It’s been an interesting journey over the last few years, watching the concept of the “Internet of Things” mature from geeky thought experiment to what is quite nearly a part of layperson parlance. On the consumer side, the quasi-joke of the “connected toaster” has become the reality of the connected refrigerator, connected fitness bracelets are now ubiquitous, and there are virtually no auto manufacturers left who haven’t come to market with some kind of offering that tethers to an always connected vehicle. And on the B2B side, penetration of IoT-based applications in fields like construction, manufacturing, fleet management, and warehouse automation is at an all-time high with no signs of slowing down.
From a monetization perspective however, and directly resonant with a message that Aria has been touting for years now, there was a very simple lesson that needed to be learned by “thing providers” on a large scale before the IoT-adoption floodgates could truly open. Simply put, the lesson is this: Success in IoT will come from the monetization of the services a connected ‘thing’ enables, and not from the direct monetization of the ‘thing’ itself.
Over the past couple of weeks, the biggest names in tech have announced impressive results and strategies that directly echo this directive:
- The reliability and growth in Apple’s many recurring/subscription services buoys the company amidst declining iPhone sales.
- Viacom will launch its own streaming service, removing cable providers and their set-top-boxes as necessary intermediaries between them and consumers.
- Ditto Disney.
- The New York Times announces record earnings, bolstered by a huge upsurge in their digital subscription business.
While purists will argue that the examples above don’t all necessarily constitute ‘true’ Internet of Things applications, I would differ with them on a couple of levels. Firstly, like any ‘true’ IoT application, all of the stories above involve some kind of ‘removal of dependence’ upon a previously accepted physical delivery platform in order to gain access to recurring customer revenue. Secondly, the larger mega-trend at play is and has always been that efforts to increase market share and revenue by focusing on the thing that delivers the service, be it a phone or a car or a bracelet or a set-top-box or a newspaper, are misguided in today’s world. Consumers and businesses alike are eager to enter into long-term, annuity-paying relationships with providers that deliver value, no matter what means they might happen to use to gain access to that service on one day versus the next.
Is there a nice way of saying “I told you so”? Perhaps not, if it’s I who does the telling. Thankfully, I no longer have to.