How the IoT changes business models

The continuation of these trends will lead to new business models. We predict some of the following and this is by no means the entire list. There are models that will emerge that we cannot comprehend today:

• Revenue sharing models: It is based on the efficiencies created by using IoT and advanced analytics. As an example, General Electric (GE) produces smarter wind turbines for its renewables business. These wind turbines have several sensors and IoT applications that can gather and harness data, combine with weather data, and predict service operations and maintenance opportunities. GE upgrades the existing install base at the customer site for no cost and the costs saved and additional revenue generated by the customers are shared with GE.
• Service ownership models: Existing product companies will package their offerings as services and take ownership of the end to end delivery for the service. So essentially, they are not selling them outright but rather leasing them and moving to a product as a service model.
• Data-driven business models: It will become prevalent as businesses deploying IoT solutions will gather a variety of customer data. So, they essentially become custodians of their customer data and, in partnership with the customer, they can use this data to generate additional revenue by packaging and selling it.
• Efficiencies in the supply chain: It will result in eliminating unnecessary middle layers and hence, generate additional cost optimizations.