IoT Commercialization & Business Model Adoption Report 2024

Description

206-page report that analyzes how companies commercialize smart connected IoT products, including success characteristics and patterns, possible pitfalls, case studies, and more.

About the report

The “IoT Commercialization & Business Model Adoption Report 2024” is part of IoT Analytics' ongoing coverage of Industrial IoT and Industry 4.0. The information presented in this report is based on an extensive survey, conducted in Q3 2023, of 100 OEMs of smart, connected products. The purpose of the report is to inform other market participants, most notably other OEMs that start developing their own connected IoT product and their vendors, of the process for creating such products, as well as the benefits they provide. Survey participants were selected randomly, and their knowledge was verified independently. To ensure complete objectivity, IoT Analytics did not alter or supplement any survey results and did not accept participants that were suggested by third parties. The IoT Analytics team added a number of examples to make some of the survey results more "real" for the reader (e.g., pricing examples and examples of specific connected product features introduced by some OEMs).

This publication analyses the process of commercializing smart connected IoT products along 6 main sections:

1. Making the case for connected equipment

Revenue contribution
Key benefits of connected equipment
Key beneficiaries of connected equipment

2. Developing the IoT product

Finding the budget
Buy vs. build and top vendors used
Taking the IoT product to market
Developing basic features

3. Developing the business model

Positioning the IoT product in the market
Prioritizing the use cases and features
Determining the revenue streams
Innovating the business model
Deep dive: Equipment as a Service

4. Commercializing the IoT product

Monetizing the IoT product
Driving adoption of the IoT product

5. Learning from successful commercialization

6. Case studies highlighting successful projects and learnings

SAMPLE VIEW

Questions answered:

How much are connected products contributing to OEM revenue, and how is this expected to change in the future?
How are OEMs sourcing their tech stack?
Which vendors are being used most often for each part of the tech stack?
How valuable have the connected products been for the organization, and which company activities are they improving upon?
What is the necessary budget for a company to create smart, connected products from scratch?
How are OEMs innovating their business model?
What are the biggest factors for driving customer adoption of connected products, and what are the most important concerns/roadblocks?
How are OEMs monetizing their solutions?
What is the state of Equipment as a Service (EaaS) , including adoption, necessary actions to be successful when pivoting to the model, and common pitfalls to avoid?
Which business systems are integrated with the IoT product usage data?
What extra features are OEMs offering to their customers on top of their connected products?
What are the six main factors that differentiate companies with more successful IoT commercializations?
What are some connected product and EaaS case studies?

Companies mentioned:

A selection of companies mentioned in the report.

AWS
BMW Group
Cisco
DMG Mori
Hilti
IBM
John Deere

Liebherr
Microsoft
Oracle
Schindler
Trumpf
UNOX

1. Executive summary and survey highlights

Report scope and organization
Who participated in this research (selection)?
Survey audience overview
This report is an update of the "IoT Commercialization & Business Model Adoption Report 2020"
Executive Summary
Highlight: 6 key insights from the analysis performed in the report
Highlight: 5 characteristics of successful OEMs

2. Introduction

Starting point: OEMs can tap into nine potential sources of revenue
Search terms related to new OEM business models are slowly but steadily trending upwards
Conceptual approach-the more connected, the higher the value potential
IoT enables OEMs to develop new competitive advantages
Universal Robots-an OEM journey in six years
Connected products drive an OEM's services business
This report takes the reader through the journey of an OEM

3. Making the case for connected equipment

Contribution of connected products to OEM revenue (1/3)-overall/regions)
Contribution of connected products to OEM revenue (2/3)-industry
Contribution of connected products to OEM revenue (3/3)-size/customer type
Value of IoT products (1/5)-overall
Value of IoT products (2/5)-example: getting insights from customers
Value of IoT products (3/5)-by industry
Value of IoT products (4/5)-by region, company size, and customer type
Value of IoT products (5/5)-by department and seniority
How IoT products enhance a company's operations (1/7)-overview
How IoT products enhance a company's operations (2/7)-by segment
How IoT products enhance a company's operations (3/7): product design/engineering of the physical product
How IoT products enhance a company's operations (4/7): product design/engineering of software
How IoT products enhance a company's operations (5/7): field service operations and mfg. processes
How IoT products enhance a company's operations (6/7): after-sales services and customer support
How IoT products enhance a company's operations (7/7): sales/marketing processes to sell SW/services
Example: Three main benefits when OEMs connect their equipment
Integrating IoT product usage data into business systems (1/2)-overview
Integrating IoT product usage data into business systems (2/2)-example

