IIoT - where innovation meets revenue

It's interesting isn't it that despite the poor economic forecasts, the market for enterprise IoT is still growing at a pretty healthy rate —?21.5% last year according to IoT Analytics.?Admittedly, this is a bit down on what was originally forecast, but by less than a couple of percentage points. And also, with IoT-focused companies, you aren't getting the same kind of layoffs you're seeing elsewhere in the tech sector.?

To me, this is pretty strong evidence that business as a whole is pretty confident about the future of IoT and aren't afraid to bet money on it.

So, this only strengthens my thinking that for manufacturers and service providers, embracing the Industrial Internet of Things is going to be of increasing strategic importance not only in terms of being able to keep up with your rivals but also because these days you've got to be constantly diversifying your revenue streams. Sticking with what you know might feel comfortable but it's not going to protect you long-term. Especially with all the convergence that's going on in the marketplace, you don't even know where the competition's going to come from.

So, if you are a mid-size manufacturer thinking about bringing IIoT into the mix, where's the money going to flow in from?

Well, if the planets are aligned, in other words, you've got the cash, the right kind of product, and are willing to make the deep changes in technology and culture that are needed, then you could implement a product-as-a-service model. Here you charge customers a subscription fee for access to your product and its associated services. Just as with many other things worth doing, this won't be easy, but it will be the most profitable option long term.?

Of course, you could stick with an existing money upfront sales model but offer new specific internet-connected features and services, again on a subscription basis. Here you could look at remote monitoring and control, or production optimization — collect the right data from your connected products and you get new insights into ways you could improve a customer's efficiency and reduce costs.?

For another revenue stream, you could also use the data from your core product to point your customers in the direction of product upgrades and add-on services that would be a good fit for them.?

Do you want more? Well, then add to this training and education. For instance, there's revenue to be made from teaching customers how to use your products and services most efficiently. Again, opportunities that will all add to your bottom line. The same holds for the customization of your IoT products. If people want what you're offering tailored to their needs, then they should pay a premium, right??

In a similar vein, there's predictive maintenance. If you can connect your products to the internet, you can monitor their performance and that means you can create a range of new service contracts to prevent expensive equipment failures. And the more comprehensive and sophisticated these warranties and insurances are, the greater the value they will bring when you sell them.

Some consumables and spare parts for your product may be included in a service agreement, but probably not all, which means there's another potential income stream here. If you want an idea of how to make money from consumables using the IIoT, see my 'Lou's Trailer' blog. I think you'll find it interesting.

Is this an exhaustive list? Maybe not, but I think it will give you some food for thought and certainly some ammunition if you're starting to build a business case for introducing IIoT into your organization.

And if you are and you suspect you could do with a guiding hand to get you over the speed bumps, you might want to get in touch.?