One of the memes that has been going around the industry this year, particularly amongst platform suppliers, is that the slow growth of IoT deployments is due to the fact that “Consumers don’t yet understand the real value of IoT”. It’s an incredibly arrogant statement, which tells us a lot about the current start-up mentality, where too many have the perception that they’re entitled to become a billion-dollar company just because they’ve had the presence of mind to jump on the IoT bandwagon. However, the fundamental fact remains that if you are going to succeed, you need a business model. Unfortunately, profitable business models in the IoT are rather thin on the ground, largely because many of the self-styled IoT experts don’t really understand the market.
What most people do agree on is that the IoT isn’t taking off at the rate which everyone had expected, although that’s no great surprise – technology growth curves almost never match the hockey stick curve that analysts predict. Gartner’s famous Hype Curve constantly reminds us that the path to ubiquity is strewn with failed ideas, many of which never emerge from the trough of disillusionment. The IoT suffers from a further problem, which is that the catch-all name has become to mean all things to all men (or maybe all machines). Many forget that the popular IoT poster children which the press pick up and promote as IoT are generally more fluff than substance.
Which brings us back to business models. The IoT will take off when companies work out how to make money out of it. Sadly, that’s proving harder than it may seem, with the more cynical concluding that the only people to profit from the IoT so far are conference organisers. So, let’s take a look at why developing a profitable business model is proving to be so challenging.