Internet of Things: Shift from Products to Services

Dateline: August 8, 2014

Welcome to our Friday WRAP – one thought-provoking idea to think about over the weekend.

This week’s idea comes from two articles published this year at Information Age, a UK-based website for IT leaders, on the Internet of Things (IoT). The first, published earlier this year, is titled, 4 things that will happen in the Internet of Things space in 2014.  In that article, the author predicts that in 2014, one of the key transitions will be a “shift from selling products to selling services.”  The prediction suggests,

The IoT offers product manufacturers and retailers the opportunity to generate ongoing revenue streams from selling services to support connected products, rather than the products themselves. This is a fundamental shift in the vendor/buyer relationship. What was once a ‘one-off sale’ becomes a service-oriented relationship where the vendor can anticipate the customers’ needs in advance by working in real-time with product data. In 2014 we expect to see more manufacturers take a fresh look at how useful services can be incorporated into their products.

The second article, Under control – why data management is key to unlocking the potential of the Internet of Things, discusses the emerging use cases,  

Data from the Internet of Things is driving new use cases across a range of industries. So-called ‘intelligent buildings’ optimise energy use based on actual occupancy. Fitness trackers help individuals better control their eating habits and sleep patterns. Implementing such use cases requires advanced research on this new data. It entails exploration, intuition, trial and error, by data scientists. Once models and algorithms have been defined, they need to be operationalised – implemented in real time.

The Internet of Things is already having a large impact on a number of industries, as businesses figure out how to harness the opportunities that arise from adding information to their products and turning their relationship with customers away from the product and towards the services they can provide with the information they generate and collect.

How can your organization harness the IoT?  What information can you generate around your products?  How can you add value by moving from a product-based relationship to a services/information-based relationship?

That’s a WRAP!  Have a great weekend.

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