How the IoT is changing and creating business models

Al Sisto

Blog by: Al Sisto - 4 / Jan / 2019

The IoT’s transformative potential within organisations has been well-document. But it is also useful to take a step back and consider how the IoT is not just enabling individual processes to be enhanced, but genuinely shifting how organisations are structured and business models roll out.

Here are some of the major changes.


The ‘as-a-service’ model has been familiar to anyone who works in enterprise IT for any years now. Enabled by the rise in cloud computing, it enables application to be consumed in a far more flexible, scalable and stretchy way than ever before.

The IoT is enabling a similar evolution, pioneered by Rolls-Royce via its TotalCare programme. Because connected sensors can collect and harness data from every stage in a product’s life – from its initial journey down the production line to how it performs in situ, after being purchased – manufacturers are able to harness a vast volume of data in an ongoing way. As a result, manufacturers are able to genuinely optimise their products, in situ, on an ongoing basis – as well as capturing field-based information for feeding into the next generation of product development.

Essentially, the design and development phase of a business model can be extended out to gather insights from products after they have been purchased.


Any organisation deploying IoT technology typically needs to engage with multiple stakeholders. One provider might supplier the hardware – the connected devices or sensors that are positioned throughout the organisation. Another provider might handle security and verification, ensuring that every device now added to the organisation’s network is identified, validated and protected. Another provider might deal with the analytics platform which collects information from those sensors and turns it into business insights.

There are infinite variations. An IoT deployment in a manufacturing setting looks different to one in a retail, customer-facing setting, and different again to one in an aviation or utilities setting, and so on. However, the structure – one involving multiple different suppliers and specialists – remains the same. In other words, corporate IoT deployments require providers to work closely together, sharing information and objectives. The IoT is ushering in an era of more collaborative and multi-faceted business models.


The IoT enables dramatic levels of customisation, across multiple sectors. In customer-faceting settings such as retail or hospitality, IoT technology can be harnessed to present personalised experiences to consumers on their smartphones, such as tailored loyalty programmes, suggestions for up-selling and advice on promotions. Smart screens are powering personalised advertising billboards and smart mirrors in retailers. At home, consumers can use their smartphones to take measurements of their homes or bodies, send that data to manufacturers and purchase bespoke tailored clothes or made-to-measure interior design products.


Machine learning and artificial intelligence (AI) are not IoT technologies in themselves, but when they are combined with the data collected by the IoT, they enable powerful transformations in how businesses operate. They shift organisations to a dynamic, continuous improvement model, whereby information on how products or equipment are performing is continually fed back into business processes, with adjustments being made to improve efficiency and performance.

Ultimately, dynamism is at the core of all IoT-enabled business transformation. By enabling more – and more rapid – data collection and analysis, and enabling organisations to harness intelligence that previously went untapped, on an ongoing basis, the IoT is powering more dynamic approaches to business than ever before.


Topics: IoT, IIoT, digital transformation, business models

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