The irresistible force paradox asks, “What happens when an unstoppable force meets an immovable object?” I think it’s the opposite when it comes to the Internet of Things (IoT) and the already booming as-a-service economy: “What happens when an unstoppable force befriends an unstoppable object?”
Most of the discussion to date around the as-a-service economy has been focused on cloud services, SaaS, and the likes of Uber. At the heart of this economy are the fundamental premises that customers – either business or consumer – can “rent” rather than own the product or service, and can do so, on demand, when they need it, paying as they go.
Although wishing for the utopian as-a-service model may be a futile exercise, the IoT can initiate meaningful models for heavy investment industries and quite a few consumer-focused businesses, and as technologists we should continue to push the envelope.
Let’s step back and think about how the IoT can push the sharing economy to its potential. Can product manufacturers leverage IoT principles, and create a viable technical and commercial model where idle assets are not priced, or are priced at a lower rate, thus saving customers millions of dollars? This would, of course, require collaboration between customers and product manufacturers to enable insight into how, when, and how much a customer consumes the product. But consider the possibilities!
One example is the car-for-hire market. Could a customer’s wearable device communicate with a reserved car, notifying it of approximate wait time until it’s required, enabling the vehicle to be productively deployed somewhere else, in turn enabling the business to offer lower prices to the customer and reduce the driver’s idle time? I think the technology is there, and although the task is humongous and with uncertain returns, I am sure someone, (ZipCar?) will experiment with this model at scale in the near future.
Another example is the thousands of small healthcare labs that cannot afford to own a blood analyzer. Innovative manufacturers of these machines could leverage IoT principles to analyze the blood test patterns of individual labs, and offer them a subscription model by which they are charged per blood test executed, or offered a bundled price of $X per 100 blood tests (much like HP’s Instant Ink offering.)
The IoT has the potential to really bring upon us the power of a sharing economy. In the near-term, businesses face challenges in developing a viable commercial and support model. However, they must overcome this in order for society at-large to truly benefit from this once-in-a-lifetime opportunity. They must remember that most industry disruption these days comes from outside the industry. If they don’t cannibalize themselves, someone else will. Thus, as the traditional competitive strategy levers are fast losing relevance, the IoT most definitely should be an integral part of their strategy.
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