Wikipedia says: The Internet of Things (IoT) is used as a collective term for technologies belonging to a global infrastructure of information societies, which makes it possible to connect physical and virtual objects with each other and to let them cooperate through communication and information technologies.
https://en.wikipedia.org/wiki/Internet_of_Things
What is the internet of things?
The Internet of Things, IoT for short, refers to the billions of physical devices worldwide
connected to the Internet, collecting and sharing data. Thanks to inexpensive processors and modern wireless networks, it is now possible
to transform really everything - from sensors to smartphones, from self-driving cars to airplanes, etc. - into a part of IoT. This gives
devices which would otherwise be virtually "stupid" a digital intelligence: real-time data can be transmitted without human involvement,
which in turn effectively connects the physical world with the digital world.
By combining digitally connected devices with automated systems, it is possible to "collect information, analyze it and create an action"
to learn from a process or to assist someone in a specific task.
This enables devices to communicate not only on a small and limited scale, but across different types of networks, creating a much more interconnected world.
Is there any example for such a device in the Internet of Things?
Almost any physical object can theoretically be converted
into an IoT device if it is connected to the Internet and can therefore be individually controlled.
An example: A light bulb which can be switched on and off via a smartphone app is already an IoT device, as well as an intelligent thermostat in the home, a motion sensor or a connected street lamp. What we are trying to say: An IoT device can be as fun-light as a child's toy, or as serious as a driverless truck, or as complicated as a jet engine with hundreds or thousands of sensors collecting and sending back data, also to ensure that it works efficiently. The next stage of development are SmartCity projects which fill entire regions with sensors to enable people to better control, understand and intelligently manage the environment.
But why should connected devices share data?
"IoT allows us to work more efficiently while
saving time, money and often emissions".
saving time, money and often emissions".
The objective is not to randomly link every Internet-enabled device in a smart way, but to collect data which could actually be
useful for customers and consumers with positive effects on the overall economy.
In industrial applications, sensors in product lines are able to increase efficiency and reduce waste. According to a study, more
than a third of US manufacturers already use data from intelligent sensors in their configurations. The US company Concrete Sensors has
developed a device that, when used in concrete, provides data on material condition, for example.
This allows not only companies, but also governments, public institutions and authorities to rethink how they provide their services
(better, more effective, situation-specific, customer-oriented, etc.) as well as how they produce goods.
"The quality and volume of data in the Internet of Things makes it possible to make interaction
with devices much more responsive and contextual, allowing the possibility for change".
What are the advantages of the Internet of Things for my business?
These depend on the implementation. However, it is crucial for the success of a business that companies have more access to data
and their own products, but also that they have their own internal systems and can make more changes (themselves).
In order to be able to send back data on performance, manufacturers add intelligent sensors to the components of their products. In
this way, business owners can predict when a component is most likely to fail and can replace it before it is actually damaged.
Companies can also use the data generated by these sensors to make their systems and supply chains more efficient, because they get
much more accurate data about what is actually happening.
"Production systems can become much more responsive with the introduction of comprehensive
real-time data collection and analysis"
The use of the Internet of things within the company can be divided into two areas: Real-time location devices for the health care
sector or industry-specific offerings, such as sensors in a power plant; but also IoT devices that can be used in all industries are
included.
manufacturing, transportation and utilities. Manufacturers are focusing primarily on improving process efficiency and asset tracking, while around two-thirds of IoT investments have been made in transportation, cargo monitoring and fleet management. In the utility industry, IoT costs mainly involve smart networks for gas, water and electricity. However, connected vehicles and intelligent buildings also play an important role in cross-industry IoT areas.
What does the industrial Internet of Things include?
What does the industrial Internet of Things include?
The Industrial Internet of Things (IIoT for short) or the fourth industrial revolution or Industry 4.0 are all terms describing the use of IoT technology in companies. The concept here corresponds to that of consumer IoT. A combination of wireless networks, sensors, big data and analysis are used to measure and optimise industrial processes.
The Industrial Internet of Things (IIoT for short) or the fourth industrial revolution or Industry 4.0 are all terms describing the use of IoT technology in companies. The concept here corresponds to that of consumer IoT. A combination of wireless networks, sensors, big data and analysis are used to measure and optimise industrial processes.
In case the implementation is carried out for the entire supply chain and not only for individual companies, the consequences can
be even more comprehensive due to the timely delivery of materials and the management of production from A to Z. Two possible
objectives are increasing labour productivity, but also reducing costs. However, IIoT can also create new sources of income for
entrepreneurs. For example, manufacturers can sell predictive maintenance of an engine rather than just a stand-alone product like the
engine alone.
What are the benefits of the Internet of Things for consumers?
The promise of IoT is to make our environment - such as vehicles, houses, offices, etc. - easier to measure and more intelligent and
conversational. First and foremost, intelligent speakers such as Google Home or Amazon Echo, which have revolutionized the way we play
music, set timers or retrieve information. But home security systems are also playing an increasingly important role, making it easier
to monitor what's going on outside or inside, to watch visitors and talk to them. Meanwhile, intelligent thermostats can help warm your
home before you return home, or smart light bulbs can make it seem like you're at home, even if you're just enjoying your holiday by the
sea.
