It still may be many years before the thinking machines of science fiction become reality. No system today can match the reasoning abilities and conversational skills of HAL 9000, the onboard computer from 2001 a Space Odyssey, or mimic humans with the lifelike precision of the androids on HBO’s hit reboot of Westworld. But key aspects of artificial intelligence (AI) are ready for prime time, and they’re taking the world by storm.
Indeed, it seems that everyone wants a piece of the AI pie—and for good reason. It’s powering an ever-expanding universe of smarter gadgets, wearables, homes, cars, and factories. Through enabling technologies like machine learning, natural language processing (NPL), and the Internet of Things (IoT), companies are quickly adding AI functionality to everything from entertainment delivery to financial services, medicine, education, communications, and customer self-service.
As a field, AI is hot and only getting hotter. If you’re a company seeking to monetize AI, the multimillion dollar question is, how can you pull it off and what does the future hold?
Two pathways to monetizing artificial intelligence
In simple terms, there are two main ways you can monetize AI. You can do so indirectly, by making AI part of your products or services, or directly, by selling AI capabilities to customers who in turn apply it to solve particular problems or build their own AI-enhanced offerings.
With indirect monetization, built-in AI capabilities contribute to an offering’s overall value, but are not the sole source of that value. Take the recommendation engines used by Netflix and Amazon, which make use of advanced machine learning technologies and algorithms. While customers appreciate the recommendations AI generates, they’re just one of many factors that motivate customers to subscribe to these services.
Even when AI is the main draw, as with the Nest Learning Thermostat or self-driving cars, those AI smarts, while key, are still just part of the package. One thing’s for sure, however. Whether you package products or services, incorporating AI into them has tremendous potential to drive monetization by making whatever you sell more useful and enticing for your customers.
So how can you add AI to your offers? Companies with deep pockets can emulate Google, Apple, Facebook, carmakers, and telecoms and invest millions hiring teams of engineers, launching skunkworks, and buying up AI startups. But what if yours is among the 99 percent of companies that don’t have those options? Fortunately, there’s a more affordable route.
Direct monetization: AI as a Service
“AI for everyone.” That’s how Salesforce describes its new AI service, Einstein. And it perfectly captures the essence behind the growing field of AI-as-a-Service (AIaaS). As with many on-demand services, it enables practically any company to acquire highly sophisticated capabilities with minimal investment, paid for incrementally through subscriptions or usage-based mechanisms.
Among AIaaS providers, one of the best known is IBM and its Watson platform. Watson understands human speech and can find answers to extremely complex problems in seconds. Watson first made headlines back in 2011 when it beat reigning champs at Jeopardy. Since then, the platform has been commercially applied to a widening range of AI-for-hire tasks. For example, it’s helped doctors at Sloan Kettering Cancer Research Center and the Cleveland Clinic make better decisions about patient treatment from hundreds of thousands of variables. H&R Block is using Watson to create virtual assistants smart enough to complete income tax forms.
AIaaS is a broad category that encompasses many sub-disciplines within AI. Not surprisingly, a number of them, such as machine learning, are now also available for hire. Amazon Machine Learning is a prime example. According to a recent forecast, revenues from Machine Learning as a Service (MLaaS) are expected to hit $20B a year by 2025.
Another area within AIaaS may be even larger. Natural Language Processing as a Service (NLPaaS) has been around for some time, perhaps best exemplified in the speech to text services provided by industry leader Nuance Communications. Other NLPaaS providers such as Speechamatics and Vocapia now offer similar services.
When it comes to monetization, however, the most pervasive use of NLPaaS these days is in chatbots, computer assistants that comprehend text and speech. They’re everywhere. Apple Siri, Microsoft Cortana, Amazon Echo, and Google Assistant are all versions of chatbots. But those incarnations barely scratch the surface.
For example, Facebook Messenger hosts more than 10,000 chatbots. More and more, chatbots are the avatars you engage with in chat sessions on web sites. They’re the personable, human-sounding virtual assistants that answer the phone when you call customer service or support. It’s true that many of today’s phone chatbots are not all that bright. Interactions can be as frustrating as they are helpful. But they’re getting smarter every day. Newer chatbots are able to handle increasingly difficult questions, place orders, make dinner reservations, schedule events, escalate services issues, and more—all without human intervention.
And the wave of chatbots is only just beginning. Thanks to chatbot-as-a-service platforms like Chatfuel, any company can quickly build their own fully-featured chatbox in just minutes.
The implications of AI
AI for hire is the great leveler when it comes to competition. For minimal cost, you can add machine intelligence to an existing product or service that opens up entirely new revenue streams. You can turn your understaffed workforce into a world-class customer service outfit backed by an army of brainy bots who work 24/7 and never call in sick. And you can make your processes more efficient, and your offerings more responsive and personalized. The catch is, of course, so can everyone else.
When all your competitors have access to AI, how will you differentiate? By adding something that AI can’t yet provide and perhaps never will—the human element. Companies that can use AI to better understand their customers as individuals, treat them with the care they deserve, and fulfill their ever-changing needs will thrive as the Internet of Intelligent Things shifts into high gear.