By collecting and analyzing user data, connected devices make it possible to offer an infinite number of services based on current or upcoming needs. This new technological trend allows your company to move from selling products to selling services linked to device usage. Read on to discover more about the Internet of Things.
By collecting and analysing user data, connected devices make it possible to offer an infinite number of services based on current or upcoming needs.
This new technological trend allows your company to move from selling products to selling services linked to device usage. Read on to discover more about the Internet of Things.
What is the potential OF Internet of Things?
According to a study by the GSMA, a professional association of mobile network operators, the global market of Internet of Things (IoT) will be worth 1.1 trillion dollars in 2025. And the total number of IoT connections will reach 25.2 billion dollars in 2025, compared to 6.3 billion in 2016. What exactly is it? The Internet of Things, or IoT, refers to the connection of physical devices to the Internet. In other words, it’s a matter of the increasing use of everyday products that are connected to the web (objects in smart houses, driving aids, connected watches, etc.) as well as professional equipment (medical aids for patients and doctors, for example.)
A rapidly developing solution
In numerous sectors, this development is changing the way that companies approach their customer relationships, as well as the type of services that they offer them. The increasing use of connected objects allows manufacturers and publishers to collect, store, and analyse data on clients’ usage of their equipment. This encourages the manufacturers and publishers to adapt their offers to the users’ specific needs and expectations, based on data collected from their connected devices. In short, they are able to sell solutions precisely adapted to their clients’ needs, in place of or in addition to the product itself. On the other hand, the client can take advantage of measurement tools provided by connected devices to put together adequate service requests.
The Internet of Things thus clearly contributes to the development of the “usage economy,” or “functionality economy”: an economy in which companies sell the use or the usage performance of a product, rather than the product itself. The provider and the client both find their niches: it becomes more interesting for the client to pay the fair price for the benefits that they gain from using an object, and it becomes easier for the company to sell an offer specially designed for a user.
An example of pay-per-use offers with the Internet of Things: Schneider Electric
Manufacturers are already exploring the new possibilities offered by the connectivity of everyday objects and are more than ready to change their habitual way of doing business. For example, in 2016 Schneider Electric, a French leader in electricity management products, launched a platform for the massive deployment of IoT solutions, called EcoStruxure. The goal was to develop equipment (lighting, air conditioning, etc.) and sensors that are placed in buildings and connected to the Internet in order to exploit data, improve everyday consumption, and most importantly, anticipate future needs. Launched two years ago, EcoStruxure has the potential to improve a building’s energy performance by more than half, and to reduce costs by approximately 30%.
IoT solutions are thus contributing to the development of the usage economy. This isn’t just a simple technological trend, but a sustainable movement. According to Iot Analytics, more than 21 billion of these objects will be deployed in the world by 2025.