Some of that market is beginning to materialize, he says. Financial trading companies are buying cargo ship transit and port arrival information. Utility companies are buying building and appliance energy-consumption data. Smart home companies are selling data to advertisers and insurance companies.
IoT principle 9: Disrupt the industry-value chain by exploring new products and services
Innovation is the name of the game. IoT creates opportunities for expansion up and down the value chain, Rossman says. "Enter business in one place in the value chain," he says. "Then maybe partner heavily to get an overall solution. Learn the industry, looking upstream and downstream. Look for indicators of bad customer experience or trapped excess margin. Then look for strategies that would disrupt that industry value chain through IoT."
A value chain is the end-to-end set of processes and activities for an industry, Rossman says. Imagine, for instance, an HVAC system provider. Its customers are commercial building manufacturers. It could install sensors that would allow it to take responsibility for maintenance of the HVAC system in an as-a-service model, creating a new revenue stream while reducing the building manager's maintenance burden.
IoT principle 10: Build a flywheel for your IoT strategy
Many executives these days are big fans of Jim Collins' management treatise, Good to Great: Why Some Companies Make the Leap… and Others Don't. In the book, Collins asks readers to think about their business as a flywheel: Put your effort into identifying the factors that will generate and sustain the most momentum in creating growth.
Rossman says that if you have a clear understanding of the systems dynamics — the flywheel — of your business, you can then use IoT to identify and execute on opportunities and risks in your business.
"As you're developing your IoT strategy, seek to gain insight into who the right partners might be, where the threats might be," he says.
For instance, he says, the big plays in IoT — the ones that will drive billions of dollars in revenue — won't be rooted in proprietary connected devices themselves. Instead, the opportunity will be in providing the infrastructure and tools to help other companies and developers to design, build and operate their own IoT capabilities.
You need to understand the moving pieces that will give your IoT flywheel the momentum to carry you to bigger and greater things.
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