The ability to connect just about anything to the internet has captured the imagination of businesses and consumers worldwide. In 2013, more organisations took the first tentative steps towards using the Internet of Things (IoT) to optimise their business and generate new revenue streams, producing a new generation of connected products and accompanying services.
By the end of the decade, 1 trillion objects could be connected to the Internet, generating anywhere between $1.2 trillion–$14.4 trillion in revenue. 2014 will see the industry move closer to making this prediction a reality.
Chad Jones, Vice President of Product Strategy at Xively, shares his predictions for the IoT in 2014:
Transition from ‘what and why’ to ‘when and how’
“Three-quarters (74%) of c-level execs in medium-to-large businesses expect the IoT to play a large role in their business’s products within just three years. Product manufacturers now recognise that value can be added by connecting their products to the internet and in 2014 we expect to see a shift from ‘what and why’ to ‘when and how’ as more businesses begin experimenting with the IoT and take the first tentative steps towards developing internet-connected products.”
Businesses will connect existing products to the IoT
“While the IoT makes a new breed of products possible, it also offers companies the opportunity to unleash new revenues by adding value to existing product lines. In 2014 more businesses will look at how they can change and improve existing products. For example, pet collars could be connected to the internet so that owners can keep track of where their cat is through a Find My iPhone style service and receive an alert when their cat is at home or if it stops moving while out and about.”
>See also: The Internet of Everything
Shift from selling products to selling services
“The IoT offers product manufacturers and retailers the opportunity to generate ongoing revenue streams from selling services to support connected products, rather than the products themselves. This is a fundamental shift in the vendor/buyer relationship. What was once a ‘one-off sale’ becomes a service-oriented relationship where the vendor can anticipate the customers’ needs in advance by working in real-time with product data. In 2014 we expect to see more manufacturers take a fresh look at how useful services can be incorporated into their products.”
IoT will break out of existing silos
“Today most connected products operate in siloes; they are unable to communicate with other devices, preventing us from unleasing the IoT’s full potential. The AllSeen Alliance announced in December 2013 is a great first step towards breaking out of these siloes and embracing a common protocol. Whether or not this initiative will be successful remains to be seen, but the need is clear. Just look at the Internet, there are almost infinite products and services competing, but they do so on a common technological playing field that ensures openness, innovation and new sources of revenue. The IoT is no different and we’ll start to see it play out in a big way in 2014.”