Monetizing the IoT Revolution

Herman Donner and Michael Steep
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Herman Donner: Global Projects Center, School of Engineering, Stanford University, 473 Via Ortega, Stanford, CA 94305, USA
Michael Steep: Global Projects Center, School of Engineering, Stanford University, 473 Via Ortega, Stanford, CA 94305, USA

Sustainability, 2021, vol. 13, issue 4, 1-15

Abstract: Academics and businesses alike tend to fail at understanding how the IoT revolution is monetized. We outline three main categories of how IoT will impact business models: (a) improved customer matching and tracking of marketing returns, (b) individualized offers and pricing when consumer demand and price elasticities can be identified, and (c) smart device and usage monitoring that allows for outcome-based contracts and servitization. Data convergence creates context-based-intelligence, which enables a shift from using consumer profiles for targeted advertising to individualized offers and pricing. The required depth of both consumer data and understanding of context will require collaborative efforts between companies and blur the lines between industrial- and consumer-IoT applications. Outlining concerns for privacy and cybersecurity, we find that consumer demand for decision-simplicity and relevant content aligns with the business model of “free” services in return for data, despite consumer concerns relating to data collection.

Keywords: Internet of Things; business models; smart cities; big data; consumer data (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
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