Monetizing the Internet of Things: Show me the...
Transcript of Monetizing the Internet of Things: Show me the...
Monetizing the Internet of Things: Show me the Money
Silicon Valley Innovation at its Best
Chris Kocher
Managing Director
Grey Heron
@xopher5
Chris Kocher kocher@ greyheron.com 415-378-8801
@ThingsExpo
Cloud and IoT Expo
November 3, 2015
Chris Kocher kocher@ greyheron.com 415-378-8801
The Internet of Things (IoT) is a Mashup of Old and New Technologies
Networks
Big Data
Solenoids
Chips
Sensors
Compute engines
Clouds
Smart Phones
Platforms
Appliances
Analytics
Storage
Communication
protocols
Security
Things
Chris Kocher kocher@ greyheron.com 415-378-8801
IoT: Spans the Practical to the Absurd
GE sensors on fan blades Jamy Internet Toaster
Chris Kocher kocher@ greyheron.com 415-378-8801
IoT Evolved as the Perfect Storm of Convergence between Moore’s and Metcalfe’s Law
Size,
Price
# of Devices and Time
Embedded sensors
and wearables
2010s –
2020s
Network
Speed,
Bandwidth
Minicomputers
1970s-1980s
Mainframes
1960s-1970s
PCs and Laptops
1980s – 1990s
Smart phones,
Tablets 2000s-2010s
Modems 1200, 2400
9600, 56K baud
Acoustic couplers
Internet
Chris Kocher kocher@ greyheron.com 415-378-8801
10 Key Areas Driving IoT Ecosystems
Smart Cars
Retail Stores
Quantified Self - eHealthcare
Connected Homes
Intelligent Transportation
Agriculture 2.0
Smart Cities and eGovernment
Smart Buildings:
Energy, Light, Security
Smart Factories Utilities and Energy Grids
Chris Kocher kocher@ greyheron.com 415-378-8801
Many Ways to Monetize the IoT – but no one ‘Right’ Answer
SW Perpetual License
Freemium models
Customization
Service pricing
Outcome- based pricing
SaaS/PaaS/IaaS
OEM pricing
License per person/per seat
HW/Device/Thing sale
Consulting fees
VAR/Reseller Channels
Ad-based models
Integration fees
Revenue sharing
Usage per hour, transaction, API call …
Chris Kocher kocher@ greyheron.com 415-378-8801
Monetize Across the IoT Ecosystem It all starts with the customer and works back through the value chain
Technologies
• Semiconductors
• Chip sets
• Computers
• Software
• Sensors
• Apps
• Networks
• Cloud Computing
• Big Data
• Predictive Analytics
• Machine Learning
• …
Platforms
• Internet
• IP addressing
• Cisco
• Microsoft
• Intel
• Qualcomm
• ARM
• Samsung
• Citrix/Octoblu
• Arduino
• Alljoin
• Raspberry Pi
• Sigfox
• Zigbee
• …
Organizations
Retail Stores
Factories
Farms
Transportation
Energy Utilities
Hospitals
Military
Industry Associations
NGOs
Governments
Universities
…
Things
• Appliances
• Homes
• Buildings
• Cars
• Phones
• Machinery
• Planes
• Computers
• Buses
• Fitness trackers
• Cameras
• …
People
• Health
• Convenience
• Travel
• Shopping
• Work
• Security
• Entertainment
• Cooking
• Sleep
• Exercise
• …
Business Models
Chris Kocher kocher@ greyheron.com 415-378-8801
Ecosystem Implications for Monetization
1. Understand the value you are creating for customers/users
2. Build to scale - this is a game of big numbers
3. Deepen and own the customer relationship
4. Collect data, own data, analyze data, monetize data
5. Integrate with ecosystems to reduce friction
6. Deliver distinctive meaningful value to customers
7. Align internal teams and partners to ensure delivery of a coherent,
unified IoT offering
Chris Kocher kocher@ greyheron.com 415-378-8801
Link Monetization to Customer Value
• Better satisfy customers needs
• Improve brand image/loyalty
• Sell more of existing products
• Sell new products/services
• Increase ‘stickiness’
• Reduce churn – Increase LTV
• Reach new markets
• Be more competitive
• Create new business models
• Incent referrals
• Price differently
