“If you think that the Internet has changed your life, think again. The Internet of Things is about to change it all over again.”- said Brendan O`Brien, Co-Founder at Aria Systems, a company that presented the world with data-based enterprise web applications and cloud billing, before even the concept of “cloud” was set.

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What is the IoT exactly?

To make this concept closer to you, we can say that it is a system of connected devices, objects, machines, or even people and animals with unique identification (UIDs) and the ability to transfer data over the network without human-to-computer or human-to-human interaction.

The thing can be anything: a human with a heart monitor implant, an animal with a biochip transponder, a car with sensors, or another man-made object with an IP address and the ability to transfer data over a network.

Devices or objects communicate with each other, although people can interact with them-for instance, to give them instructions, set them up, or access data.

The Impact of IoT on Businesses

While IoT helps people to live, study, and work smarter by offering smart devices and homes, it is essential for business. Why?

It provides organizations with real-time information about how their system work, from machines’ performance to supply chains and logistic operations.

By using IoT, companies are able to automate processes and reduce labor costs. It also improves service delivery and offers transparency in customer transactions.

So, we can say that the IoT gives multiple businesses many benefits, such as:

Improving the customer experience
Monitoring the overall business process
Time and money savings
Adapting the business model
Making better decisions

Generally, this data shows each company what their advantages and disadvantages are in the market and what needs to be improved. It encourages industries to rethink the ways they approach their businesses and gives them tools for advancement.

In order to take full advantage of data, businesses hire IoT software development companies. Those companies use IoT technology to create highly-complex interactions between hardware and software that provide users with the experience of connectivity across devices, while the devices themselves offer valuable enterprise data that can be used for strategy, marketing, and other use cases.

IoT in the Future Business Model

We can say that the IoT transformed various businesses from the inside out and established entirely new business models. How?

One way is by optimizing the use and management of physical resources, and another one is automation, as communication device-to-device may be capable of solving problems that previously required human-to-human cooperation.

IoT will definitely transform key industries such as supply chains, smart homes, cities, buildings, health care, and cybersecurity. Let’s learn about the top 3 most popular IoT business models that many companies have already adapted to, and in the future will be “must-haves” for businesses:

As-A-Service Model

Thanks to cloud computing, connectivity, and related technologies, a new business model called “as-a-service” is born.

It all started with the SaaS (software-as-a-service) model, but the IoT has taken it to the next level.

Low-cost, precise, and well-connected IoT sensors and monitoring devices for the products you sell enhance the service you can provide. Real-time and historical data combined that IoT devices generate, allows you, for instance, to do preventive maintenance.

A great example of this business model is Edison Electric Co. This electric equipment company, founded in 1890, totally transformed its business model with IoT. Now they building wireless sensors that manufacturing plants can install on their pipes and conveyors to monitor the pressure, vibration, temperature, and flow. These sensors, which the operator monitors remotely, improve productivity and prevent incidents.

A Circular Business Model

This model emphasizes refurbishment and maintenance of components in every aspect of sales, manufacturing, and utilization. The whole point is using rather than owning, creating instead of wasting, and recycling instead of discarding. Old, classical economics models were focused on the final value created at customer delivery, without de-emphasizing losses due to waste.

Adidas adopted this business model with FUTURECRAFT.LOOP model. This shoe is “made to be remade.” It was designed with recycling partners, so the shoe can be returned to Adidas and reused to create new running shoes.

A Customized Business Model

IoT helps companies produce on demand, reducing the need for stocked products. Before the product is even made, IoT gives businesses information about the preferences of the customer. For instance, smart jukeboxes can change the song or music genre based on the taste of everyone within earshot. Alternatively, IoT sensors in the city grid can change traffic patterns, parking layouts, and garbage collection schedules according to the behaviors of its citizens.

Summing Up

As you can see, the IoT is definitely the most promising technology for people and businesses, and it will become even more useful in the future. With other technologies combined, such as robotics, Ai, VR, and blockchain, companies will be able to unlock some of the until now unknown business possibilities, which will lead them to new business models, new competitive advantages, and higher service and product quality.