This is how the 'Internet of Things' is changing the business model of the world's biggest technology companies

This is how the ‘Internet of Things’ is changing the business model of the world’s biggest technology companies

This is how the 'Internet of Things' is changing the business model of the world's biggest technology companies
Like it or not, the Internet of Things is here: Smart, internet-connected devices are infiltrating every industry, from hospitality to retail to manufacturing to healthcare, helping companies run their businesses more efficiently. 

There will be roughly 24 billion IoT devices connected to the internet by 2020,accordingto a BI Intelligence report, which says that businesses will be the top adopters of these new technologies. That’s up from 10 billion in 2015

For the world’s largest technology and equipment companies, that means a huge opportunity. Those devices have to be hooked up to the network, managed, monitored, and analyzed for data points — and somebody has to sell the technology to do all of that. 

Microsoft, for example, is betting big that its Azure cloud will be the place that companies large and small will want to run analysis on their IoT data and manage all their disparate devices. Companies like Cisco, Oracle, and SAP are all repositioning their core IT products to deal with the influx of new connected devices.

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Here at the IoT Solutions World Congress in Barcelona, though, I’m hearing that this is only the tip of the iceberg.

The Internet of Things is slowly but surely changing how the big information technology companies do business in ways that have never before been possible, by focusing less on the products they sell and more about the end result they can provide.

This is how.

Historically, the big IT vendors, including companies like Hewlett Packard Enterprise and Cisco, have sold their servers, network gear, and software straight to the IT department. It’s been a lucrative business for decades, and they’ve gotten very good at the process of navigating through the IT purchasing cycle.

As the IoT begins entering new markets, though, the target customers for these big companies change. In manufacturing, vendors aren’t selling to an IT department — they’re selling to the factory owner. In hospitals (or hospitality), it might be an operations manager.

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“The owner of every project in IoT is line of business,” says Hewlett Packard Enterprise Fellow Colin I’Anson. “The people who benefit from innovation can budget for innovation.”

That requires a change in thinking, to say the least. Factory owners aren’t concerned with servers, storage capacity, or network thoroughput.

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