The Internet of Things (IoT) landscape appears confusing to those just entering the market. From hardware to software and even networks, IoT plays a major role in business model transformation. Market leaders see IoT as a means of enabling devices to provide insight and improve context in interactions. The goal is to take the real-time data stream and apply right-time contextual relevancy. In my latest report, The Five Interconnected Internet of Things Business Models, I identify the five business models emerging out of the Internet of Things. 

Constellation expects providers of IoT products and services to enter the market in one (or multiple) of the following business models.

CXOs entering the IoT should start solidifying the partnerships required for their businesses to thrive in IoT.   

5 Internet of Things Business Models

An excerpt of this report along with the table of contents is available to download


Level 1: Sensors and Connectors Provide the Hardware Required to Start the Revolution

IoT requires a layer of hardware to actually connect devices and data sources. Large capital expenditures and traditional manufacturing processes characterize this space. Constellation anticipates the connected vehicle space to drive demand in this area of IoT.

Level 2: Engineered Stacks Emerge as the Norm

Moving forward companies will design their products with IoT connectivity embedded. Stacks inclusive of all the technology required for a product to operate in IoT will emerge. Think of the smart vehicle and all the technology required to operate in IoT as a 'stack'. The biggest challenge for these stacks will be creating alliances and partnerships between the network service providers and the vertical technology providers. 

Level 3:Insight Platforms Bring Relevant Context to IoT

The much of value of IoT derives from the ability to connect data sources. Insight platforms will be able to quickly deliver insights derived from data pools. Working alliances must be forged across different data sources. 

Level 4: Brokers Create New Markets for IoT Insights

IoT Data merchants will soon emerge to sell data derived from IoT much in the same way Bloomberg, Thompson Reuters, and Nielsen sell data about information such as point-of-sale data. 

Level 5: Networked Ecosystems Bring Diverse Stacks Together to Create Massive Opportunities

Large corporations such as General Electric and Siemens are striving to create and monetize large ecosystems built on IoT. Think of a connected city where the power grid, water, roads, communications, and public services are all connected.

This is the zenith of the IoT business model ecosystem as the feasibility of the networked ecosystem relies on the operation of the four other IoT business models. Look for players in this space to be large corporations that align closely with governments. 

Download an excerpt of this report