The Internet of Things is bringing new opportunities for businesses by creating new markets and a new economy. IOT providers have figured out that businesses not consumers are the new go to market strategy, and have set their targets on the more lucrative B2B model. So what is the most favorable strategy?
IOT Solutions are separated into three sectors: government, home, and enterprise. While the government and home sector are large by their own accounts. It´s the enterprise market that will be the biggest revenue generator, by the simple fact of having a greater number of connected devices. Also, corporations have the operating budgets to implement IOT solutions and the purchasing power to buy products and services in large quantities.
IOT providers are looking to make a big impact in the manufacturing vertical in areas of asset management, remote site automation, smart manufacturing, and predictive maintenance. The viable economies of scale for IOT will most likely come from managing and analysing data gathered by custom enterprise level packages along with industry vertical applications, product design, and hardware.
What about partnerships? Network equipment vendors, analytic companies, and cloud service providers are all good potential fits for aligning strategic partnerships. The recent announcement of Nokia and Hewlett-Packard Enterprose(HPE) entering into a strategic collaboration to jointly market and offer a range of IOT Enterprise solutions shows the speed at which the technology is being embraced.
According to Bain, IOT annual revenue could hit in excess of $470 Billion by 2020. This includes IoT vendors selling hardware, software, and specialized services. It´s difficult to predict an accurate IOT market growth rate over the next five years. But if we have 15 billion connected devices for 2016 and with a conservative 25% annual growth rate, we should at least have 45 billion connected devices by 2021.
The IOT opportunity for businesses can come from:
- Innovation in the form of reducing time to market by improving business processes and increasing return on investment.
- Creating use cases to generate new revenue streams.
- Tracking assets using sensors and gaining real time insights, finding issues, and preventative maintenance.
- Improve safety and security to help monitor operations and minimize risks.
- Improve human resource managment and productivity.
The winning strategy for IOT providers should focus on developing only a few targeted solutions and excel in that area to gain the most traction. IOT service providers should offer an end to end solution that allows interoperability without the uncertainty of customer integration problems.
Where are we headed with all this this new data analytics. Well, here´s a chart of our journey to IOT Wisdom.
Companies have started to embrace IOT solutions and now see the disruptive landscape of this new market economy. The future is already within sight and 2017 promises to be an exciting year for the internet of things.