Enterprise Internet of Things
(EIOT)
CT121-3-2 & Version VC1
IoT Business Model
Topic & Structure of The Lesson
• IoT Business Models
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Learning Outcomes
• At the end of this topic, You should be able
to
Identify the IoT Business Model
Identify the suitability of model based on the
IoT infrastructure
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Key Terms You Must Be Able To
Use
• If you have mastered this topic, you should be able to use the following
terms correctly in your assignments and exams:
– IoT Business Model
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Lecture Content
IoT Business Model:
i. Subscription Model
ii. Outcome Based Model
iii. Asset Sharing Model
iv. Razor Blade Model
v. Monetize your IOT data
vi. Pay-Per-Usage
vii. Offer a Service
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IOT Business Models
What is a Business Model?
“A business model describes the rationale of
how an organization creates, delivers, and
captures value.” – Alexander Osterwalder
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IOT Business Model
An IoT business model:
• Focuses on capturing and delivering value.
• Leverages the unique characteristic of IoT
products of having 24/7 connectivity to your
customer’s environment to produce innovative
and differentiated value.
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IOT Business Models
1. Subscription Model
product to implement many of the benefits
available to software-only products.
Example:
system that includes both software and hardware.
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IOT Business Models
2. Outcome Based Model
Customers pay for the outcome (or benefit) the
product provides, as opposed to the product
itself.
Example:
Sophisticated pump manufacturer who creates a
next-generation pump that monitors the amount
of water it pumps.
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IOT Business Models
3. Asset Sharing Model
Buying expensive equipment is whether the
customer will be able to utilize the equipment to
its maximum capacity. This is where the idea of
sharing assets comes into play.
Example:
Deploying smart batteries for commercial
buildings at Stem, Inc.
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IOT Business Models
4. Razor Blade Model
This business model can be very lucrative
for products that have consumables
needing constant replacement.
Example:
Amazon Dash Buttons
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IOT Business Models
5. Monetize your IOT data
Line extension of your core business, meaning you
can start by solving the needs of your end user,
and later you can decide to branch out into
monetizing their data.
Example:
LinkedIn or Facebook
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IOT Business Models
6. Pay-Per-Usage
Goal is not to make money on the device itself.
Instead, you are using the data produced by the
IoT device to track usage.
Example:
Metromile is a San Francisco-based insurance company.
Their goal was to create an innovative pricing structure for
their car insurance product while solving the challenge of
San Francisco residents who don’t use their car very often.
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IOT Business Models
7. Offer a Service
IoT product can be an enabler and differentiator for
your company to sell a service.
Example:
Use an IoT product to monitor machinery, predict
maintenance, and then sell a maintenance
contract.
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Quick Review Question
• Identify the IoT Business model available.
• Applications of IoT business model towards
IoT infrastructure.
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Summary of Main Teaching Points
• IoT Business Model
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Question and Answer Session
Q&A
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What we will cover next class
• Chapter 3
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