4. Developing the IoT product

Budgeting for smart, connected products (1/3)-overall cost
Budgeting for smart, connected products (2/3)-by component
Budgeting for smart, connected products (3/3)-by component/segment
Budget distribution for the components of smart, connected products
Procurement sources for each technology stack layer
Top IoT vendors used by respondents (1/3)-overview
Top IoT vendors used by respondents (2/3)-by tech stack (1/2)
Top IoT vendors used by respondents (3/3)-by tech stack (2/2)
Open-source tools/vendors mentioned
Time to market (1/5)-overview
Time to market (2/5)-by industry and region
Time to market (3/5)-by launch year, business model, and company size
Time to market (4/5)-three-year comparison
Time to market (5/5)-our interpretation of the results
Developing basic features-overview
Providing self-service options
Offering a usage dashboard (1/2)
Over-the-air (OTA) updates (1/2)
Over-the-air (OTA) updates (2/2)-example

5. Developing the business model

New vs. existing product (1/2)-overview
New vs. existing product (2/2)-by industry and region
Value of connected product features (1/3)-overview
Value of connected product features (2/3)-detailed view
Value of connected product features (3/3)-by segment
Connected products in metalworking machines
Remote service / Remote control: Grupo Cimbali
Condition monitoring: Trumpf
Operational dashboard: König & Bauer
Operational dashboard: Liebherr (1/3): Overview
Operational dashboard: Liebherr (2/3): Machine info
Operational dashboard: Liebherr (3/3): Report info
Energy monitoring: Liebherr
Monitoring customer usage (1/2): overview
Monitoring customer usage (2/2): case in point
Revenue contribution of each product part (1/2)-through the years
Revenue contribution of each product part (2/2)-by segment
Business model innovations (1/3)-overview
Business model innovations (2/3)-detailed overview
Business model innovations (3/3)-industry view
Additional business model insights-overview
Offering and monetizing software add-ons-example: UNOX
Letting the customer lease the equipment-example: Tetra Pak
Offering specific performance guarantees-example: Johnson Controls
EaaS OEM adoption status (1/2)-overview
EaaS OEM adoption status (2/2)-by segment
Four prominent examples of companies that have introduced EaaS
Customer adoption of EaaS
Reasons why customers adopt EaaS
Reasons why customers are reluctant to adopt EaaS
Necessary actions to guarantee a successful pivot to EaaS
Additional respondent insights for a successful pivot to EaaS
Example: Having a clear value proposition
Common mistakes when transitioning to EaaS
Common mistakes when transitioning to EaaS-respondent insights

6. Commercializing the IoT product

Monetization and additional guarantees (1/2)-overview
Monetization and additional guarantees (2/2)-by segment
Monetization of different solution elements (1/3)-today
Monetization of different solution elements (2/3)-in two years
Monetization of different solution elements (3/3)-expected change
Overview-data ownership and privacy
Example-privacy and security laws affecting connected products
Factors that drive customer adoption (1/2)
Factors that drive customer adoption (2/2)
Customer adoption concerns/roadblocks (1/2)-overview
Customer adoption concerns/roadblocks (2/2)-changes since 2020

7. Learning from successful commercialization

Five characteristics of successful OEMs
Identifying a successful IoT commercialization
Successful OEMs focus on software add-ons with a freemium model
Successful OEMs help their customers optimize the workflow
Example: Trumpf workflow optimization
Successful OEMs prioritize understanding customer hurdles in service adoption
Successful OEMs integrate IoT data with CRM and ERP systems
Successful OEMs effectively utilize IoT data to boost sales and marketing

8. Case studies

Connected products case study 1: Hilti power tools
Connected products case study 2: John Deere
Connected products case study 3: Schindler elevators
Connected products case study 4: BMW cars
Connected products case study 5: UNOX ovens
Equipment-as-a-Service case study 1: Heller
Equipment-as-a-Service case study 2: Carrier
Equipment-as-a-Service case study 3: Mitsubishi