IoT Business Models: What You Need to Know

The advent of IoT technology has introduced the world to various advantages. By reducing the gaps present between the user and digital world, IoT is leading the way to digital transformation and quickly becoming a vital technology.

IoT technology makes it possible to create a viable business model. ultimately triggering a digital transformation in almost every sector. As devices are intrinsically connected and can generate data, they're capable of generating a brand new revenue funnel as well.

IoT is constantly evolving making it important for businesses to stay updated on various forms of technology for their businesses. Only then can one find the right IoT business model. Here are a few of the most popular business models that businesses can utilize for increased revenue and growth.

Outcome Business Model

The thought behind the outcome-based model is to pay for only the end result. This type of model is popular in transportation services.

This model makes it so an individual doesn't have to buy a vehicle on their own. There's no need to spend a significant amount of money if you aren't planning to utilize the vehicle for maximum time. Instead of buying a vehicle, one can simply rent a mode of transportation such as an electric scooter.

The outcome business model can be successful in many industries due to:

• Less communication cost
• Excellent business model
• Fewer batteries cost
• Secure payment system
• Follows green policy
• Minimal traffic regulations
• Bike-sharing

Platform Business Model

The platform-based model is not the latest addition to the list. The platform-based model assembles producers and consumers to eradicate the possibility of clashes in a beneficial marketplace. This way, the owners can generate revenue from transactions. The two major keys in developing IoT-based business model are interoperability and interconnection. With many systems being developed separately or inside the same company, the platform business model is a popular choice for large companies such as Amazon.

Amazon's aim is to collect third party data and partners with the help of Alexa's voice recognition and IoT technology. Voice recognition has been present in the industry for a while. However, combined with IoT, voice recognition will only continue to mature. As a preferred voice recognition platform, Alexa allows Amazon to charge companies for the development of applications increasing both their revenue and reach.

Compliance Monitoring

Every year manufacturers spend a significant amount on compliance. It's very costly to run quality assurance checks with varying safety, economic, and environmental regulations. Compliance monitoring is keen on finding ways to reduce the level of expenditure to some extent. IoT technology has provided help to businesses heading in the direction of compliance monitoring.

IoT can remotely keep a check on and monitor essential compliance metrics. This not only reduces cost, but also makes the process much more responsive. Safety in processes can be maintained as IoT-based devices provide updated and constant information in real-time. In non-compliance orders, the responsiveness reduces the number of penalties and maintains the safety of workers.

Asset Tracking

Supply chains are one of the most enthusiastic adopters of IoT technology. Asset tracking affords shipping and logistics companies the ability to boost their supply chain visibility with minimal cost. Connected devices can identify, monitor, and track any asset in real-time. This is a great way to eradicate the loss or theft of an item. This business model can also be used to keep the entities in the supply chain updated. Not only does asset tracking increases visibility, but it also reduces inefficiencies.

Preventive Maintenance

Just as IoT facilitates compliance, it can also help to protect valuable in-field assets. Highly expensive equipment is maintained with the help of an on-site inspection. With on-site inspections, imperfections can result in financial losses and decreased efficiencies.

Thanks to IoT-based devices, it's possible to keep a check on equipment maintenance. Devices can also be deployed to remotely monitor equipment, prevent malfunction and track maintenance schedules, to name a few.

IoT-based business models are continuing to iterate and improve. If businesses are interested in IoT, they should look into its many business models to improve efficiency and assist in digital transformation.