Blog Entry

May 17

Value Creation & IoT Monetization (Part 3)

In Part 1 and Part 2 of this series, I looked at some of the key drivers of the IoT, its 10 main areas, the importance of ecosystems, and the 4 Values Framework. This framework is an effective way for large, established companies and emerging startups to evaluate how they can best monetize their IoT opportunities. I have already covered two of the framework’s four components: vertical integration and value creation, and in this article, I will talk about the remaining two: value migration and value delivery systems.

Value migration

This approach to IoT monetization is about moving into adjacent markets. It can be a high-risk proposition that requires relatively low investment and the payout is potentially huge. Value migration is usually limited to companies that are well established in one area, with a core competency, technology, or IP that can be used in an adjacent market or industry.

Value delivery systems 

The final component in the framework is all about ecosystems and partnering. Companies need to provide complete, value-added solutions that customers can enjoy without having to understand technical details, integrate disparate systems, or suffer business complexity. Success in the IoT, as in many other areas, is dependent on a strong value delivery system where all the functions within an organization and its partners’ value chain are closely aligned on customer value delivery. Having such a system in place can help prevent the disconnects that result from internal silos of responsibility. Read more