Sensors help us to better understand how loud or polluted our environment can be. Smart cities and autonomous ones are able to change
the way we build and manage our public spaces.
So is the Internet of Things some kind of cloud application?
Instead of building large internal capacities, many companies choose to process data in the cloud, because IoT applications generate a huge amount of data.These companies are particularly interesting for the cloud computing giants: Google Cloud, Amazon Web Services with its IoT services or even Azure IoT Suite are at the forefront of this.
The AI uses data from countless IoT sensors, which are fed into deep neural networks and predict how different decisions
could affect future energy consumption. By using artificial intelligence and machine learning, Microsoft's Azure IoT Edge service has
enabled it to make its data centers more efficient. The same technology could then also be used in other industrial environments.
Instead of building large internal capacities, many companies choose to process data in the cloud, because IoT applications generate a huge amount of data.These companies are particularly interesting for the cloud computing giants: Google Cloud, Amazon Web Services with its IoT services or even Azure IoT Suite are at the forefront of this.
Smartstore offers the cloud solutions of the IoT market leader, not least because of its proximity to Microsoft. Azure IoT offers all
the devices, tools, security features, data analysis and security functions you need to achieve your IoT goals. Azure IoT is built on
Microsoft's decades of experience with enterprises.
Is it right to say that you could combine IoT data and artificial intelligence?
IoT devices produce large amounts of data. This could be measurements from an intelligent device, or information about the engine
temperature, perhaps even whether a door is open or closed. All such IoT data must be collected and then stored and analyzed. One way
in which companies can get the most out of the data obtained is by feeding in artificial intelligence (AI) systems, which can make
concrete predictions based on the data.
With Smartstore Enterprise Commerce Open Source and the Microsoft Azure IoT Edge service, you are able to implement all these
services - Artificial Intelligence, Internet of Things and Mixed Reality - easily and securely.
How can I use Smartstore in conjunction with IoT or monetize it?
The first step to monetizing the Internet of Things is to be aware of where the money comes from. Consumers, governments and
businesses are the most important players in IoT! But how does monetization between companies actually work?
Manufacturing companies have traditionally generated most of their income from physical products sold for one-off payments. These
payments are mainly offset by manufacturing costs, which are also incurred on a one-off basis. In addition, services were offered and
usually charged independently. In IoT, revenue and cost flows now change fundamentally. At the same time, companies represent the
largest environment that can benefit from IoT monetization. More than a third of companies already use intelligent sensors. This
percentage will increase significantly in the coming years. Further estimates for the current year 2020 assume well over 300 million IoT
devices used by food companies. About 75 million devices in agriculture, almost 6 million conveyor systems, and not to forget the
approximately 1 billion intelligent electricity meters being installed on behalf of energy supply companies.
There are four models of how a company can make money from "Internet of Things" solutions. They focus on hardware, data, services
and then building ecosystems. Let's find out what their respective advantages are.
#1 Hardware: You can add features to your product as hardware premium to monetize it as the "Internet of Things". This version
adds the option to link a new or existing product and provide a mobile app for remote management. By providing advanced features, IoT
companies can sell the product at a premium price, multiplying their revenue. The novelty aspect is decisive here, which makes the
product more attractive, more helpful or simply more interesting for the customers.
Here's how it works: simply put, this means generating higher revenues by selling a related product. Let us illustrate this method
with the example of the US company and its hardware premium model "Sleep Number IT Bed" from "Select Comfort". Here, the mattress
contains special sensors collecting different types of biometric data. Information about the user's movements, heart rate, sleep status
and breathing are also collected and even make it possible to display this data in the associated mobile app "SleepIQ". It is even
possible to adjust the desired firmness of the mattress and thus find out more about sleep behavior and quality.
The "Sleep Number IT Bed" interacts with cloud services and other connected devices. It then compares personal sleep data with data
from the fitness tracker as well as temperature sensors and displays information to improve sleep. The price for this is about $800
upwards, which is about four times higher than a conventional mattress of the same size. Still, people are willing to pay for the
connected object and its special features.
This type of monetization can be easily achieved with Smartstore Enterprise Commerce Open Source and the Microsoft Azure IoT Edge
service. In the Microsoft cloud, the services are combined and then charged to the consumer via Smartstore.
#2 Service Subscription: Another well working way for IoT monetization is to offer lucrative services and sell them to
customers for a regular fee. It leads to a regular revenue stream and supports a strong and lasting customer relationship. Existing
users can be offered additional features or service plans to further enhance the functionality of the devices.
Here's how it works: Volkswagen offers its customers the "Car-Net" service, for example, with navigation, entertainment, maintenance
and safety functions which can be controlled via smartphone. The so-called Guide & Inform Service gives important or helpful advice
while driving. This mobile online service allows you to access parking information, weather information, charging stations, online
traffic information, fuel information and many other useful data.
