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Organizations can create greater value in IoT products by combining innovative design, proper maintenance and improved operations beyond just connecting a device to the internet.
Organizations must avoid being lured by the hype of IoT products and plan to create real business value from IoT.
Profitability from IoT products is the biggest IoT challenge facing organizations today. Value for any business is created by ensuring the price earned from a product is greater than its cost, but smart devices could fall victim to the 10-times curse if organizations don't carefully consider how their product adds IoT value.
The 10-times curse refers to how connecting anything to the internet seems to bump the price up to 10 times the traditional product price in consumer IoT but doesn't mean that the connected device adds any IoT value. For example, a typical thermostat could cost $17, but a smart thermostat would cost $170. To make a profit, organizations must be able to justify whether a smart version of any device is worth 10 times the traditional product.
In this excerpt from the IoT-Inc. Certified IoT Professional (ICIP) training program, instructor Bruce Sinclair discusses why products that can be connected shouldn't always be connected. Consumers might not be willing to pay 10 times the cost when the traditional version of a thermostat or any device still gets the job done.
Organizations have four options in the IoT value creation framework to add value with IoT:
- Organizations can improve products in addition to making them smart devices.
- Improve operational efficiency. Organizations can make the user experience better.
- Maintain products. Organizations can use predictive maintenance for connected devices and update the product with improved software.
- IoT opens the opportunity to create new products, not just connect traditional products to the internet.
Consumer, commercial or industrial IoT organizations must consider how to add value during every step of the IoT development process to avoid getting caught up in the hype of smart devices.
The ICIP IoT training program aims to help professionals solve the most pressing challenge of IoT: creating a positive ROI and profitable business. Learn more about the ICIP IoT training program.