monetizing the internet of things: creating a connected customer experience
TRANSCRIPT
Monetizing The Internet of Things: Creating a Connected Customer Experience
Rich Becker, Industry Solutions
Today’s Presenters
Rich Becker IoT Solutions and Strategy Leader
Chris Kuntz VP, EcoSystem Programs
ThingWorx is the 1st Applica4on Pla6orm for the Connected World™ – one that combines the key func4onality of Web 2.0, social media and Connected
Intelligence™, and applies it to any process that involve things.
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Rela4onship Business Management
Agenda 1. Introductions 2. The “Shift” to Subscriptions
3. IoT – Market Trends & Impact on Product Companies 4. IoT – Harnessing the Shift
5. Subscriptions & Connected Products Monetization Strategies
6. Q&A
We build modern, flexible and easy to use enterprise software (RBM) that enables
companies to manage all aspects of their relationship with their subscribers
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Rela4onship Business Management
6.8 Billion potential subscribers on mobile, social and web.
71% of consumer spend will be on access, not ownership.
By 2018,
- 2014 McKinsey Global Media Report
The world has shifted to the Subscription Economy
Customers today have new expectations
Personal Real-Time Immediate fulfillment
On Going Value
Memorable Services
consumer goods
communication
healthcare Internet Of Things
technology
education music entertainment
Every industry is
shifting
Winners are delivering the Subscription Experience
Personal Real-Time Immediate fulfillment
On Going Value
Memorable Services
Relationships start with with the “Subscriber Identity”
Name Email Twitter
TRADITIONAL RECORD
SUBSCRIBER IDENTITY RECORD
Phone Company Facebook
Purchases Products Local Pricing Promotions Adjustments
*Usage metrics (outcome based billing) *Add-Ons, Associated Products or Provisioned Assets *Service Requests, Inquiries, Exchanges *Service Programs *Consumables, Training, & Programs
Payment history Refund history Lifetime Value Renewal Value Aging balance
The Subscription Experience Requires Relationship Business Management
Commerce Billing Finance
RBM
Transformational across a business
5 Clicks 4 Hours 3 Days < 180 Days
Change Pricing Send 3M Bills Shorten Close Launch New Product
Pricing flexibility Operational Scale Revenue Automation Technical Agility
CMO COO CFO CIO
Payment Gateways
Taxation
Mediation
Provisioning
Relationship Business Management (RBM) Ecosystem
BILLING FINANCE
Recurring & Usage Rating Taxation
Intuitive, Accurate Invoices Global Payment Collections
Revenue Recognition Accounting Close
GL Integration Reporting
COMMERCE
Product Catalog Quotes and Guided Selling
Commerce APIs and Checkout Pages Subscriber Lifecycle Management
PTC IoT is
Transforming Every Industry
consumer goods
communication
healthcare transportation technology
public safety wearables entertainment
IoT is transforming
every industry
New Capabilities of Smart, Connected Product
New Capabilities of Smart, Connected Products
VALUE REDEFINED
HARDWARE
SOFTWARE
EMBEDDED
CLOUD
PRODUCT
SERVICE
Improve Customer
Experience
Leverage data from connected
products for improved service,
support and usability
Optimize Business
Processes
Combine real-time data with
existing systems to increase efficiency
Differentiate Offering
Increase pace of product and
service innovation
New Revenue Streams
Unlock new business models and realize new
value-add opportunities
$ Value is Created with New Capabilities
© 2014 ThingWorx
Communications Elements
Internet Mobile Networks
Device Clouds
Wireless Provisioning
The Network
Connect
Application Enablement
BUSINESS LOGIC 3D STORAGE
ENGINE
REST APIs
SERVICE INTEGRATION
COMMUNICATIONS
MASHUP BUILDER SQUEAL 3RD PARTY TOOLS
Sensors, Devices & Smart Products Enable
Apply
Applications
Cloud Services Business Systems
Value IoT Solution Framework
© 2014 ThingWorx
Communications Elements
Internet Mobile Networks
Device Clouds
Wireless Provisioning
The Network
Connect
Application Enablement
Subscriptions Selling a Service Usage-based Billing Service Contracts
Cloud Services Business Systems
BUSINESS LOGIC 3D STORAGE
ENGINE
REST APIs
SERVICE INTEGRATION
COMMUNICATIONS
MASHUP BUILDER SQUEAL 3RD PARTY TOOLS
Sensors, Devices & Smart Products Enable
Apply
Monetize
Zuora: Subscription Billing Platform
IoT App Store
• Accelerates platform
adoption through global sharing of IP
• Improve IoT solution time-
to-market through application “assembly”
• Creating additional
revenue streams for Apps, Extensions, etc.
