The Stanford Graduate School of Business recently discussed the Stanford Internet of Things in Global Value Chains Executive Conference, which explores the industrial impacts of enhanced interconnectivity.
Experts say the Internet of Things zeitgeist is equivalent to where the Internet was in the early 90s—poised to completely take over our lives but the details are still a little hazy. Macario Namie, Cisco’s head of Internet of Things Strategy, says the new move for many large companies is to sell “outcomes” rather than physical products. For instance, instead of faxes and copiers, Konica Minolta now sells a “digital hub” to businesses, which pay for “the scanning, copying and digitization services it provides.”
This “outcomes-based” service idea extends to how large companies get in bed with one another to learn more about you with the intent to more effectively hawk their wares. Mobile phone carriers may offer the option to add a vehicle to a data plan to accommodate Wi-Fi-enabled cars while car companies may sell “the data it collects from your car, perhaps to an insurance company that offers a pay-as-you-drive insurance model.”
Value Chain Innovation Initiative Co-Director and Stanford GSB Professor of Operations, Information and Technology Haim Mendelson explains three ways data and “things” can enhance company value. “One is enhancing existing business models, one is creating new business models and one is providing the platform that facilitates or sometimes enables the enhancement and creation of those business models,” he says.
Namie explains the competitive impetus behind this new model: “Who else is monetizing data? Who else wants access to this information that I have? How do I use that as a strategic point within this entire automotive ecosystem?”