The internet spawned a series of new business models while also changing the way existing ones conduct their operation. Google and Facebook earn billions of dollars in ads, Amazon and Alibaba owe their success to offering a nearly unlimited array of products without overspending on shelf space, Skype and LinkedIn allure customers with attractive premium plans. Digitalization radically changed the world, so the physical and the digital world are in a sort of barrier. The Internet of Things wants to change, as the physical world of atoms and the digital world of bits will mix. So, in the future, things like houses, supermarkets, shoes, cars, and airplanes will be connected to each other. As consumer trends vary over time, how does the Internet of Things affect business models, and how can these companies accommodate this emerging technology to better suit their customers?
Suppliers nowadays combine physical objects with IT components like sensors, cloud-based data analysis, and internet connections. Customers benefit from the physical object’s original function and also from a group of digital services. The applications are endless, from smart pill bottles that remind elderly people when to take their medications, to boxes being moved in warehouses by robotic arms into conveyor belts as part of some shipping distribution chain.
Because objects with IoT capacity provide added digital services, they can be used anywhere and can be realized at a very low marginal cost. IoT adds to the value of objects by expanding the customer portfolio of physical things thanks to the generated user data, which enables developers and manufacturers to run their networks more efficiently.
For years, giants like Facebook and Google have profited from the fact that the internet allows for exact measurement and equally exact measurement activities and the Internet of Things allows us to transfer this management mentality to the physical world, allowing for inventory updates within minutes and cars will be able to measure and communicate road conditions in real-time.
The Internet of Things affects companies and entrepreneurs in six key ways.
- Producers of physical goods must develop towards service providers with all the challenges connected to that new role.
- Industry and internet cultures collide and manufacturers are a bridge to communicate both worlds.
- Companies work together more than ever, the strategic value of developer communities and business ecosystems is enormous.
- The development of business and service models won’t happen on a drawing board. Creative trends show that experimentation in short and iterative cycles is necessary.
- It is crucial to focus on straightforward solutions and first and constructing security systems as easy to install as a light bulb requires strong foundations that make up a platform
- IoT deals with sensitive user data. So, security in a world where manufacturers get routinely questioned on safety is a cardinal issue.
The bulk of the things that IFA Berlin will showcase for home electronics will include IoT capacity, setting up new trends that we will enjoy for many years.