Successfully Mining the IoT Gold Rush

Tom Canning, VP of IoT and Devices, Canonical

Tom Canning, VP of IoT and Devices, Canonical

We’ve been hearing for some time now that the Internet of Things (IoT) will herald a new era of, well, things. Everything in fact. From consumers being completely connected to each other as well as the world around them, to businesses being enabled to build advanced products and new business models alike. With the IoT market expected to grow to USD 561.04 billion by 2022, there is a massive opportunity for people to stake their claim and dig for IoT gold.

Despite IoT being a ‘hot topic’ for several years now, it’s clear that many still grapple with the best approach to get started, and those that have, are struggling to turn a profit or gain genuine business benefit from their investment. This perspective is validated by Canonical’s global survey of IoT professionals, which identified “quantifying ROI and providing a clear use case” as the #1 most immediate challenge for the IoT.

The early IoT has been a ‘gold rush’, with entrepreneurs jumping in to secure their share of an exciting and rapidly growing new market. Unfortunately, every gold rush has its losers with over two-thirds of IoT projects destined to fail.

There are many reasons for these failures — the most common is often a basic and seemingly obvious one. Too many businesses and entrepreneurs fail to set out proper, clearly-stated goals and measurements. As such, they struggle to determine whether the project is succeeding or failing, and where they’re up to at any given point. The same is true of budgets. Under-funding or under resourcing any IoT exploration is merely wasting and energy as success requires investment in both available budget to spend and trained talent to execute.

After that there’s the big question; is your business model even valid? In a market where so many of the business models and applications are untested, it’s important that business leaders don’t jump in at the deep end, but rather ‘ramp up’ their project’s gradually. Investments in IoT tech should be trialled on a small scale, iterated as early deployment feedback is received before attempting to deploy widespread across an entire organization or field deployment.

We’re now almost halfway through 2018 and, start-ups, businesses and entrepreneurs are looking for new ways to ensure IoT investments are driving financial growth and that business models will remain sustainable and lucrative in the future.

The early IoT has been a ‘gold rush’, with entrepreneurs jumping in to secure their share of an exciting and rapidly growing new market

At the forefront of this is a change in the way that businesses monetise their IoT offering.

Here are four initial steps to get started on your journey towards an effective, and profitable, IoT-led business:

1. Think about the intangible

Making the jump into a new IoT driven business model means so much more than just connecting processes to a dashboard or converting existing products into ‘smart’ devices. An effective approach to IoT must look beyond connected products and start to strategically consider all the ways that the IoT could improve profitability or deliver increased efficiency throughout an organisation. This could include streamlining services through improved analytics, selling additional services as apps or add-ons, or simply selling advertising data from existing smart devices. The possibilities for both cost-savings and profit generation go far beyond the initial sales of devices.

With IoT specific operating systems allowing users to install new functions onto their products, a growing number of businesses are using IoT app stores to generate new revenues, increase their ROI and extend customer relationships. Through this model, users receive the latest features without having to buy new devices or experience additional hardware costs. This provides greater security and functionality but also a long-term revenue source by increasing customer retention and device use.

2. Look outside your window for new skills

The IoT covers a vast array of technical and business applications; as such it is very difficult for any one individual to call themselves an ‘IoT expert’. Instead of attempting to develop all knowledge internally, don’t be afraid to look beyond traditional hiring streams and turn to employees and experts from outside of their own fields.

3. Combine strengths to avoid risks

Collaboration will be a key part of broad IoT adoption. Much of this required collaboration will be driven by business leaders but technology will also have a key role in ensuring that brands work together to develop a stronger infrastructure for the IoT marketplace. The IoT market will continue to suffer from the same security issues that have been its Achilles heel - so building a robust operating environment will be critical. Through the use of software apps and IoT specific operating systems it’s possible to guarantee that products and services are built on a stable, unified platform – offering greater opportunities for team collaboration and cross-device developments and security upgrades.

4. Connect with the industry

Many of the best IoT innovations will not come from a single source, but rather from the interactions between different IoT platforms, processes and devices. The profitability of IoT does not lie in the physical devices themselves, but rather in the new connections that those devices provide. Often it is these connections – and the unique data and insights that are derived from them – that will provide the greatest opportunities for profitability and business growth. In order to succeed in the IoT space, brands must be able to survey and spot these connections, leveraging the data available from their various IoT endpoints to identify weak spots, unexpected cost centres and unexplored gaps in the market. It is by applying a systematic approach of exploring and testing the unknown - that successful IoT discovery can occur and a company can strike true IoT gold.