3 companies successfully monetizing IoT data
Companies today increasingly use the confluence of hardware, software, networking and analytics that is IoT to cull insights from the data collected from varied and numerous connected points. To date, most companies have used IoT to increase efficiencies and save money. Now, however, some companies are using IoT to develop subscription services and digital products that are in turn driving new revenue streams for them.
That business model, however, isn’t an easy one to develop, making those companies already engaged in such pursuits on the leading edge of this aspect of the digital revolution.
“The ability to drive top-line growth remains an aspirational goal for many organizations, but has remained challenging,” said Chris Rommel, executive vice president at VDC Research. “With all the talk about new service models and revenue streams, cost-savings use cases are what have had the most impact on the market to date. It is simply much easier for organizations to cost justify an IoT solution investment when they can back it up with a tangible cost model, as opposed to a hypothetical about the creation and expansion into a new market.”
Yet, there are those companies out there that have had success upending their business models to monetize IoT data — including some from very traditional industries.
Otis Elevator Company’s elevators and escalators move 2 billion people on any given day. As a result, the company has collected a trove of data on how people get around. Company executives believe that their data creates insights that have immense value — and now Otis is putting those insights up for sale. The company, which has sold elevators since its founding in 1853 and started selling maintenance about 10 years later, is ready to add the role of data provider to its résumé. “We can share this data and help others make peoples’ experiences more seamless and efficient,” said Chris Smith, vice president of product strategy at the company headquartered in Farmington, Conn. The monetizable IoT data is collected from Otis-connected elevators and escalators, as well as from sensors and beacons positioned around them, and then analyzed alongside data from other sources. Combined, it has helped Otis find patterns in how people move. The IoT story at Otis goes back decades, Smith said. The company first installed microprocessors in its elevators in 1985, before switching to printed circuit boards. It used dial-up modems to collect data from these connected elevators. The data fueled — and still powers — its remote elevator monitoring program, which enables engineers to provide data to mechanics in the field as they work on the equipment. The company’s capabilities to collect data advanced as cloud computing, advanced sensors and more powerful networking equipment came into the market, Smith said. Those advances enable an IoT program that has expanded to include new services that would have been impossible just a decade ago. Today, Otis collects increasing amounts of data about its equipment’s performance, as well as the movement of people. And that data, especially when combined with other information, such as weather forecasts, can help Otis see past patterns and predict how people will move in the future. “Now maybe we could tell coffee shops around a building about what they can expect on a good day, that people will be going there around 11:00 a.m. based on our historical data, so they might want to staff up,” Smith said. “That’s the kind of knowledge we have that we can start sharing, for a small fee, to help others run their own businesses more efficiently.
