How to make IoT in business work for you
Finding a business model that secures your enterprise’s future and enables a competitive advantage requires thinking out of the box. Who would have thought that a subscription model could solve a mundane but necessary task of buying socks? Or, can you imagine the automotive industry where new car designs and models are publicly crowdsourced? That is disruptive thinking.
Business transformation is about a mindset and affects how we perceive and understand the ecosystem surrounding the business. Within the Internet of Things (IoT), the mass deployment of sensors and high-resolution data enables new business models for industries that have been primarily driven by physical products. It creates tremendous pressure to transform! IoT cellular connectivity offers many market opportunities when high-resolution data insights and measured customer value are combined. It enables new monetization concepts, which are the heart of business models.
IoT platforms have a key role as an enabler to design and implement new, potentially disruptive business models. The advancement and orchestration of the business ecosystem should leverage those platforms to co-create customer value.
During Ericsson’s IoT Day Stockholm this past September, we heard interesting examples of business model innovation in motion and the hard work required to move ahead.
Smart Workplace Solutions
Steelcase, a market-leading manufacturer of furniture for offices, classrooms, and hospitals, presented how they are creating a new business model to offer a subscription to customers for smart workplace solutions. Smart space management tools, digital wayfinding, and new collaborative solutions are redefining the traditional workspace.
To ensure new business models become a reality, Steelcase strives to simplify the communication layer in smart offices that currently relies on a mesh of technologies. Providing effective gateways to connect sensors and access data is key to fuel engagement and improve organizational performance. Collaborating directly with communications service providers (CSPs), Steelcase sought a simpler solution and recognized how cellular IoT and Narrowband IoT (NB-IoT) could support their needs. Based on this early cooperation, both Steelcase and service providers worked on the proof of concept and built a roadmap based on a mutual understanding of business needs and technology readiness.
Sony NCE provides mSafety platform which combines a wearable and a cloud base platform connected to the IoT Accelerator. The platform is provided for B2B and targets remote health and personal safety segments. One of Sony’s partners, 8West Consulting, provides a Search and Rescue for near-shore sports activity called SafeTrx. In particular, SafeTrx offers a tracking system to help the Coast Guard and Search and Rescue agencies around the world to find and assist people in distress at sea.
From the start, the business model is a simple one based on hardware and an annual service and subscription fee. However, the requested and preferred business model is to have a more value-based version. A model based on a low fee subscription for normal monitoring and tracking services or a premium fee for an isolated rescue event has been discussed. In all rescue cases, connectivity, power efficiency, latency, and priority of service play a central role. By creating safety services and applying differentiated monetization schemes depending on the service value created on these devices, Sony is developing its current business model.
Collaboration and scale are key
During the IoT Day panel discussions, executives from Steelcase, Sony Mobile, and Telenor Connexion concluded that CSPs need to support enterprises to find solutions for connectivity requirements. It requires interaction, working on different models, and stakeholder involvement at an early stage.
Scalability is important for enterprises and CSPs to make things happen. “Solutions such as those developed by Steelcase and Sony are dependent on a global scale,” says Cristoff Martin, CMO from Telenor Connexion. “Working with global IoT connectivity providers such as Telenor Connexion, solutions can be efficiently developed and operated. However, collaboration models between CSPs should evolve to help realize the full potential of Mobile IoT at the international scale.”
In this context, Anders Strömberg from Sony highlights, “being innovative is a challenge by itself. It’s not just about coming up with new ideas, but to realize them.”
”5G, cellular IoT and the platforms behind them will create a new global foundation for digital transformation,” says Usam Shen, Innovation Leader from Steelcase. ”By being able to access new services to support this shift, companies like ours can stay focused on IoT applications in the workplace that create great work experiences for our customers.”
IoT drivers and beyond
The panel identified several drivers of the current IoT market. The need for IoT solutions has been around for some time, but the technology has not been mature nor affordable. The increasing availability of high-resolution data due to IoT allows industries to create new (service-driven) revenue streams and to improve operational efficiency.
Overall, Steelcase and Sony are good examples of disciplined and continuous hard work required to move beyond the boundaries of a single company. Exploring new business models, sharing a vision, and defining an IoT roadmap can enable the market to develop and mature. It is not only a challenge for one company or industry; all of us can play a role in creating a larger IoT footprint: “Let’s take on IoT together!”