The service and security package includes an online theft alarm, emergency call service and maintenance planning. It also sends
automatic notifications to selected contacts in case the vehicle's airbags have deployed. The monthly fee is around 18 USD and the
annual subscription is around 200 USD.
This service can be realized in combination with Smartstore Enterprise Commerce Open Source and Microsoft Connected Vehicle Platform
(MCVP), billing of users can be done via Smartstore.
#3 Data turnover: Another advantage of IoT devices is the ability to collect and also store large amounts of data of any kind.
The data revolution resulting from the development of the Internet of Things (IoT) is not limited to increasing business efficiency or
optimizing service. It creates data flows which can be a good and above all regular source of income not only for companies but also for
third parties.
Some companies are already willing to acquire data that can help them increase their marketing effectiveness and better understand
their customers. Therefore, the option of collecting, processing, and selling data is a viable monetization model for many companies. Once
the desired information has been collected and anonymized, companies have the option of offering it packaged or raw, or selling it through
advertising.
And this is how the model works: this time the appropriate example is Michelin Solutions. It collects data based on sensors installed
in the tires they sell. In the production of related goods, the company collects extremely accurate data on the use of its products. This
allows the company to improve its production and also its service.
But not only one company is able to use such data. Anonymized and continued, it can be used by many other companies who are willing to
pay for such information. Customers use such anonymous data for many different purposes, e.g. to reduce CO2 emissions or energy costs.
Monetization of the Internet of Things by selling data is usually used in addition to other ways of making money.
And in this case, the same applies again, this data can be sold to a prospective customer without a sales organization, especially in
the B2B sector with the Smartstore Enterprise Commerce Open Source. After the agreed amount has been received, the data is released.
#4 Ecosystem structure/marketplace model: The concept of the Internet of Things is evolving throughout the ecosystem of
networked products. The resulting value increases as the ecosystem expands. The focus is not on a product or service, but on a platform
shared by hardware and software manufacturers, service providers, and other IoT companies (the so-called vendors). In this model, the
operator of the platform benefits on the one hand from the users of the platform and on the other hand from the end customer. The operator
receives a share of the profit from the product sold on the platform in addition to the platform users' regular fee. Such a platform has
many advantages for all participants. For example, companies can use the APIs proposed by the platform founder to develop their IoT
applications.
Here's how it works: A fitting example of a company is SmartThings, which uses the ecosystem-building model to monetize the Internet of
Things. As an IoT start-up, it offers a wide range of IoT products and a central hub, both internal and third-party. These include
switches, locks, alarms, environmental sensors, etc.
SmartThings offers a mobile app to control the hub and connected devices. It also supports developers in developing IoT solutions for
the platform and provides detailed instructions. SmartThings' partners are Philips, Belkin and Sonos. The hub costs around $100 and works
on Android and iOS. In 2014, Samsung Electronics bought SmartThings for around 200 million US dollars.
Setting up such a platform with the Smartstore Enterprise Commerce Open Source Edition is no problem at all, as all the necessary
features are integrated into it.
IoT price models: In addition to the IoT monetization models, there are several pricing models for services and products. These are
the models which are used most frequently:
- One-Time-Charges: The customer pays once when buying the service or product. The One-Time-Charges model is relatively widespread, such as with manufacturers of fitness trackers who sell connected equipment for a one-time fee.
- Pay-per-Outcome: The customer only has to pay for the results achieved by the IoT product. A model based on measurable values, where the user can immediately see its effectiveness. The IoT-StartUp Enlighted has adopted this model. It produces devices detecting movement, heat and light, and links them to a software system which accordingly controls lighting, cooling and heating based on the data collected by these sensors. Users do not pay in advance with this version, but only a percentage of the amount they have saved due to this product.
- Freemium: This model allows users to try a free product version and then decide whether they want or need an extended version. This is a very popular model which has been adopted by many IoT companies, including Octoblu. This platform offers free basic options for managing and connecting IoT devices, while advanced features are unlocked with a usage-based subscription.
- as-a-Service (subscription): This model allows users to customize their options and also the desired service duration. For example, XFINITY Home offers a monthly subscription for remote control of energy and security at home.
- Pay-per-Use (PPU): The customer only pays if he actually uses the service. The Metromile Pay-per-Mile insurance company charges its customers according to this model. The Metromile Pulse device measures the distance traveled and then transmits this information to the server. The movement app provides data which can be useful for the driver, such as information about the vehicles condition.
Which Smartstore Edition should I buy to develop such monetization models regarding IoT?
Since this form of data processing is
mainly relevant in an industrial environment, we offer Smartstore IoT only as of Smartstore Enterprise Commerce Open Source.
To find out why this edition in particular is the right one, please read our blog article https://smartstore.com/en/smartstore-enterprise-commerce-open-source-open-source-software-for-the-success-of-your-business
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