined.
These pricey systems automatically track the progress individual gym-goers make over time. They remember precisely how much weight someone lifts, how many times, how far they run, how fast and so on from one session to the next. A real boon for any fitness buff, if only they could afford it. Thanks to companies like UK startup Gymtrack, now they can.
Gymtrack is rolling out IoT smart workout gear to businesses, namely fitness clubs, which will in turn make them available to their customers through their monthly membership fees.
This same trend is unfolding in industries such as healthcare, where the high cost of IoT-powered diagnostic and imaging systems is being offset by similar B2B arrangements and recurring payment schemes.
The Amazing Colossal Industrial Internet
How large is the market potential for the Industrial Internet? Estimates vary, but the consensus is: BIG. As in somewhere between merely ginormous to unprecedented in human history. Indeed, Cisco CEO John Chambers puts the number at an eye-popping $19 trillion over the next decade. Whatever figure you go with, B2B companies stand to claim a healthy chunk of it.
The Industrial Internet is extending far beyond the factory floor, where automated systems, RFID, telemetrics and other IoT innovations have been in use for years. IoT is transforming supply chains, ERP and distribution across diverse industry verticals.
It’s also launching a new era in predictive maintenance. For example, NCR is using IoT connectivity to monitor the tens of thousands of ATMs and cash registers at its customers’ locations to anticipate when individual units need to be serviced before they cause problems. Examples of industries that are doing likewise include fossil fuels and alternative energy.
Data Packaging: Turning Information Into Products
Extraordinary B2B opportunities await companies that can provide the infrastructure and services required to make IoT a reality. IoT enablement is an enormous topic, which we’ll cover in upcoming posts. For now, let’s take a quick look at opportunities in just one aspect of it — data packaging.
In the NCR example in the previous section, machine data is the critical piece that makes predictive maintenance possible. In this case, IoT data is a means to an end. It serves the ultimate goal of improving the performance of deployed machines and devices. But increasingly, IoT data is not just a means to an end; it’s the end itself, the product, if you will. Think of it this way: it’s the health data from a patient’s wearable device that matters, not the device itself.
IoT startup Xendo is tilling this fertile ground. It’s a specialized data packager that uses aspects of IoT such as machine learning to extract information for its customers. Worth noting is that Xendo can monetize IoT without having to deploy and manage its own devices. Instead, the company harnesses its customers’ IoT data.
With Xendo, you can quickly find individual emails, documents, spreadsheets and more across dozens of disjointed cloud applications, including Salesforce, Gmail, Office365 and Evernote. Xendo’s basic service is free, with monthly fees for more advanced search features.
Xendo’s business model works because its customers put a high premium on quickly finding specific files lost in seas of cloud data. Data is the lifeblood of practically every industry today. And it will only become more so. B2B companies like Xendo that can add incremental value to IoT data chains are poised to make substantial gains as IoT adoption unfurls.
The recurring revenue examples presented here give you just a small glimpse of a truly vast landscape. Rather than being mere bystanders in the ever-expanding IoT revolution, more often than not, B2B companies will be the driving force behind it.