The 6 ways to make money in IoT

Geek Speak

Connect your things, solve problems, make money. Learn how you can deliver recurring, continuous value with these six IoT business models.

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According to the McKinsey Global Institute, IoT will have a total potential impact of up to $11.1 trillion a year by 2025. With so much opportunity, it makes sense why so many companies are looking to connect their devices and enter the IoT arena.

But simply adding an internet connection to your widget doesn’t mean your business will make immediate profits. IoT products come with significant ongoing costs – web infrastructure, networking, and other connectivity and data-related costs. If you can’t justify the additional value to your customers, those costs will eat away at your margins.

The most successful IoT products are those that deliver recurring, continuous value for your customers (and recurring revenue for you). While there are a lot of ways that companies can create value through connected products, we’ve found that there are six different primary ways companies make money off of their IoT products

1. Tracking your assets

Moving assets from one place to another is still a pretty manual process, which creates a lot of inefficiencies. Products get lost, or “fall off the back of the truck” – stolen and sold on the black market. Rented equipment – from cars to construction equipment – are stolen. Stores are either carrying too much inventory of the products they sell or they’re constantly out of stock. These inefficiencies all have the same source: imperfect information about where things are and how they’re being used.

According to Business Insider, IoT technologies are expected to have a $1.9 trillion impact on the logistics and supply chain management industries. That’s because IoT technologies like asset tracking allow companies to monitor their logistic operations more accurately, which also helps them make better decisions and save money. For instance – if you oversee a fleet of trucks, how do you know if your drivers are deviating from their routes or are behind schedule? If your trucks/containers/packages are being tracked, you can identify potential problems quickly and solve them before they become bigger issues, saving money along the way.

2. Preventing machine failures and maintenance issues
Things break. When they break, problems happen. If you can avoid maintenance issues, you can avoid the problems that result from those failures – and that saves money. In fact, industry experts report that preventative maintenance can provide up to 545% ROI for businesses.

For example: Alert Labs uses smart water sensors that help customers detect leaks and provide insight into water consumptions. Consumers can place these sensors underneath water heaters or other appliances that are prone to leaking, which helps them protect their homes from machines failures and can curtail maintenance issues before they become bigger problems. With continuous monitoring, Alert Labs provides constant protection for the customer, which also helps them make money through their monthly monitoring plans.

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