This document discusses opportunities for generating recurring revenue from IoT applications. It notes that usage will be the key driver for IoT monetization and that companies should think in terms of recurring revenue rather than one-time revenue. Owning the customer relationship is also important for success. The document provides examples of how to transition from a product-based to a service-oriented business model and leverage connectivity platforms to generate ongoing subscription revenue from IoT devices and applications. A case study of a company taking this approach with GPS tracking solutions is also presented.

1. How do you Cut away the IoT Hype
and Find the Revenue Opportunity?
Sam Colley, CEO Podsystem Inc.
#IoTDevCon
www.iot-devcon.com

2. “This is the
largest growth
in the history
of humans”
Janus Bryzek,
known as “the father of sensors”
_________________________________________________________________________
#IoTDevCon

3. The Internet of Things
(IoT) has been labelled as
"the next Industrial Revolution"
because it will change the way
people live, work, entertain,
and travel, as well as how
governments and businesses
interact with the world.”
Paul Daugherty, chief
technology officer at Accenture
_________________________________________________________________________
#IoTDevCon

4. _________________________________________________________________________
#IoTDevCon
Things connected:

5. _________________________________________________________________________
Revenue:
#IoTDevCon

6. _________________________________________________________________________
#IoTDevCon
Gartner Hype Cycle 2015

7. _________________________________________________________________________
• Usage will be the key driver for IoT monetization.
#IoTDevCon
• Don´t think “revenue”, think “recurring revenue”.
• Owning the customer is the key to success.
• Monetizing the IoT is about turning products into
services.

8. _________________________________________________________________________
Usage will be the key driver for IoT monetization
#IoTDevCon
Why did Google
buy Nest?
Why is Go Pro becoming
a media company?

9. Opportunities for generating recurring revenue exist with all types of
IoT applications.
_________________________________________________________________________
#IoTDevCon
Don´t think “revenue”, think “recurring revenue”
One-off Premium Service:
• Wearable market: e.g. Fitbit
Recurring Premium Service:
• Canary home Security device charges
a recurring Service fee.
“Freemium”:
• Very common in the mobile world, e.g. Skype
or FreedomPop.

10. _________________________________________________________________________
Creating a subscription service in a product based company is not easy.
#IoTDevCon
What changes need to be made to move from a product to a
service oriented company?
• It requires a complete change in business model.
• The billing structure and methodology is different.
• It affects company structure and resources.
• The solution must be future-proofed.
• Requires flexibility to respond to changing customer
demands.
Monetizing the IoT is about turning products into services

11. _________________________________________________________________________
• The essential elements of an IoT application are hardware, software,
connectivity.
- Hardware is a non-starter in terms of ongoing revenue.
- Applications can be developed around the device that can be
monetized.
#IoTDevCon
Owning the customer is the key to success:

12. _________________________________________________________________________
#IoTDevCon
- What about connectivity?
• Many consumer applications based on wi-fi, Bluetooth.
• Therefore the customer is owned by the fixed/cellular provider.
• What about B2B applications? E.g. manufacturing, agriculture, energy,
connected ca
• These have a built-in subscription service: cellular data.
• What if you could own the customer through the cellular data subscription?
Owning the customer is the key to success:

13. _________________________________________________________________________
What do you need to enable this process?
• White label connectivity platform: provides
connectivity, monitoring, billing, device management,
support, analytics.
• Partnership with a specialist IoT connectivity provider
gives you long term security.
• Opportunities to provide analytics and profit from
the usage of your application .
#IoTDevCon

14. _________________________________________________________________________
• Taking GPS tracking to a new level by integrating with
emerging technologies.
• Development of a new generation of devices and applications
designed to increase productivity and efficiency, minimise
accidents, improve safety.
• Change in business model from hardware + software player to
full recurring revenue solution.
• Value added services layered on top e.g. reports that add
value for the customer and financial value for the company.
• By incorporating more into the solution the long term value is
increased for both the company and the customer.
#IoTDevCon
Case study: Flex GPS

15. _________________________________________________________________________
Sam Colley
CEO Podsystem Group
• Skype: sam.colley1
• Cell: +1 415 728 5899
• Direct USA: +1 415 707 0500
• sam.colley@podsystem.com
• www.podsystemm2m.com
#IoTDevCon