• Increase margins
• Find new revenue streams
• Reduce costs
• Streamline operations
• Improve efficiency
• Better service levels for same cost
• Shorten cycle times
• Minimize downtime
• Improve safety
• Shorten supply chain
• Reduce inventory costs
• Eliminate wasted time, resources
• Reduce labor costs
• Remove ‘friction’
• Reengineer operations
• Reduce customer acquisition costs
(CAC)
Revenue enhancement Cost reduction
Chris Kocher kocher@ greyheron.com 415-378-8801
The 4 Vs Framework for Monetizing IoT
1. Vertical- Horizontal Integration
2.Value Creation
3.Value Migration
4. Value Delivery Systems
Chris Kocher kocher@ greyheron.com 415-378-8801
Vertical Integration: - leverage economies of scale and synergies
• Dell Servers + EMC Storage
focused on IT…
• …. Now vertically integrating
with the new Dell Edge Gateway
IoT device
Chris Kocher kocher@ greyheron.com 415-378-8801
Value Creation: - add new value to current offerings and tap new revenues
http://www.bloomberg.com/bw/articles/2014-10-02/intel-ceo-takes-chipmaker-beyond-pcs-into-new-products
Smart beer keg…
…Or… new beverage
distribution channel
Chris Kocher kocher@ greyheron.com 415-378-8801
Value Migration: - get into adjacent markets and entirely new businesses
Smart Thermostat …
…Or Trojan Horse to enter the
Energy business
Chris Kocher kocher@ greyheron.com 415-378-8801
Value Delivery Systems: -align your entire organization to deliver one value
• Super taxi service ……
• ….. Or, Integrated Distribution,
Delivery and Transportation
Marketplace
Chris Kocher kocher@ greyheron.com 415-378-8801
Some Final Advice as you Embark on your IoT Monetization Journey
1. Align with customer value
2. Consider how you can migrate value to other markets
3. Keep it simple
4. Take off your product blinders and focus on business model innovation
5. Don’t be a solution in search of a problem
6. Make sure your product/service is not someone else’s seeding strategy
7. Prepare to go ‘silo busting’
8. “Never mistake a clear vision for a short distance” - Paul Saffo
Chris Kocher kocher@ greyheron.com 415-378-8801
For Further Information on Grey Heron, IOT and Big Data
• Monetizing IoT: Show me the Money
• http://sandhill.com/article/monetizing-iot-show-me-the-money/
• The Internet of Things: Challenges and Opportunities
• http://sandhill.com/article/the-internet-of-things-challenges-and-
opportunities
• Is the Internet of Things the 5th Wave of Computing?
• https://www.linkedin.com/pulse/20141125084549-25688-is-the-internet-
of-things-the-fifth-wave-of-computing
• Avoiding Big Data Train Wrecks while Maximizing Business Value
• http://sandhill.com/article/avoiding-big-data-train-wrecks-while-
maximizing-business-value/
• Grey Heron, Website: www.greyheron.com
• Chris Kocher LinkedIn: https://www.linkedin.com/in/kocherchris
• Chris Kocher email: [email protected]
Chris Kocher kocher@ greyheron.com 415-378-8801
Helping Companies Monetize Products
Chris Kocher is a managing director of Grey Heron venture consulting.
He is a 30-year veteran of Silicon Valley and multiple innovation and
investment cycles. Chris brings a wealth of strategic and hands-on
operating experience to help CEOs, executives and investors build
revenues and shareholder value.
He has consulted with over 100 companies on innovating with new
business models, product strategies and monetization in disruptive
markets and established industries.
Chris can be reached at [email protected] if you’d like to discuss
how he can assist you in growing the value of your business.
Chris Kocher kocher@ greyheron.com 415-378-8801
What’s Old is New Again - The Art of Reinvention
1996