Benefits of IoT-based business models

The term Power by the Hour was coined in 1962 when Rolls Royce started to offer a complete engine and accessory replacement service on a fixed-cost-per-flying-hour basis. Today this is a widespread business model in various sectors, known as Subscription Economy. Companies like Amazon, Netflix, Zipcar and many others have adopted this model.

The airlines do not have to pay for the engine up front, which requires a different project finance design and a higher working capital from the manufacturer. On the other hand, suppliers increase the customer base, boost profitability, and establish a better model to face an economic crisis, when engine use downturns from 10% to 20% while sales are entirely interrupted.

This 60-years-old business model is now delivering a better value proposition due to IoT and the Artificial Intelligence ecosystem.

These are some of the benefits related to this IoT-based Business Model:

1. Accounts Receivable & Cash Flow: the engine manufacturer receives near-real-time (NRT) information from the equipment installed in the airlines and may issue daily invoices. The enabling technologies may include IoT and RPA, and reduced account receivable improves cash-flow and financial performance.

2. Customer Loyalty: operational data from airlines flying around the globe feeds descriptive machine learning models, and operational scenarios are developed to improve passengers' flying experience.?

3. Unexpected conditions: the data lake originated from massive IoT flows allows predictive models to recommend maintenance when required, which balances performance and lifelong total ownership costs. More sophisticated solutions use AI-embedded digital twins capable of autonomously reacting to unexpected situations such as unexpected weather conditions change.

4. Operational Costs: operational NRT data associated with GPS information are submitted to machine-learning algorithms that predict ideal parameters during take-off and landing, resulting in lower fuel consumption. Predictive models create recommendations to the pilot or autonomously adjust the aircraft systems.

These are some of the possible benefits ....

?? What other benefits these manufacturers may have by adopting an IoT-based business model?

?? Please share examples of other industries that already benefit from IoT-based business models.