The Internet of “Things” is a rapidly developing trend born out of the 4th industrial revolution. Cloud services create a bridge between people and machines, through the collection of enormous amounts of data from “things,” aka devices, by way of the cloud. As companies enter the connected era, where every “thing” connects to any “thing,” it is important to consider the impacts on our economy.
Revolutions in technology go hand in hand with economic changes. In the last decade, the advent of connectivity to the cloud resulted in a new business model known as Platform as a Service, PaaS. Companies were able to offer cloud-based services including hosted solutions like AWS, Netronix, Azure, and others.
Similarly, the IoT introduces a new business model called, Things as a Service, TaaS. Before IoT, the intricate design of stand-alone systems yielded high production costs based on costs per unit. Moreover, conventional business models limited the source of revenue to the sale of a single product, a piece of hardware, on a per unit basis.
TaaS creates additional sources of revenue and reductions in production cost and cost of ownership. In the IoT world, all devices are by definition connected to the cloud. The connection to the cloud enables the development of hybrid solutions where part of the system functionality is local and other parts of processing are done on the cloud.
Unlike stand-alone systems, hybrid solutions allow for the design and development of low-cost devices, while also introducing multiple streams of revenue from the sale of the “thing” and the sale of the “service.” The service can be the transmission of data from the device to the cloud, access to data from the cloud, and data analytics.
In this connected era, TaaS impacts our economy by reducing the initial costs of a solution, creating recurring revenues, and increasing the market share. Companies that adapt to these technological advancements are in a better position to grow, profit, and stay in business. The result is a win-win position for both the buyer and the seller.
Vasileios Nasis, President and CEO of Netronix Group, Inc.