NEW CAPABILITIES OF SMART CONNECTED PRODUCTS The way products create value is changing
VALUE REDEFINED Improved customer experience and differentiated offerings
IoT SOLUTION FRAMEWORK CAPTURES VALUE Technology platform purpose-built for IoT with App Dev and Marketplace tools to drive value
Creating Value from the Internet of Things
PTC: Smart
Connected Products
IoT Infrastructure, Solution, Case
Studies
Joy Mining is a worldwide leader in high-productivity mining solutions that manufactures and markets original equipment and aftermarket parts and services for the mining industries.
Deployment results:
• Anticipate equipment failures & efficiently respond to problems reducing equipment downtime
• Optimize mining processes with new analytics to reduce the cost of resources & increase production
• Manage the overall mining operation on behalf of the mine owner. Transition from pay per product to pay per tonnage of earth mined
“The future gains in productivity will come from system improvements, not just the product itself. This requires smart connected product systems that can monitor and optimize the full system performance.”
– Ted Doheny CEO, Joy Global
Innovation: Joy Global Transforms Business Model
All Traffic Solutions is the leading manufacturer of signs used by police departments and local governments to help understand and manage traffic.
Results:
• Delivered an innovative solution for law enforcement professionals called the TraffiCloud
• Faster time to market • Rapid development of mobile UI • Advanced data mining that All Traffic can now
offer its customers
“ThingWorx’s rapid application development environment and scalable platform allows us to extend our solution and deliver new services to our customers in ways that were previously impossible.”
– Scott Johnson CEO, All Traffic Solutions
Innovation: All Traffic Captures New Revenue Streams
Usage-‐based Billing
Usage-‐based Billing
Monetization Strategies
Subscription-Based Strategies & Case Studies
The Internet of Things
Connected Home
Connected Consumer Devices
Connected Car
Enterprise / Industrial Devices
• Smart Energy, Utilities
• Security, Surveillance
• Automation & Control
• Appliances • Routers, Gateways
• Telematics, Emergency
• Fleet Management
• Insurance, Tracking
• Infotainment Head unit
• Wearables • Person, Pet
Tracking • Health, Medical • eReaders, Frames • Gaming consoles
• ATM, Vending • POS, Digital
Signage • Enterprise
Tracking • Hand Held
Terminal • Retail Kiosks, PoS • Intelligent Digital
Signage
IoT
App Store
After Market
4 Monetization Strategies
Box
Data
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The “Box” strategy
Strategy 1:
S m a l l B o x
• Design product • Sell product • Market price
Old World • Design platform • Consumer driven choice • Revenue model
New World
B i g B o x
• Design equipment • Sell, install, train,
deploy • T&M for service • Bill for consumables • Service Contracts
Old World • Design platform • Outcome based billing • Consumables, service &
training based on outcome metrics & personalied programs
New World Box
What we learned from Life Technologies
From equipment provider to genomics as a service provider
Science is very close to a vaccine for malaria
Subscriptions are a major win for scientists
Favorite feature: Ability to have rate plans that include a bundled cost for hardware
Old Way
New Way
• Equipment Cost • Services • Training • Upgrades, etc.
Capital Equipment OEM Manufacturing
Opportunity? • Cost/test • Improve Flexibility • Optimize Supply Chain
New Experience & Optimized Costs
Real Revenue Impact!
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The “App Store” strategy
Strategy 2:
Hardware + SW + Data = Customer Centric
applications
“ Y o u r ” A p p S t o r e
Offerings &
Provisioning
SUBCRIBER IDENTITY RECORD
Commerce Billing
Finance
App A p p S t o r e
• Platform w/ OEM supported apps
• Little or no updates • One time fee
Old World • Consumer driven platform /
device • OEM + 3rd party apps developed • Flexible revenue models
New World
The “After Market” strategy
Strategy 3:
After Market
A f t e r M a r k e t
• Extended warranty options = one price fits all
• Upgrades & continued relationship not supported
Old World • Sign up for initial service or
outcome based on contract • Aligned after market contract
to customer specific options
New World
The “Data” strategy
Strategy 4:
S m a l l D a t a
• No collected data • Customer collects
data if they want
Old World • Data from connected
products • Solution based programs for
consumers
New World
B i g D a t a
• Analytic tools for collection & reporting
Old World • Data from connected
products • Outcome based on
applications created for customer solution
New World
Data
Use smart connected products, cloud solution, and new partners to transform business.
Sell & Support each customer as
Individual
Use IoT to enable new solutions for each customer
Replicate processes across all business
units
Transform internal processes & selling
channels
DELIVER A NEW EXPERIENCE
“Move 60% of current revenue to new “Digital
Experience”
“We are good at creating single invoices for $1Million, but to create a million individual invoices takes new thinking, new processes, and new systems.” - EVP of Digital Transformation
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Rela4onship Business Management
Define the Future of IoT
May 4-7, 2015 Boston, MA
Q&A
Thank You