Monetizing Your IoT Project
One of the biggest challenges in getting funding for an IoT project is being unable to monetize the results. Complete IoT solutions often cost a lot of money – new hardware needs to be purchased and custom software needs to be created. When asked to justify the cost of a solution, many people focus on how much money their group will save – whether it’s preventing downtime or optimizing a process. However, many times reducing costs alone isn’t enough to justify starting such a large project. Business leaders are more likely to approve a project that not only reduces costs, but also generates revenue.
One way to create revenue from an IoT project is to form channel partnerships. So, what exactly is a channel partnership? Think of it as partnering with another company that can give your current customer an additional service that you can’t provide. For example, think of Opentable. Opentable partners with restaurants across the US to let diners make reservations at restaurants online or through an app. For each reservation that is made on their app, Opentable gets a fee. So, restaurants get more seats filled, customers can find reservations easily and Opentable gets revenue. A win-win-win.
So, how can this be applied in the world of IoT? The answer is – in many ways! For example, the consumer space, if your smart-product realizes that it’s running low on something, it can proactively schedule an appointment for you. For example, your car “realizes” it needs an oil change – it can inform you of this and then ask if you’d like to make an appointment at a service station to get an oil change. This situation would benefit you, because you don’t have to worry about missing an oil change, and it would benefit your car manufacturer – they would be a channel partner for service providers and receive a percentage of the cost of the oil change. Much like being the OpenTable of oil changes.
This could also work in a manufacturing setting. For example, if your machine detects that a part is going bad, a plant manager could be alerted that the part is nearing the end of its life. The plant manager would then be given different options of purchasing that part and scheduling a time to replace the part with a service provider.
There is even potential in the public sector to increase revenues by teaming up with channel partners. Kiosks in public places could not only give tourists (and locals too) information on the city, but users could make reservations at a nearby restaurant for dinner or get tickets to local attractions through the kiosks. Thus, providing a service to the user and also generating revenue for the city. For more information on smart city revenue streams, check out our smart cities blog.
IoT solutions that reduce costs are important, however, its solutions that also add revenue that will be game changers. So, when it’s time to start an IoT project, think not only of how you can reduce costs, also of how you can add to the bottom line. Solutions like these, will be much more likely to get buy in from decision makers.
This article was written by Rebecca Haass and originally was published here.